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October 30, 2007

In Business, One's Reputation Is The Bottom Line

Written by  Alan Caruba
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Murphy was right. Whatever can go wrong, will go wrong. And at the worst possible time. The real question is, how will your company deal with it?

Crisis control has become a specialty among public relations professionals. In recent years, we've seen many cMases of events that became instant, national news, threatening the loss, not just of income, but reputation. In business, one's reputation is the bottom line!

There was the now classic tampering with Tylenol. The industrial accident in Bhopal, India, where numerous people died. There was the Exxon Valdez oil spill and the "Alar" hoax perpetrated on the apple growers. More recently, an outbreak of E-Coli food contamination occurred at a Jack in the Box restaurant.

In the cases noted, the public relations aspect of the problem was handled either very well or very poorly. You may not be able to name the chemical company affected by the Bhopal incident, but Exxon's reputation has been damaged for years to come. People retained confidence in Tylenol and went back to eating apples.

In each case, everything hinged on how swiftly the company responded publicly to the event and its choice of a spokesperson.

In some cases, the CEO is the obvious choice, but that person must be comfortable dealing with what will inevitably be a hostile press initially. The news media thrive on bad news and instantly look to assign blame. Thus, the choice of the spokesperson is critical. But, someone must come forward swiftly.

Given the existence of a 24-hour Cable News Network and the ability of even local television news to dispatch reporters to the site of an event, there is no escaping the impact of that first response. Concern, sympathy for victims, plans to offer relief for their pain or loss, a decision to recall a product temporarily, must all be elements of the initial statement.

The company's lawyers will advise against virtually all of these actions. They are wrong. The minute a story becomes news, liability has virtually been assigned to the affected business. If the facts later reveal a different story, it can be told, but initially one has to announce that a thorough investigation of the case is already underway.

Ironically, the same media that will spread the bad news is also the company's best way to counter it. A few, well-placed calls to television news directors, newswire and newspaper editors can provide access to electronic and print media eager to exploit all the angles of the story.

Indeed, providing access, i.e. holding press conferences, is an essential element of damage control. Silence is guilt.

Press conferences allow the company the opportunity to express its position in writing, in the form of public statements, background information on how the product is prepared or the service provided.

A crisis of any sort is a test of how calm top management can remain under pressure. In addition to the often unaccustomed and uncontrollable demands of the media, top management must not only select its spokesperson, support that individual by including other management personnel selected to augment his or her statements, but also act swiftly to bring in independent experts to address the issues raised.

All this must be coordinated by either the company's director of communications or put immediately into the hands of a skilled public relations firm or counselor. It is definitely not a job for amateurs. Too much is at stake.

What is frequently forgotten is that news is now. Instant electronic media communications of news requires an on-the-spot response. It cannot be postponed until the following day "when we have reviewed all the facts" because the facts are that something went terribly wrong or that a charge has been leveled of misconduct.

The company's "facts" are fundamental. "We're distressed. We're concerned. We already have a team looking into this and expect to comment at the earliest possible moment as we learn more. For now, we can assure everyone that we'll take every action necessary to insure no further harm will occur."

Where an entirely false charge has been made, a display of anger, combined with a brief presentation of facts to refute the charge, is worth a million dollars of free publicity.

Be prepared, few are.

Few companies, large or small, have a crisis control plan.

Such a plan anticipates who's in charge the minute events demand a response. Delegating authority to a designated spokesperson and giving that individual authority to contact media, issue an initial statement, provide background information, et cetera, is essential to minimize the damage.

Often a company doesn't even have a single sheet of information about itself available for dissemination. News media immediately dip into existing sources of data, often in the form of information accessed from previously published news stories, many of which may be outdated or inaccurate.

Generally speaking, large companies have an adversarial relationship with the business and general press. They seek to control access to top management and to information about the company. This rarely works to a company's advantage in a world of instant communications.

Another common error is to assign a company's public relations function to a corporate attorney as opposed to a communications professional. Some of the nation's largest companies have an astonishingly small communications staff and regard both internal and external communications with suspicion. A crisis of any sort catches such companies totally unprepared.


Alan Caruba, is President of The Caruba Organization, a public relations group in Maplewood, N.J.

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