Whether your business is big or small, it is not too difficult to find yourself in a "crisis" situation. Your business partner makes an error in judgement... or, one of your products is found to be less worthy than you thought... or, critical files get lost... or, employees do dishonest things... or, critical production staffers quit their jobs without giving notice. There are a number internal and external situations which can, separately or together, make your organization a candidate for "crisis."
There's also a kind of crisis that can be even more serious in the long run. It's the kind of crisis that puts your business in a negative light with the public. It's the kind of crisis that happens when an internal problem becomes public knowledge. This kind of crisis can change people's opinions about your business, your honesty, your competency and the desirability of doing business with you.
A crisis is any situation where your organization's competence or honesty is threatened, the public learns about the threat, and the development of the crisis is outside of your control.
The best way to illustrate the "do's and don'ts" of crisis is to look at two examples from the not-too-distant past. I consider these "textbook examples" of what not to do... and what to do... in a crisis.
The Exxon Valdez Incident
Probably the best example of how not to handle a crisis situation is the Exxon Valdez oil tanker accident which occurred off the coast of Alaska on March 24, 1989. It's an example which will be brought up in business management classes for decades to come.
Journalist and scholar William J. Small probably best summarized it when he wrote: "Exxon: No company ever spent more to repair the damages of an industrial accident. None worked harder to marshall an army (and navy) to fight the damages to the environment. No corporation ever had to cover so much territory to repair the result and probably no other company ever got a more damaging portrayal in the mass media." The accident and the many Exxon blunders that followed are detailed in Small's article "Exxon Valdez: How to Spend Billions and Still Get a Black Eye" (in Public Relations Review, Spring 1991 vol. 17:1).
As we entered the last half of the 1980s the environment became a big issue. We all saw it coming. Community recycling campaigns started up. People were talking about "Earth Day." McDonald's Restaurant stopped using foam cartons. There was great public debate about overflowing landfills. Everywhere you looked you saw people really concerned about the environment and concerned that it wasn't getting the care it needed. Where was Exxon while all this was going on?
Exxon could have monitored the pulse of the public, seen that environmental issues were "hot" and taken some pro-active steps to make Exxon appear concerned with the environment. Exxon could have joined in community clean-up campaigns, contributed to wildlife preservation efforts or gotten involved with other causes and campaigns that would have put its name before the public as a company concerned with maintaining the environment for future generations. This is all basic image management activity, straight from Business Administration 101. It doesn't cost a lot of money, and yet it works quite effectively to create the image of a concerned and responsible company, with useful and beneficial products... caring for the concerns of its customers. It would have shown that Exxon is interested in what interests people. It would have made Exxon look like a responsible, friendly neighbor and not just another nameless, faceless, "big oil" corporation.
Another thing Exxon could have done was take care of business in a responsible manner. Someone at Exxon could have said, "Hey, we've got a lot of big oil tankers floating around out there with a lot of sticky, gooey, expensive oil in them... how do we know the people who are driving them are competent and professional? How do we know they're capable of handling any kind of situation that comes up on the waterways of this nation? If oil does start to leak from a tanker, who will get there first and how will they help stop the leak?"
Suppose, too, that someone at Exxon had thought about oil leak warning detection systems. Someone at Exxon could have said, "Hey, we've got a lot of pipelines out there, carrying oil all over the place, near people's homes and businesses... how do we know that those pipes aren't leaking? If they do start leaking, how soon will we find out about it? Do we have full leak detection warning equipment, and do we test it often to make sure it works?"
These suggestions and many others, are posed by Ben Yagoda in his article: "Cleaning Up a Dirty Image" (in the April, 1990, issue of Business Month). He asks us to consider "how much better Exxon's image would be today if it hadn't allowed an alcohol abuser to pilot an oil tanker or if it had been ready and able to conduct the most efficient cleanup possible."
As Yagoda puts it, "Reality outplays image every day of the week." That is to say, people who are in business should act businesslike. They should do what they need to do every day, to assure that they produce effective, safe, reliable products and services... that they satisfy customers... and that they do their work in a manner that they can continue doing it safely, reliably, and predictably well into the future. You must be aware of every possible thing that could go wrong, and work as hard as you can to see that those things don't go wrong. In the late 80s, Exxon, apparently, hadn't figured this out. I hope the company knows better now.
The Luby's Cafeteria Mass Murder
On October 16, 1991, a man drove his pick-up truck through a window and into a Luby's Cafeteria in Killeen, Texas. The man got out of his truck and stepped into the restaurant. He began shooting. He killed 23 people. It was the worst mass killing by a single gunman in American history.
Although Exxon had the ability to foresee and prevent the crisis that happened in Alaska, there was no way Luby's could have expected that one of its restaurants would turn into an urban terrorist zone. But although there was no way to expect or in any way prepare for what happened, Luby's handled the crisis with the utmost professionalism, compassion and candor.
Almost immediately after the shooting stopped, according to Mitchell Schnurman of the Ft. Worth Star- Telegram, managers at the Luby's in Killeen were on the phone to the company's main office. Within hours, corporate jets were in the air. Top executives of the company and the top executives from their PR firm were rushing to Killeen. Other executives travelled by car, stopping at a Luby's in Austin, Texas en route to pick up the most current information, which had been sent to Austin by FAX.
Thus, while the yellow police "crime scene" tape was still wrapped around the building, Luby's had the company C.E.O., three senior vice presidents, and the senior partner of the company's PR firm on site with more executives on the way.
By the very next day, Luby's had deposited $100,000 into a victims' assistance fund. It had paid for the rental of 40 motel rooms for victims' family members. Company officers met with the media in person, while others on the Luby's executive staff handled more than 100 telephone calls from media all over the world.
Reporter Schnurman quotes Luby's vice president of marketing (and company spokesman) Buddy Schrader, who says the action by the company was actually "very much a common sense thing." He couldn't have said it any better. Through Luby's actions, it demonstrated concern for the people of Killeen and their families. The company demonstrated that it has compassion and that its executives really care about people. Luby's demonstrated that it's a good neighbor. It passed the crash course in crisis management.
One can only hope somebody from Exxon was taking notes.
Of course, these aren't the only examples. We see instances all the time where companies both big and small really "blow it" in a crisis and put tarnish on their image that time won't erase. It happens to big firms occasionally; it happens to small firms in my community and yours all the time.
No one can write a guidebook for crisis management. No one can tell you what to do and what not to do in every situation. No one can predict whether your company will ever need crisis management intervention. It's obvious to me, however (and it should be obvious to you, too) that there are some good common-sense rules for surviving a crisis:
Be aware of your community, what's going on in it and how you fit into the picture.
Prepare for any eventuality in your management of people, facilities, products, and resources (in other words, be ready for the unexpected).
Take a pro-active stance when crisis occurs (you take control of the situation and do what needs to be done to make things right again, regardless of the cost).
Report everything you know, completely and accurately, when the public wants to know what happened.
Be big. Take the blame when it's your fault and vow to correct your mistakes in the future. Ask forgiveness from the community if you need to. Learn from your mistakes.
Take the initiative to develop a solution that's fair to everyone--including yourself. Implement the solution, correct the problems, and move on!
Of course, taking these suggestions to heart won't prevent a crisis from happening. But if you remember them and apply them as appropriate in your day-to-day business, you'll be much more able to handle a crisis should one appear on the horizon.