Protect reputation and image

Crises cannot be planned, but the measures to prepare for them can. It is therefore worth taking the necessary time in "peacetime" to build up a crisis management system. In a crisis, it is precisely the time factor that is missing. If you are not prepared, you will very quickly be overrun and become the media's plaything.

Hardly a week goes by without reports of new corporate crises. Whether the diesel scandal at VW, the subsidy abuse at Postauto AG or the affair of the former CEO of Raiffeisen Bank, Pierin Vincenz. In this context, it is surprising that apparently even larger companies largely refrain from applying preventive crisis management measures. According to a study by Deloitte, just 37 percent are prepared to plan and implement investments and developments in crisis management processes and capabilities.

Whether it's misconduct by managers, a company takeover or a product recall, today organizations are quickly pilloried by the media. L-F. Carrel wrote in 2013 in his article "Challenge Complexity" for the professional journal "Challenge Complexity in Quality and Management": "The new normality of our society is characterized by crisis permanence, business asusual is a thing of the past. Conclusion: Management must give leadership in crises the importance it deserves. Companies can only successfully navigate through turbulence if leadership in crises and its preparation is perceived as a matter for the management. At the heart of crises are people who either make successful decisions or take successful action - or who are overwhelmed, desperate, hopelessly overtired and ultimately fail. That's why crises are not just about leadership processes and methods, but additionally always about leadership with vision and values."

Recognize signals

Crises usually do not arise at short notice, but announce themselves in advance. These signals must be detected at an early stage so that countermeasures can be taken consistently and in good time. Various options are available for this purpose, such as monitoring various channels.

Many examples from current business practice show that weaknesses also exist in the area of reactive crisis management and that management is often reluctant to implement the necessary countermeasures. We all have the big crises on our radar: diesel scandal, plane crash, resignations. In the case of small and medium-sized companies, however, crises are already being talked about earlier, for example when there is "smoke and bang": be it fires or product recalls, which suddenly put an SME in the spotlight of a broad public. The result: employees fear for their jobs, customers fear for their deliveries. In addition to the classic events, today it is increasingly the "soft" topics, such as compliance or shitstorms, which show an organization without crisis management clear limits. These days, cyberattacks are also becoming more and more common.

Digitization as an accelerator of crisis communication

Thanks to digitization and the possibility of unrestricted interaction, companies today are moving ever faster into the public spotlight. The trend toward a transparent society makes a company look like a fish in an aquarium. Hardly anything can be concealed anymore.

If you compress the change in today's digitalization in terms of communication into three buzzwords, they are: Interaction, transparency and speed. The emerging trend toward total interaction, i.e., from one-sided corporate-controlled messages to public, individual participatory dialog, has increased. What used to be the preserve of journalists is now possible for a broad public thanks to digitization. Anyone can act as an author.

In an increasingly interactive society, the need for a company to communicate with its environment has therefore increased massively. Customers, suppliers or authorities want to be informed immediately and in real time. This demands a rapid response from corporate communications. What is needed is continuous dialog. This applies not only to everyday communication, but also to crisis communication.

Rising stakeholder demands, increasing cost pressure, and a steadily growing dynamic and complexity of the environment: Today, corporate decision-makers are faced with the challenge of increasingly complex situations in which they reach their limits with their technical and specialist knowledge or simple standard solutions. Public pressure on the company is visibly increasing. Not only the media landscape but also companies have changed. Globalization and modern technologies increase complexity and business risks. Although they are professional operationally - in their core business - they fail in crisis prevention. Despite the omnipresence of crises in the media, hardly any measures are taken for prevention.

Risk management as a basis

According to theory, crisis management is "described as a special form of management in extraordinary situations. The task is all those processes in the company to avoid (crisis avoidance) or to cope with (crisis management), which would otherwise be able to substantially endanger the continued existence of the company or even make it impossible".

Crisis management is a tool of risk and business continuity management. This is intended to help a company or organization to return to normal in a crisis with as little damage as possible. The basis for this is the definition of potential risks that can lead to a crisis and cause reputational damage or rather existential effects. The basis for evaluating risks and potential crises is risk management. This includes the recording, the clear assignment of responsibilities and the possible measures to prevent or monitor potential risks.

Mistakes in crisis management

However, companies can do many things wrong when it comes to crisis management. One of the most widespread mistakes: not taking preventive action. It should not be the case that organizations deal with the crisis for the first time when it has occurred. In this context, professional tools that identify potential crises at an early stage can prevent escalation. Other mistakes made in a crisis include hiding, denying or ignoring the emotions of those affected.

Crisis communication

This behavior achieves exactly the opposite effect: The communication crisis comes to a head. De-escalation requires timely, transparent and comprehensive information for the public that is sensitive to people's feelings.

Often, the actual crisis is followed by a second one, which causes far greater damage than the crisis itself, namely the communication crisis. The impact of the media in particular causes immense damage to a company's reputation. Often, investigative media reporting is even the actual cause of a crisis. This form of journalism focuses on events that are seen by the public as scandalous in politics or business. Trust and credibility are destroyed, and the image that has been painstakingly built up over many years is destroyed within a short period of time. Numerous SMEs and other organizations have already had to experience this painfully. This can even lead to insolvency, as the example of the meat processor Carna Grischa has shown. At that time, the meat trader had declared frozen meat as fresh and delivered cheap horse as expensive beef to canteens and restaurants in half of Switzerland. For a long time, information was withheld by the management, the crisis was denied and no measures to remedy the crisis were shown. This led to a lack of customers and the company eventually went bankrupt.

Manual is not enough

It is not enough to create a manual to be well prepared for a crisis. In addition to training, the topic of practice is a relevant component in prevention. Crisis team members must know their role, their function and the processes and be practiced in them.

The exercise also allows to train the cooperation within the crisis team. In the "normal state", the members working for the crisis team often do not work together and have to find each other for the first time in a crisis. Experience shows that it is precisely those crisis teams that are based on unclear structures that fail in an acute crisis. These include, in particular, previously undefined roles, procedures and powers. In some cases, positions are not filled at all or are staffed inappropriately. Both of these factors are enormously detrimental to crisis management. Any deficit in this area, however, can lead to the crisis getting worse or, rather, not being resolved in the company's interest. This is connected with all legal and existential consequences for the company.

Crisis communication as part of crisis management

A crisis can have many faces - in general, it is understood to be the situations in which a brand is at risk of suffering short- or long-term damage. The goal of crisis communication is to minimize the negative impact and maintain the trust of internal and external stakeholders.

Skimping on the early warning system, burying one's head in the sand, and not responding to people's fears - these and other mistakes should be avoided at all costs by communications managers when an organization finds itself in a crisis situation. In such a situation, however, "doing nothing" can be negligent and dangerous. Statements such as "no comment" are no longer adequate these days and lead to the media seeking external subject matter experts who have no connection to the company and possibly no subject matter expertise at all, but who nevertheless provide information on the topic.

Equally dangerous, however, is headlong, hasty communication without coordination with crisis management. Blind activism or short-circuit actions make the crisis even worse. Actually, it is not difficult - surviving the communication crisis.

But there are enough people involved in a company whose behavior ignites or fuels the crisis in the first place. Be it that they do not take the crisis danger seriously, react wrongly or do not take all options of crisis communication in time.

Rapid response

The first reaction in a crisis is crucial. No reaction often implies guilt and accordingly triggers confusion, incomprehension or even anger, both internally and externally. Silence promotes the spread of rumors, which can take on a life of their own in a flash, especially in the age of social and online media.

Of course, it is in the interest of the affected company to know the facts before communicating. In the event of an emergency, the first reaction is therefore to inform the public and the employees about what has happened and what the next steps will be.

The influence of employees is often underestimated. In the event of an incident, they should be informed before the external stakeholders. Well-informed employees serve as multipliers for a company. Particularly in turbulent times, well-informed employees who are well-disposed toward the company advocate for the organization in their environment.

Most important of all, however, is that management recognizes that the topic of crisis management will gain in importance due to increasing complexity in a wide range of areas and should therefore be implemented urgently. After all, a crisis can affect anyone.

* Patrick Suppiger is president of the Swiss Association for Crisis Communication (VKK) and expert for crisis management at the Lucerne University of Applied Sciences and Arts