By Jay Berger, Keene Communications

How do you judge the soul of a company?

Every organization has one -- a spirit that mirrors the organization’s sense of ethics, how it performs during periods of great stress.

Companies and people generally operate in a fairly upright and moral fashion when life runs smoothly.  But what happens when there is a sudden wrenching crisis?  Is there grace under fire?
It is inevitable that at some time in a company’s existence there will be a crisis, one that places the company in the glaring light of television news cameras and probing print reporters.  How that company responds is a pretty good indication of the spirit of the company.  Is it arrogant?  Or is it compassionate and understanding?  Is it defiant? Or is it willing to admit mistakes?  Is it business as usually?  Or is it willing to pursue better ways?

Two classic examples are Exxon and Johnson & Johnson.  When Exxon’s oil tanker Valdez ran aground off the Alaskan coast a little more than ten years ago, the company took a combative approach with the media.  Johnson & Johnson in 1982 took a more forthcoming, cooperative and compassionate approach in the Tylenol cyanide tampering crisis that killed seven of its customers.

“For Johnson & Johnson, doing the right thing came naturally,” says Reputation Management, in its March/April 1999 issue.  “For Exxon, an arrogant company used to shutting out the media and all other external voices, it was behavior that had to be learned in the heat of battle.”

The magazine rated ten major crises from 1998, grading them on their management behavior.  Of particular note was the handling of the Swiss Air crash off the coast of Nova Scotia.  The magazine gave Swiss Air an "A" for the ordeal, citing it for quick and open response to the public while protecting the rights and privacy of grieving relatives.  On the other side, the Texas Cattlemen’s Association earned an "F" from the magazine in its suit against Oprah Winfrey for an on-air comment she made regarding Mad Cow Disease.  The cattlemen lost the suit and public confidence and respect.

Mismanagement of communications during a crisis can cost a company customers, increase expenses and tarnish the corporate reputation and image.

“A crisis, in the public relations context, is any event that threatens to undermine the relationship between an organization and one or more of its key stakeholders: employees, customers, shareholders, and the community,” Reputation Management explains.

A crisis can strike any company of any size.  Small companies are just as vulnerable as the large ones.  Typical crises that can beset small companies include a sudden series of serious on the job accidents; environmental mistakes (it doesn’t have to be the magnitude of the Valdez oil spill); on-site fires; labor strife.  A crisis – even if it is just of a local nature – will disrupt business and thrust the organization under the public microscope where it can be dissected without anesthesia.

There are a couple of rules of thumb to help you identify the early stages of a situation turning into a crisis:

    °        Could the media, regulatory agencies and other outsiders develop an interest?

    °        Will this interfere with your normal business operations?

    °        Is it possible this event will get worse, especially if you don’t attend to it?

    °        Is there a possibility that this event will make your company look bad in the eyes of its various publics –    customers, government agencies, community, and stockholders?

    °        Will this have an adverse effect on sales, profits, or costs?

The ill effects of a crisis can be lessened by planning, recognizing that there probably will be a problem some day.  The cost of planning is far less than the cost of not planning.  Good crisis communication won’t stop your legal responsibilities, but will help to mitigate the litigation, as well as preserve your corporate reputation.

From setting up a crisis communications team to formulating a plan of action to selecting outside experts to guide the flow of communications, all are important considerations for any company interested in preserving its integrity and its reputation in the community, the marketplace, and among its stockholders.

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Jay Berger is a public relations writer for Keene Communications, a Syracuse-based marketing communications agency with emphasis on worldwide business-to-business, technical and industrial products and services.

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