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PR- Crisis Management

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emily levy

on 11 April 2011

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Transcript of PR- Crisis Management

Crisis Management Emily Levy Jodie Hirst Samara Crystal Aryelle Hendricks What is Crisis management? a situation that is threatening to a business, reputation or could seriously harm a person/people. Crisis Management: if effective can protect companies, save reputations and salvage the existence of a business Crises are disruptions, if handled badly can result in disaster; Credit Crunch... LEHMAN BROTHERS- after being exposed to the continuing subprime mortgage crisis throughout 2008 which became out of their control. Continuous borrowing couldn’t salvage their business in crisis. Unable to be managed they filed the HIGHEST bankruptcy filing in US history - $600 billion. *We will explore effectively managed crisis situations alongside those handled badly
*What leads up to a crisis?
*How would you tell something is near crisis level?
*Being prepared for crisis in PR is vital to effective crisis management
*Important factors of crisis PR management: internet and the importance of communication. OBJECTIVES Crisis public relations management: the context There are a range of ‘do’s ‘ and ‘don’ts’ in PR crisis management .
PLANNING- important factor of preparation for crisis.
Heath (1997) argues that managing issues can prevent crisis in his book Strategic Issues Management where he states:

‘if a company is engaged in issues management before, during and after a crisis, it can mitigate-perhaps prevent- the crisis from becoming an issue…’ According to Seymour and Moore (2000:10), there are two metaphorical explanations of crisis being:

1)The cobra- The sudden crisis, which takes a company by surprise and happens suddenly and without warning. For example...

*following a natural disaster-Japan Tsunami and the nuclear crisis

2)The python- The slow-burning crisis or smouldering crisis following a number of issues that slowly creep up on a company and end it of effect it over time. In order to overcome a smouldering crisis the management should consider to save an organisation. For example...

*the 5 stages of crisis and detection: detection, Preparation and prevention, Containment and damage control, recovery and learning Context continued... 'Unknown, unknown'- unpredictable events
'Known, unknown'- events that could possibly be prevented.

Lerbinger (1997) categorised crisis into 8 different types, which in turn fall under Seymour and Moores Cobra and Python concept.

*The 8 types are: Natural, Technological, Confrontation, Malevolence, Skewed management values, Deception, Management misconduct and Business & Economic. Crisis public relations management vs. operational effectiveness ORGANISATION COMMUNICATION- key factor when dealing with crisis. Good communication or lack-of communication can determine the reputation outcome of an organisationPoor communication- an example of this would be the Exxon Valdez oil spill in Alaska in 1989. Although they practised operational effectiveness by clearing up the spill relatively quickly, communication with stakeholders and the media were poor. Therefore, their reputation was tarnished. Which further led to a company loss of $3 billion in the two week following the spill. PR management vs. operational effectiveness cont. Good effective communication- this can be evident in the Chicago, Johnson & Johnson crisis in 1982 Effective public relations and good communication saved the reputation and organisation that is Johnson & JohnsonWHAT HAPPENED? Tylenol (an over the counter medicine)tampered with & poisoned with cyanide in stores in Chicago- SIX PEOPLE DIED.HOW WAS IT DEALT WITH? It was dealt with in two phases.The first being- handling the crisis, recalling all products and via the media telling people NOT to use the productThe second being- THE COMEBACK- introducing the new ‘tamper-evident’ packaging.A simple operational addition to the existing product being metal foil seals. Stakeholders and consumers could see if the product was safe. Acting swiftly and effectively Johnson & Johnson’s reputation improved if anything.The Tylenol tampering crisis is considered by public relations experts to be one of the best in the history of public relations. In 1989 Sam Black broke down crisis into the ‘known,unknown’ and the ‘unknown, unknown’. So, where do crises come from? *50% of crises involve companies who produce things that we
ingest or swallow
*Food, drink and products from the pharmacy
*Easy for things to go wrong Example? In 2005, nearly 500 products were recalled when
the food dye Sudan 1 was contaminated.
The chilli powder was consumed by UK customers for months, with products like Worcester sauce using the product.
This created a bad reputation for companies involved. Don't assume what you know on the inside, isn't
known on the outside... *Documents found in rubbish dumps
*HM Revenue and Customs What causes a crisis? *Discontent/former employees
*Rumour

*Pick up systems are required
to handle a crisis situation You won't believe what so-and-so
just told me... But, what are the real costs of a crisis? Financial damage is
fundamental REAL COST.. Management Employees Political/Legal grievances Customer
reaction Rebuilding a reputation can take years! The examples and experiences described so far, highlight why it is important to communicate at the onset of a crisis... Communicating during a crisis Employees and management are usually rushed off their feet so are unaware of the crisis until it is raised by someone else, eg the media.
The organisation then feels targeted and responds irrationally under the pressure. "I DON'T KNOW WHAT YOU'RE ON ABOUT... I DON'T BELIEVE A WORD OF IT,
YOU'RE JUST AFTER A STORY. I SUGGEST YOU GO AND PICK ON SOMEONE
LESS GULLIBLE" Crisis management councellors suggest communicating at the onset of a crisis, but many
organisations are against this... WHY? *TIME


*MONEY


*ENERGY
London Bombings 07/07/05  On Tuesday 12th July one of the Universities communications team took a call from a Journalist suggesting that one of the London bombers was a student at Leeds Metropolitan University. The journalist wanted a comment from the University and so a crisis management team meeting took place the following morning. The university protected its reputation by... *Managing the flow of information
*Avoiding distortion
*Actively promoting positive stories about the university
*Identifying and communicating with priority stakeholders
*Operating on a ‘business as usual’ basis

The crisis management team did this by... The Result? *Limited press coverage
*More positive stories
*No headline news Does anyone know how Leeds Met was linked to the London Bombings? The way the organisation communicates to the media is critical Selecting a spokesperson is one of the most important decisions in managing a crisis effectively, they should follow the 5Cs model *Concern
*Clarity
*Control
*Competence
*Confidence The media aren't the only worry for organisations though,
advances in technology are becoming a growing concern... *24 hour news
*The Internet
*New technologies

...all cause organisations concern!
Example? Paddington/Ladbroke Grove rail crash in London on 5th October 1999...

8.06am: Michael Hodder, train driver, pulled out of a platform at Paddington Station
8.11am: Michael Hodders train collided head on with the inbound GNER express train, after going through three warning/stop signals
8.32am: Operational staff at Reading realised there had been a serious accident, due to the controlling signal at Slough. The trains had set alight and there were many injuries However... 8.21am: If anybody had been on the internet at this time, they would have been able to start seeing reports of a serious train crash, which was likely to have numerous casualties. Ten minutes before operational staff knew! What implications does this have on crisis planning then? Blogs Posts Comments Rumour Security Seymour and Edelman (2004) said that crisis management plans need to be developed due to the growth of the internet and it seems they were right Issues like these show how important face to face communication is during and when preparing for a crisis How to deal with a crisis... *Crises are inevitable and unexpected, which is why it is so
important for all organisations and companies to be fully
prepared for when it happens
*There are three methods which companies should utilize
in order to prepare for a crisis
*These methods will ensure that companies and organisations
are as organised as possible. There are 3 main
methods 1. Conduct a crisis audit


2. Prepare a crisis manual


3. Conduct a regular crisis simulation *A crisis audit is a means of researching key elements of the organisations such as operations, marketing, employee relations, safety experts, environmental experts, government, legal and communications people.

*The main function of the crisis audit is to examine the organizations or companies’ strengths and weaknesses and consider how they would cope in a crisis

*The results of the crisis audit then become a means of assessing the areas, which would struggle. It would also evaluate which stakeholders would be most affected. This would then help management build scenarios to train a key crisis team *A crisis manual usually contains a simple system of communications, basic messages and audience identification and it is usually no longer than 10 pages long.

*Anything longer would not be used in a crisis.

*A crisis manual should be a guide for many of the basic tasks, which allows more time for a crisis team to focus on more significant issues. *The concluding step in crisis planning is to conduct simulation training, which is to make a crisis more credible and real so that the organisation or company is fully prepared.

*The main functions of simulation training are to thoroughly examine and test the skills or the company.

*It is always important that the process is repeated as some weak spots may be missed out first time around. There are TEN key principles in crisis management 1. The first being, define the real problem
2. Control information flow
3. Isolate a crisis from daily business concerns
4. Assume a worst-case planning position
5. Do not fully depend on one individual
6. Always resist the combative instinct
7. Understand why the media are there
8. Remember all stakeholders
9. Contain the problem
10. Recognise the value of short term sacrifice Here's an example of what we've
said put into practice... Imagine that traces of BSE (bovine spongiform encephalopathy) are found in Tesco's meat range.

This would be a crisis !

How would Tesco deal with this? * Media control centre
* Customer telephone centre
* Research
* Employee statements sent out
* Recall
* Work with Department of Health Imagine that traces of silicon are found in Tesco's petrol, when it is only used in diesel.

This would be a crisis !

How would Tesco deal with this? * Media control centre
* Customer telephone centre
* Research
* Employee statements sent out
* Work with supplier The credit crunch...

People can't afford to run their cars
anymore, therefore, they cancel their
insurance with Tesco!
* Media control centre
* Customer telephone centre
* Research
* Employee statements sent out
* Meet to discuss lowering prices,
a lower price is better than having
no customer at all In any crisis, communication is important.
Talking to the media, consumers and employees
will be important in any crisis. Other members of
the crisis team will be specifically qualified for
what the actual issue is.
For example, an issue with food, the Department
of Health will have to work with Tesco. When multiple organisations are involved in the same
crisis, as in the Leeds Met example, both organisations
need to ensure they COMMUNICATE with each other
well and gather all the facts of the crisis and how they
are going to manage it.

Otherwise, they may 'bad mouth' each other and this
can make the crisis even worse. Also, by working
together they will limit media speculation and show a
united front. ACTIVITY TIME... An example of a large company dealing with a crisis was Coca Cola losing £3.4million in Belgium in 1999.

The population of Belgium still had fears about the epidemic of mad cow disease when school children were beginning to be hospitalised after drinking Coca-Cola, this was also happening in other parts of Europe which resulted in the fizzy drink being banned in several countries.

Coca Cola blamed the problem on contaminated CO2 and stated that ‘’it may make you feel sick, but it’s not harmful’’. Philippe L’Enfant, a senior executive with Coca- Cola, said; “Perhaps we lost control of the situation to a certain extent.”
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