Quote of the Month:  The 50-50-90 rule:
Anytime you have a 50-50 chance of getting something right,
there’s a 90% probability you’ll get it wrong.
Anonymous

(Editor’s Note:  I have received permission from a fellow crisis communications consultant to reprint this article which I saw published earlier in Jonathan Bernstein’s e-zine “The Crisis Manager.”  A longer version first appeared in the June 2009 issue of “Risk Management Magazine” under the title, “After It Hits the Fan.” It makes all of the important points that I would recommend, and he says it so well I decided not to try to reinvent the wheel! The entire article is longer than my usual e-zine, so I will publish it in two parts.)

FIVE BIG MISTAKES COMPANIES MAKE IN A CRISIS (Part 1)
By Tony Lentini

It was nine o’clock on Christmas Eve when my phone rang.  It was a reporter.

“Is it true they’re going to evacuate Bridgeport?” he asked. The North Texas city was the location of my company’s largest single moneymaking asset, a natural gas processing plant.

“I beg your pardon?”

“Your gas plant is on fire and the rumor is, they’re going to evacuate the entire city,” the reporter explained.

“Let me check into that,” I said, trying to sound as though I knew what was going on.  I took his number and said I’d call back shortly.

Within about 10 minutes, I had a better picture of the situation.  Yes, our gas plant was on fire.  The local fire department, with assistance from others in the area, had contained the blaze to one corner of the facility.  No assessment of damage at this time.  And neither we nor the local authorities were calling for Bridgeport’s evacuation.

I called the reporter back, told him an evacuation wasn’t necessary at this time, and gave him a brief update on efforts to control the fire.  Then I called various company sources to gather additional facts and prepared a brief statement for the news media.

One week later, I learned that the company CEO and CFO still hadn’t been informed that our biggest revenue generating facility had caught fire and would be out of commission for a number of weeks.  The manager of the division that operated our gas plants tended to play his cards close to the vest and hadn’t gotten around to delivering the bad news.

This real-life example illustrates five major mistakes many companies make in a crisis:

1:  No Plan and No Internal Notification System

A good plan should not try to anticipate every possible crisis that may befall an organization but should, at a minimum:

*  Establish a mandatory internal notification system and telephone contact list;

*  Identify the people and disciplines within your company to be included on a Crisis Management Committee;

*  Develop a contact list of the appropriate government, regulatory and public safety agencies, as well as any news organizations that may need to be notified;

*  Identify and gather details on company facilities where a mishap could have public safety implications (and ensure that evacuation plans are in place for those locations, as well as for nearby residences and businesses);

*  Provide for training of key personnel and tabletop exercises to test the plan periodically.

A mandatory notification system within your company is one of the most important components of any crisis plan.  Management and the appropriate departments need to know about the crisis situation before the news media and regulators start calling.

The notification list should include contact information for representatives from the following disciplines: senior management; legal counsel; insurance/risk management; HSE (health, safety and environment); and public relations/corporate communications.  It should be posted in all company locations.

For one company with numerous remote field locations and workers who operated semi-autonomously, we produced individual wallet cards with the notification list on one side and basic tips for crisis media interviews on the other.  We also media-trained all field personnel.

2:  Putting the Lawyers in Charge

That may seem counterintuitive, since many crises involve death, injury or damage to property and these things tend to generate lawsuits.  But lawyers can be the very worst choice for leading a crisis management effort.  That’s because they are hard-wired to avoid lawsuits.  As such, they’re likely to shut down any
communications efforts or tie them up with restrictions and legal language when candor and clarity are called for.  A legal expert does need to be on the Crisis Management Team, but only as an adviser carrying equal weight with other team members.

One of the simplest and most effective methods for defusing a crisis is for the company spokesperson to express genuine concern and apologize for any disruptions, damage or loss of life.  Your legal department may take a very dim view of such a course of action, fearing that it is tantamount to admitting legal responsibility, but it is almost always the right thing to do.

Former “Big Five” accounting firm Arthur Andersen relied far too much on its General Counsel during the Enron scandal when Andersen’s auditors helped the rogue energy marketing company cook its books.  Instead of admitting that a few bad apples had acted improperly and assisting with the investigation, Andersen circled the wagons, virtually shut down all public communication, and sealed its own doom.  Don’t put the lawyers in charge.

3:  Shutting Out the News Media

The third big mistake companies make in a crisis is excluding the news media when the bad news goes public.  Contrary to the popular saying, “No news is good news,” during a crisis, any news vacuum will be filled with rumors and speculation (usually negative).  At best, a company that fails to communicate looks insensitive and uncaring; at worst, it appears to have something to hide.

Years ago, I was called on to assist an oil company that had had an accidental spill in the reservoir that supplies drinking water to the City of Dallas.  Reporters and local officials seeking information about the incident had been turned away at the gate to the storage facility where the oil spill occurred.  After visiting the site, I countermanded the order barring reporters and instead organized a visit for news organizations and area officials to witness the cleanup.  We also hired an independent water quality consultant to test for contaminants and made the results public.  Instead of condemning the company for having spilled the oil in the first place, the public officials (including a member of the County Water Board) praised it for openness and for the “textbook” cleanup operation.  News stories on the spill were equally positive.

Critical to dealing effectively with the news media is preparing a statement that addresses most or all of the “Five W’s” reporters try to put in the lead paragraph of every story:  Who; What; When; Where and Why.   Crisis planners call this a “holding statement,” meaning it holds off reporters for a period while the company investigates the incident and its causes.  I don’t like that term because if the statement is comprehensive enough and you have a relationship with the news media and a reputation for honesty, the so-called holding statement is often the only one you have to issue.  In all but the highest-profile crises, the media usually moves on to the next big thing pretty rapidly.

The key to an effective statement is to provide only what you know to be factual (anything else is speculation and to be avoided like the plague).  Stay away from any discussion of causes (unless you know for certain, which is seldom the case in a developing situation), liability and insurance coverage.  The first paragraph of a typical statement might read something like this:

HOUSTON, March 3, 2008-A large fire (What) broke out around 2 p.m. today (When) at XYZ Corporation’s (Who) oil refinery located in Baytown (Where).  The company reported all refinery personnel accounted for with no deaths or injuries.  The cause of the fire (Why) is under investigation, according to company spokesperson John Smith…

Note that in this case, the “Why” is not addressed other than to say the cause is “under investigation.”  Reporters may ask about causes any number of times, but your job is to only present the facts, not to speculate.  “Under investigation” is an acceptable response because it is the truth and represents the extent of your knowledge at the time.  The sample statement above should go on to discuss any public impact, such as evacuations, road closings and possible toxic releases, the  status of the fire at the time of the statement, etc.  Generally speaking, your initial statement will be relatively brief, reflecting the limited number of facts at hand in the early stages of the crisis.  You will be asked additional questions.  Just remember never to speculate.  “I do not have that information at this time but will be happy to share it with you as soon as we know more” is another acceptable answer to a question requiring speculation.

It is also okay to say, “Our company policy is to never discuss specifics with respect to insurance coverage.”

What is not acceptable is shading the truth or speculating.

# # # #

Reprinted with permission from “Risk Management  Magazine.” Copyright 2009 RIMS, Inc.  All rights reserved.

[Tony Lentini is president of Lentini Creative Communications, Houston, TX, www.CrisisManagers.com. He has more than 30 years of public affairs experience working with some of America’s largest, most successful companies. Contact: tony@lentinicreativecommunications.com

Until next month, when I present Part 2 of Tony’s article…
KEEP COOL!!!