Crisis management and the need for CEO leadership

Commentators around the world commonly promote the CEO as Chief Communication Officer, or as Chief Environmental Officer, or occasionally even as Chief Reputation Officer.  But what best practice requires now is the CEO as Chief Crisis Management Officer, and that is much harder to “sell” along the mahogany-lined walls of the executive suite.

Issue and crisis management

Of course the role of CEO as spokesperson in a crisis is well known and well understood (including the fact that there are good reasons why the CEO is sometimes NOT the best spokesperson).   However that activity is purely responsive – it’s about what gets said when the crisis has already struck.

This is a guest post from Tony Jaques*, an internationally recognised consultant and authority on issue and crisis management.

Yet the true role of CEO leadership in crisis management should be much more, and public relations practitioners have a real opportunity to identify and help develop that broader responsibility.

Crisis management as executive responsibility

The concept of crisis management as an integrated executive responsibility is a key theme of my new book, Issue and Crisis Management (Oxford 2014).

It shows that comprehensive crisis management extends from long before the crisis with identifying issues and potential crises; through introducing and activating effective crisis prevention and response; and continues long after operational resumption to include post-crisis risk issues such as inquiries, inquests and adverse legal action.

It’s not surprising that a crisis situation turns the spotlight on leaders as the human face of any organisation.  As US reputation expert Leslie Gaines-Ross says:  “Just as CEOs receive most of the credit when things go right, they are also expected to accept the majority of the blame when things go wrong, particularly in times of crisis.”

Leslie Gaines-Ross research found. “when crisis strikes, nearly 60 per cent of the responsibility for the crisis is attributed to the CEO.”

CEO: more than a spokesperson in crisis management

One result of this attention on the CEO is that a lot of the available material concentrates on the role of the leader as spokesperson in a crisis. But I believe that if CEOs understood better how much blame they will get for the financial and reputational  damage when things go wrong, they just might be more willing to take a more active role in helping prevent the crisis happening at all.

If they need any further convincing, you need look no further than the seminal study by Les Coleman at Melbourne University, which examined Australian crises over a ten year period. It found that more than a quarter of those crises cost the organisations concerned in excess of $100 million, and about one in four of the organisations failed to survive.

In my own research interviewing Australian CEOs about crisis preparedness, it became obvious very quickly that top executives simply don’t see crisis management as their immediate priority.

As one CEO told me:  “People prioritise based on day-to-day issues and pressures. And, hopefully, on more than 99% of days, crisis management is not an issue or priority. Consequently, I think there is a tendency for people to put it off.

“When it’s time to do the crisis management stuff, there is always something else which is more important in the short term. It’s a matter of planning and priority setting and leadership.”

Accountability and opportunity in crisis management

Crisis (and issue) leadership is about much more than just speaking on behalf of the organisation—albeit a crucial responsibility.  Public relations practitioners are in fact ideally placed to help promote what I propose are basic criteria for true crisis leadership:

  • Leaders need to be able to help identify issue and crisis threats early and have the forethought to assign sufficient resources to make a difference.
  • They need to break down functional barriers to drive the integration of issue and crisis management systems.
  • They need to be able to recognise that issues and crisis may represent an opportunity as well as a threat.
  • Most critically, they need to provide an example to managers throughout the organisation to take personal responsibility for developing and implementing effective issue management plans to help prevent crises happening in the first place.

It might seem like a tall order, but it might also be the difference between organisational survival and extinction.

What role do you think CEOs should play in crisis management and why? What experience do you have of effectively undertaken proactive involvement in issues and crisis management from CEOs and executive leadership?

*Tony Jaques is an internationally recognised consultant and authority on issue and crisis management.  He writes Australia’s only specialist issue and crisis e-newsletter, Managing Outcomes, and is author of Issue and Crisis Management: Exploring issues, crises, risk and reputation (Oxford 2014)

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Who should be spokesperson in a crisis?

The best person to be an organisation’s spokesperson in a crisis is its leader. Unless, of course, it’s not. Expertise, empathy and credibility are key factors a spokesperson needs to possess if they are to be effective. And if the big kahuna lacks these qualities – aren’t you setting yourself up for failure by using her?

You can lead a horse to water...but CEOS?

Expertise is needed to be able to discuss all relevant crisis issues. Without this expertise, the leader will come across as unprofessional and insincere. The lack of sincerity perception stems from them being seen as not caring enough about the situation and the impact it is having through his lack of knowledge, especially if human lives or the environment are involved.

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It has been observed time and time again that unless an organisation’s spokesperson in a crisis is perceived as empathising with those being impacted on,s then she will be failing in her role. Empathy will manifest itself in a number of ways:

  • The way in which language is being used. Are people, for instance, being referred to in a caring enough manner? Are their families being referred to?
  • Actual physical presence. A leader who is able to locate herself physically at the actual site of the crisis, or within close geographical proximity, will be perceived as having more empathy with the situation and those involved than a leader who is on another continent or who is, for instance, in a capital city miles away from a mine disaster in a distant rural area
  • Clothing. Would you agree that a leader who is in high vis workwear, at the site of a mining crisis, is more likely to be perceived as having empathy to the situation than a leader who is in a corporate office set up for a media conference office wearing corporate suit and tie?

Or, on the flipside, is a corporate leader normally seen in a suit and tie going to be perceived as ‘try-hard’ and insincere by, all of a sudden, donning the gear of the ‘common man’?

The credibility factor in crisis spokespersons

The issue of credibility is relevant to both expertise and empathy. Credibility is rarely won overnight. Like reputation, it’s built up over years. And a challenge with this is that different groups of stakeholders may perceive totally different levels of credibility within people.

The CEO of a mining company, for instance, may be credible to employees and business media, but may not be credible to environmentalists, politicians and environmental media.

It would seem patently obvious to me a public relations/corporate communication etc employee should not be the spokesperson for an organisation in a crisis.

Despite PR professionals being adept at proactively communicating key messages, responding elegantly to difficult questions and effectively positioning the organisation, I would argue there is no way known stakeholders will perceive this as positively as the organisational leader putting himself out there.

What were we saying about sincerity? If an organisation doesn’t care enough for one of its leaders (if not the leader) to take the time to lead from the front in difficult times then, really, does it care at all? And if it doesn’t care – then why should I?

Being practical, however, there are subtleties to this situation. It may simply be that there is so much media wanting information, an organisation’s corporate communication leader may well need to respond to media with a smaller, and/or less geographically relevant, readership etc as the organisational leader simply can’t tick all the boxes. That would seem an appropriate use of resources to me.

Desire – impacting on the credibility of crisis spokespersons

One challenge it is not unusual for anyone leading corporate communication for an organisation to face is having a CEO who does not like being interviewed by the media. Escalate this to a crisis situation and, um, it’s only human nature that this dislike turns just a little bit more passionate.

At the end of the day, you can lead a horse to water, but you can’t make it drink.

If the CEO is someone who isn’t normally the organisational spokesperson as a matter of course (e.g. for good times), then there is a strong argument for her not to be the spokesperson in a time of crisis:

  • She won’t have done the hard yards of consistently dealing with the media, so will probably come across as clumsy and lacking in expertise and empathy – not to mention she may well not have done the requisite media training, so won’t have the technical skills to adroitly manoeuvre her way through difficult lines of questions
  • Stakeholders may not attach credibility and relevance to the CEO as she isn’t normally seen in the media. Whereas they may attach relevance and credibility to the spokesperson who does normally represent the organisation.

Whilst without any doubt whatsoever there is a very strong argument for any CEO or CEO-equivalent to be adept at dealing with the media, there is a difference between what should be occurring and what the reality is.

And, yes, whilst having the desire or passion for communicating to important organisational stakeholders should be a default, considering the profound importance stakeholder relationships and organisational reputation are, sometimes it’s just not a happening thing.

So if this passion and desire does not exist, I think there is a strong case for using a senior organisational employee who does have this passion and, just as importantly, possesses the expertise, empathy and credibility to do the job well.

Multiple media spokespeople for organisations

In a crisis, to help with consistency of messaging and positioning, by default it is best to have a single spokesperson as much as possible. An assumption in this observation being that the spokesperson is doing a pretty good job!

Outside of the crisis situation, however, I am an advocate of there being multiple organisational spokespeople. As long as the organisation’s brand and positioning has been clearly defined, which includes the tone it should use in its spoken, written and visual communication, then multiple spokespeople achieves multiple organisational benefits.

Having multiple spokespeople achieves a number of outcomes:

  • It helps external stakeholders and employees understand talent is recognised and the organisational leader, for instance, is humble enough to recognise this and not want all employees to operate in his shadow
  • In enriches and humanises the brand
  • Employees operating in a specific area of the organisation will have a deeper degree of expertise on topics than employees from outside this area. By allowing them to speak on behalf of the organisation, it builds awareness of the depth of capability of an organisation
  • The ownership the various spokespeople have of certain areas of the business and the frequency with which they deal with the media, for instance, will make them more attuned to issues in the media and amongst stakeholders. This gives them enhanced capability to be an early warning issues management detector for an organisation
  • It provides ‘insurance’ for the brand if the leader or other spokespeople leave the organisation. If all media commentary is centred in one person, if she walks out the door so does a great deal of brand equity.

So, one spokesperson for one crisis. But business as usual? Multiple spokespeople is the way to go

What war stories can you share of working within a crisis and facilitating organisational spokespeople? Do you think there should be one organisational spokesperson or a number of them – in both the crisis situation and a business as usual setting?

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Crisis management approaches for small business

The principles of crisis management are similar for small and large businesses. What’s different are the economics – the cost of preparation, including the time it takes, for instance – and the resources of small businesses.

Well-Spun-PR-Ideas-for-Small-BusinessA pragmatic way for small businesses to prepare a crisis management plan is to, firstly, scope the five worst case scenarios you could face; those which would have the most significant financial impact on the business and/or which are most likely to happen.

Then it’s about doing everything you can to prepare for these crises, including how you would react to them. This includes:

  • your attitude to them
  • mechanisms of communication you would use to mitigate crisis impact (e.g. media statement; phoning some key media)
  • strategic approaches you could apply including asking trusted, credible and influential stakeholders to speak out on your behalf.

So even if these situations never occur, your business has developed the processes and the muscle to deal with a crisis.

Aspects of this post have been used in the recently published book, Well Spun: Big PR and Social Media Ideas for Small Business, by Amber Daines, Director of Bespoke Communications and an experienced professional communicator.*

Preparation is critical for effective crisis management

In the words of former New York mayor Rudy Giuliani in relation to the September 11 terrorist attacks on New York, “When I was first at the site, I said, we don’t have a plan for this but we’ll do the best we can. Afterwards, I realised that by over-preparing for other things like terrorist bomb threats and blackouts, we had indeed prepared.”

Preparation, therefore, is the key to any business dealing satisfactorily with a crisis. Importantly, it’s not a matter of if, but when, a crisis will occur because it will happen to every business.

As soon as a crisis occurs, make sure you get all the facts. Without all the facts you can’t make educated decisions. Changing decisions and approaches as facts come to light in a crisis is the reality of how these situations transpire, but minimising the surprises also minimises the ‘nightmare factor’.

The responses a business will have in relation to a crisis can vary from complete denial to complete acceptance and apology – and everything in between. It’s important to get legal advice if you are involved in a crisis.

But consider how your response will impact on your reputation and the achievement of your business objectives long-term. Once, it was de facto for lawyers to get in the way of organisations trying to communicate relatively transparently in a crisis communication situation, enflaming the situation and profoundly deteriorating stakeholder relationships.

This is not as common these days, but it remains a risk. Just as, of course, communicating without prudence and rushing to admit fault entails risk. There is a balance that needs striking and, generally, experience is the telling factor in getting it right or wrong. Which doesn’t help SMEs much, but there you have it!

The sub-text of this is, yes, it is important to know where you stand legally on a range of crisis-related issues, including public statements. Equally, however, don’t let lawyers force you into speaking about the crisis in a manner which will unnecessarily undermine your reputation, or your ongoing ability to achieve business objectives.

Sometimes, for instance, it’s best to accept responsibility, apologise and move on, even when the crisis is not entirely your fault because the public perception that the business was responsible for the crisis can be more ‘real’ than the actual facts.

In the fog of a crisis it can be hard to see this, but sometimes it’s best to take the hit and in five years the crisis will be seen as a glitch. If you don’t manage the situation effectively, however, you may not be in business at all in five years.

Speaking clearly, consistently and credibly in a crisis

Doing media training will help you articulate yourself during a crisis and will also have benefits in addition to media liaison. Without media training, unless you are already experienced talking to the media (or are some sort of natural genius) you will screw it up.

Media have very specific needs and they need to receive information in short, sharp and very articulate bites. You need to be properly trained to be able to do that.

You also need to consistently use positive language and stick to your key messages. It can be a challenge to get your key messages across and at the same time acknowledge and answer questions. Try hard not to say no comment or ignore a question, particularly now social media commentary has the potential to rip an organisation apart.

There are times when “no comment” (or an equivalent) is the only viable option, but it’s not a good look and you should prepare other options and, where possible, bridge the answer into one of your positive messages.

You also need to use a consistent spokesperson, which in a small organisation is usually the boss. If the boss is not good at public speaking, go for someone senior who can articulate calmly and consistently and in a likeable manner.

Also remember just because a journalist calls, it doesn’t mean you have to answer them then and there. It’s nearly always possible to promise to get back to them:

  • Find out what the journalist specifically wants to know about
  • In the interim, think about your the questions, their underlying issues and your messaging
  • Consider the ramifications of your answers and further questions built on your answers which could blindside you.

Crisis and communication: opportunities

Any crisis will draw value out of the reputation bank the business has built up, emphasising the importance of ongoing, proactive and positive stakeholder relations, which is what public relations entails.

It is imperative a review takes place following a crisis and lessons learned are incorporated into standard business practice. And don’t forget to consider how the crisis has opened up opportunities to more proactively build relationships with stakeholders you have not engaged effectively with before.

Have you had experience in helping SMEs manage a crisis? Do you have a story to tell? What way do you think SMEs should prepare for a crisis?

*Well Spun: Big PR and Social Media Ideas for Small Businessis by Amber Daines, Director of Bespoke Communications and a 16-year-veteran of all things media. Amber’s goal is to help small to medium sized enterprises boost their media profile without making the usual pitfalls such as bombarding journalists with irrelevant stories, investing too heavily in social media activities that don’t fit your business type or being unprepared for a media interview.