Our speakers, from left to right:
Noelle Knox, CFO Journal Editor,
The Wall Street Journal; Bernard
Kilkelly, Director and Past President,
NIRI New York Chapter; and Rhonda
Barnat, Managing Director, Abernathy
Business reporters are busy these days. From bankruptcies to layoffs, investment schemes and more, our business news is deluged with stories of missteps and failures that reap untold damage onto companies and their employees.
On Thursday, May 29, 2014, The CFO RoundTable NYC gathered for its last panel of the season, “Crisis Communications: Demonstrating Integrity In Uncertain Times.” Our seasoned panelists discussed the critical importance behind having a crisis plan, who the key stakeholders are, and offered advice on managing your business through times of crisis.
According to our panel, “The best managed crisis is the one you’ve never heard about.” Fair enough.
What Did We Learn?
#1: The Pace Of News Has Changed
Not too long ago, crisis communications experts pointed to Johnson & Johnson’s handling of the Tylenol scare in the 80’s as one of the best-handled crisis we’ve seen. And frankly, it was – it embodied truth, quick response and a sincere effort to demonstrate to customers that they cared.
However today, the pace of response is light years ahead of where it used to be. It took two weeks for Johnson & Johnson to pull Tylenol from the shelves and replace the caps – by today’s measure, that’s one week and 6 days too long. Everyone – your customers, your investors, your partners and your employees – are online, and can make any issue, large or small, go viral in a short amount of time.
#2: You Need A Plan
|Our Moderator: Andrew Zezas, Publisher, CFO Studio|
Keeping in mind the rapid pace of the news cycle, the panel urged attendees to start building a communications plan that can handle any unforeseen event that could disrupt business operations.
While there is no ‘cookie cutter’ approach to a crisis communications plan, the panel did offer the following recommendations:
- Try to think 5 steps ahead of the news
- Review and update your plan regularly to account for business changes, new products, new alliances, etc.
- Try to keep your plan to no more than 1-2 pages. While there will be lots of blocking and tackling, and in some cases, will need to be detailed, your plan should be easily referenced and understood in the case of an emergency.
For a great list of details that should be included in your crisis communications plan, check out our article, “5 Tips for CFOs in Crisis Mode.”
And who should lead this effort? Ideally it should be your Chief Communications Officer, but if you don’t have one, task your lead communications person to run point on this plan. Other parties to involve include your COO, Security team, Customer service managers, and general counsel (and of course, you!).
#3: Find Your Voice
Who your spokespeople will be depends entirely on the situation that you’re in, but they always should be sincere and informed. And more likely than not, your main spokesperson won’t be your CEO – it will be the people who work directly with the issue and the customers.
For example, one panelist told a story of a hotel who found legionnaire’s disease in their rooms. The crisis did receive some press; however, to the hotel, it was more important that the staff, or the people that their guests see every day, were informed about the effects of the disease and the steps that the hotel took to eradicate it. So, they trained their entire staff, from their concierge to their cleaning staff, in multiple languages, on the steps they were taking to contain and eradicate the issue.
Another panelist told a story of GM’s airbag issues a few years ago. The CEO wasn’t the spokesperson, rather, a chief safety expert who ran with the engineers and worked directly with customers to identify and solve the problems. According to the panelist, that spokesperson was a game changer for the story, as they taught the reporters the scope of the issue, why it happened in the first place, and the immediate and long term steps they were taking to fix it.
The panel also offered three key pieces of advice when choosing spokespeople and the message to share:
- Never let your general counsel lead your crisis communications efforts. After all, your objective isn’t to win a lawsuit, it’s to keep customers happy.
- PR people shouldn’t be your first choice as ‘your voice’ in crisis communications. Even if they’re employed full-time with your organization, reporters are often keen to talk to the people closest to the crisis.
- Crisis communications varies depending on the region that you’re in. For example, what one culture requires deep and detailed communications on, another only requires a headline. Language translation can misconstrue quite a bit, so choose your words carefully, and in the chance that you do have to communicate with other cultures and languages, be sure to check your message with someone who is fluent in the language and customs.
#4: Never Say No Comment
First, let’s start with the importance of truth and sincerity. It’s just good common sense to never, ever lie, especially to the press. Here’s why – according to our business reporter on stage “I’m the person who is going to find every landmine that’s going to haunt you.”
And for those of you who think ‘no comment’ is an acceptable answer to questions from the press? They’ll immediately think that you’re hiding something, and will find their answers elsewhere. After all, your customers are easier to find online (on Twitter, Facebook, etc.) than you think they are.
In fact, a culture of truth is important to encourage throughout your organization, as just about anyone – smart reporters, bloggers, and ordinary citizens – can find just about anything online.
Secondly, it’s very important that you build trusted relationships with reporters in your industry, and in the business press. After all, they need to know who they can call and who they can trust.
You also must know how they work, and understand the story arc. Part and parcel of your crisis planning should be the day 1, 2, 3 of the story arc – understand what information they’ll need, and why the need it, and do your best to get it to them when they ask for it.
Finally, while ‘no comment’ is never the right answer, there is such a thing as too much information. For example, a panelist shared a story about an issue that occurred on a university campus years ago. The town, thinking that the reporters wanted to stay until the last stone was turned over, held a press conference every three hours – even if they didn’t have news to share. In turn, this overextended the news cycle, frustrating the townspeople who wanted to heal, and the reporters who wanted to go home.
#5: It’s Only Over When They Say It’s Over
Successful crisis management doesn’t end when the press vans drive away. According to the panel, depending on the scope and type of crisis you’re facing, it could take months or even years to settle down. According to the panelists, a crisis is only really truly over when your customers think it’s over, your employees feel confident in their jobs again, and when the last lawsuit is closed (if it comes to that).
However, more important that worrying about the finish line is the continued management of your business. Any crisis or major business development can overload even the best of leadership and employees. It is your job to ensure that the business continues as best it can, ensuring that a strong, healthy company is there to meet you at the finish line.
In closing, the panel offered this set of recommendations for attendees:
- The worst you can ever do in a crisis is deny that you have problems. Seek good advice and follow it.
- Do as much advanced planning as you can for crisis communications, and even go as far as to act out crisis scenarios to dry-run your plans.
Ultimately, at some point, your company is going to face a crisis. It’s up to you as the CFO to be prepared.
Photos and More Information
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