Thursday, June 25, 2009

Crisis Communications

A crisis is defined as a major disaster that may occur as a result of human error, intervention, or by natural forces. A crisis can include both tangible and intangible damage which typically share some common characteristics. These include the element of surprise, insufficient information, rapid escalation, and intense scrutiny. While in many cases these incidents cannot be predicted, they can be planned for. It’s important for companies to prepare for the unpredicted in order to be able to answer with an effective communicational response. For example when Johnson & Johnson Tylenol product was laced with cyanide, they quickly recalled their product. As a result they gained a reputation as a company that cares about public welfare. Without this coordinated response the public perception of Johnson & Johnson could have been negatively impacted, which certainly would’ve have affected their competitiveness.

The modern age of business has created a new dynamic of crisis and crisis communication. The use of the internet and modern technology has created more avenues in which a company’s information could be compromised. For example, many companies use the wireless devices to complete million dollar transaction and wireless transactions are more susceptible outside interference. Once a crisis happens the internet permits information to be spread instantly allowing the world to post their opinions all over the web and the voice of the internet must be managed in order to have a successful communications. Just as technology has made it more difficult to manage the situation, it has also allowed companies to strengthen their crisis communications. Companies now have more conduits to reach their constituents to keep them informed about the crisis and their response.

To prepare for a crisis a company must create a plan. Before a plan is drafted they need to analyze their risk, determine effect on its constituencies, and set objectives. The formal plan should be in writing and include who to notify, media relations, and a location for crisis headquarters. Once the crisis has occurred companies need to get control of the situation, gather information, centralize crisis management, communicate early and often, understand media’s mission, communicate directly with constituents, continue with business, and make plans to avoid another crisis.

My Example

While working as a program manager for a non-profit organization, I was part of a team that organized a field trip for participating students. The field trip involved taking a pre-ordered school bus to PNC Park for a tour. The tour began promptly at 11:00 and ended at 1:00 p.m. We were scheduled to board the bus at 10:00 a.m. in order to get there on time. However, the bus never showed up. While this is considered a minor crisis, it was already paid for and we didn’t want to waste the organization’s resources. While there wasn’t plan for this unforeseeable event, there was a coordinated effort to fix the problem. First, we had to call the bus provider to figure out if the bus was coming. Second, once we realized it wasn’t coming we had to quickly figure out how to get there through public transportation. Thirdly, once the route was mapped out we had to contact the Executive Director to get permission to provide each student with bus tickets to get there. Next we called the tour facility and notified them that we were on our way and may be a little late. Finally, once they were notified we organized the students, set ground rules for public transportation, and left for the tour. We separated the task amongst the managers and eventually we were able to participate in the tour on time.

Suggested Links

The following 2 link are blueprints and toolkits for crisis communications

This link is an article about crisis communications


  1. This is an excellent summary of the main points for chapter 10. Your own experience show a crisis management which could happened every day. Important is to have a plan or a process model to handle a crisis. I have found an actual example of crisis communication about a big company in the US – Boeing.

    The construction and the delivery of Boeing’s newest Dreamliner delay itself increasingly. Boeing disclosure Tuesday 24th of the latest in a string of delays for its 787 Dreamliner exposed flaws not only in the plane’s design, but also in the company’s lines of communication – internally and with business partners, investors and the public. The first flight, which was to take place by June 30, is postpone to a later date. The test flight and the first delivery of the jet, originally slated for May 2008, was also delayed.

    Communications woes have dogged the Chicago aerospace giant during the development of the Dreamliner. Indeed, Boeing has staked much of its credibility on promises that haven’t been met. Some analysts think internal communication remains a key element in the Dreamliner’s trouble.

    Boeing have a very big problem about his new product, the Dreamliner. On the one hand, the production and the delivery delay itself, and on the other hand the customers are much annoyed. This setback will cost the company million of dollars in penalties and concession to customers who have ordered the plane. Furthermore, the company’s credibility decreases and could hurt the new jet’s future profitability. I am curious how Boeing can master this crises and to pass against the competitor Airbus, which is getting stronger and stronger.

    I’m lucky, that I never was in a situation like this. My financial institution although take part about the financial crisis in a very small way. So our credibility and image was not damaged. But we have to declare who we fight against the impact of the financial crisis and which consequences about our own investments we would attract. In my opinion, this was a small fact of a communication in a crisis. I’m the risk manager about the operational risks in our bank. Therefore I’m responsible for the schedule for the emergency cases about the critical business processes. Every process has to be descript if an emergency happened. Every model has to contain an information plan and a process plan about the communication during a crisis. These plans and models have to revise every year. So I have “only” theoretical knowledge about bigger crises.

    But my article based on a currently "real-world" example. The topic from the chapter ten was pick up in an article from “The Wall Street Journal”, published June 24th, 2009. The complete article could be read if you have an subscriber content preview. The Article was printed on the first page and on page A6.

    “Boeing Delays New Jet Again"

    The interactive graphics about the happenings and the reasons why Boeing delay.

  2. Good summary of the chapter and a really nice video by Chris. I agree that crisis is the situation for which one has to be prepared by anticipating them. I still remember from my Information System Management class that professor said one of her student majored in disaster management and started with fat salary. Crisis can be best managed by anticipating them and being ready for everything. This is going to help in better focus and communicate effectively. I feel that for the crisis communication, there must be a team already prepared for it along with factsheet and thorough contact information of every possible source.


    I personally have never experienced this kind of situation at work (fortunately). But I would like to share an example of Nokia, a cell phone company, whose cell phone I use. It was during 2005 when Nokia did outsourcing of production for their new BL-5C batteries. It is a lithium ion battery. Now the problem identified by the quality control and technical department people was that the battery might explode if it is over charged. But too late, that batch was already distributed. So, this calls for immediate attention and mass communication is necessary.

    Nokia started working on the mass communication to manage this crisis. It took real hard for Nokia to take a large market share by beating Samsung and Sony and this problem was ripping their reputation of giving good quality. Nokia started giving advertise in all the leading newspapers in a real visible manner. All the Nokia showrooms placed attractive banners addressing this issue to catch attention. TV advertisements and radio advertisement also made a mass awareness.

    This all efforts were successful and people checked their battery and if it belonged to BL-5C then they got it replaced from Nokia. This includes me as well because I was also one of the many who had this battery in my cell phone.
    Still the Nokia web contains information about this issue if anyone is missed out.

    This link is related to the same issue:

  3. I agree with Chris that every organization should be prepared for the time of crises. The PR team should be fully aware of any possible dangers that they could potentially face if the inevitable were to happen. The occurrence of a crisis is not limited to any particular reason and can happen from numerous possibilities depending on the internal operation or other external factors. As described by Chris in his personnel experience preparation is essential when dealing with any crisis. Therefore a Crisis Communication Plan should be an integral part of an organization’s communication. Chris described in his personnel experience that through proper communication and co-ordination effects of crisis can be mitigated.

    My Experience:

    Every company sales and profit was declining because of the global financial crisis. Share value of most of the companies was declining because of this crisis. Companies are losing confidence and trust of their investors. This is the major crisis that most of the companies are going through. I had invested 5000$ in Nokia’s share. I was thinking to sell all my shares even at loss. I do not have the information how Nokia is doing and is it safe to wait for the market to improve. Nokia took initiative to communicate the company position to its shareholders. Nokia took this crisis as a plus point to eliminate their weaker rivals. Nokia realized that this crisis can lead company to loose its investors. Nokia head said that company will profit from the crisis and this can be seen by our market position and size, our power to invest, global presence and strong brand. He also said that the advantages of scale in the market have become enormous. After listening to all this I thought my investment is safe.
    Website links:

  4. Thank you Chris for the valuable information regard the Crisis communication. I have a story about management communication. I remember that (ECB) the company, the company I used to work for, caused a crisis for one of the petroleum companies in Saudi Arabia. A Saudi regulation forces the Petroleum companies to reduce the emissions from their plant. Therefore, the monitoring process was that a subcontractor collector company that randomly collects 100 samples within 100 radiuses from the plant. The monitoring process has to be done quarterly for each industry. However, once we had received 100 samples for Bin Zager Company and the overall result for Aromatic Petroleum Hydrocarbon (APH) was higher than the industries average and higher than the Saudi Arabian Standard for (APH). However, the lab manager reported this to the government. As a consequence, Bin Zager held accountable for doubling its productions and fine of 10,000,000 dollars. The CEO of Bin Zager contacted our lab manager regarding whether we can double-check the results in order for Bin Zager to avoid a definite fine. I was assigned for doing that because I was a member of the group who analyzed their samples. After three days working on that task, I have realized that the purification section used 2 grams to be analyzed instead of 1.5 grams. Hence, the results were higher then expected. After that, our lab manager reported that to the government that what happened was unintentional and ECB wanted to reanalyze the samples. However, Bin Zager was dismissed from the fine. This was an important step to take because it can lead to damage the integrity of the company. Proper communication in this matter was essential to the company’s reputation and business. This is a clear examples of how company can cause a sever damage or crisis to other.

    Here is the link to elaborate the crisis communication

  5. Chris made a very good summary of the chapter and I very much liked the idea that when a crisis occurs everyone just sits down over the Internet and start commenting about the issue, so company must have a proper plan in order to mitigate and handle such situation.

    According to Corporate Communication author Paul Argenti, Crisis contains the following characteristics: they contain an element of surprise, insufficient information, the quick pace of events, and intense scrutiny. Any event which we call as crisis comes as a surprise to us and often companies are unprepared for it. Crisis can be of many types, they can be natural or manmade. For example, a hurricane is a type of natural crisis which a company can face; crisis such as Enron faced due to accounting scandal was manmade. A company should have a well defined strategy in order to deal crisis. For example, IUP has a huge different set of website designed in order to deal with different critical situation.

    The best example would be what our textbook cites with managing perfectly in the time of crisis is with Tylenol case. The way the company managed to change the whole stock of Tylenol at each and every place is quite appreciable and shows that the Johnson and Johnson company has a good crisis management and communication strategy. It is an ideal example the way the company managed itself in time of such high crises and came out socially responsible.

    Life Experience Example

    I would like to cite an example from my family business. The scenario is eight old, we were celebrating one of our biggest festival- Diwali during which all the shops, factories, government offices, almost everything are closed. The season around Diwali is a peak season for hardware industry as there is a high demand from the worldwide market around Diwali. As projected by our sales managers we had produced sufficient finished goods in order to stabilize the supply and demand ratio after Diwali season. A day after Diwali, my father and I went for routine checkup of the warehouse inorder to make sure that everything was fine but to my surprise what I saw was very disturbing. There were four guards and two Doberman to safeguard the warehouse and all of them were lying unconscious locked inside the warehouse and the finished goods were all gone. Soon my father called up the Mayor and higher police authority and everyone was there within an hour. The enquiry committee was setup in order to trace the thieves but there was still a bigger concern, my father was thinking how to tackle this crisis as he had committed to several customers whose goods was lying in the warehouse. He then figured out a way, he straightforwardly told all the customers about the situation and seeked more time in order to recast the products.

    I found a great article about 7 Must have elements in Crisis Communication Kit.

    Video: Crisis communications: The emergence of stakeholder media


    Great explanation, Chris! In the event of extreme misfortune, it would be wise to have some sort of response team or procedure to cope with the distress. The biggest priority in the event of crisis would be to gain control provide information on a need-to-know basis. Be ethical and accurate when analyzing and discovering new information. As long as the constituents feel that the situation is under control and his being properly handled, the company can save face and protect its reputation.


    Working at Springhill Senior Living, I would work any position that guaranteed more hours each week. One night, a co-worker and I were scheduled to do dishes. On average, during the 3.5 hour dinner period, 120 residents were usually served a formal dinner. I don't understand how this happened, but there was a really horrible thunderstorm during dinner time and the power went out. But not only the power went out, but the water stopped working as well. "Crunch Time" (6 PM) was the most busiest period of the night for all dining and kitchen employees. The electricity returned shortly but the water didn't return until 30 minutes before my shift ended. In this unfortunate event, Springhill had never planned for a situation like this and the residents didn't make the situation any easier. Director of Health and Safety Affairs provided us with 20 one-gallon jugs of spring water to do dishes. I can't explain how impossible my tasks seemed. Although there we had no control over the weather, but the directors and security did a bad job of making it appear that they had everything under control and residents weren't being very understanding of the situation.

  7. In the media we see crises everyday whether from natural disasters, political issues, or the personal lives of government officials. Much of what we see are examples of mismanagement of the situation or evidence that there was never a plan in plac. I loved the video Chris posted which meshed perfectly with what we learned in our reading and in discussing the Coca Cola India case study. As I think about crises we’ve discussed and that we’ve read about in the blogs, it’s clear that crises definitely do include the element of surprise, insufficient evidence, the quick pace of events and intense scrutiny.

    As I look back on my own personal experience, I realize that all of those elements were present during the crisis in which I became involved. In 1991 my grandmother, age 82, passed away in a local nursing home. She had battled cancer for several years, so her passing was not unexpected. However, what occurred after her death was totally unexpected. About a week following her death, I received a call from the oncologist informing me that a catheter containing radiation had remained in her body after her last therapy session, had fallen out into her bedclothes, and was later discovered at a remote biohazard disposal site. Not only had the presence of the radiation caused her death, but all people exposed to her during the time the radiation remained in her body were at risk. Even though alarms went off all over the place to indicate the presence of radiation at the time of her treatment, they were ignored since they had malfunctioned previously, so malfunction was assumed in the case.

    Responsibility for the incident was denied by all parties involved, information in the media was incorrect, there was no personal apology extended to our family, her body had to be exhumed for an autopsy and all these events were highly publicized on a local, regional and national level. Her picture appeared in USA Today, there was an expose on national television, reporters were on my doorstep and a representative from Connie Chung called me. I never responded to the press. The Nuclear Regulatory Commission produced a bound detailed report on the incident. From start to finish, it was obvious that despite the fact that these people worked with life threatening substances and procedures everyday, there was no plan in place for such a crisis. As the book stated, the element of surprise led to a loss of control. A synopsis of the case is found at the bottom of the page on the link below.

    Errors and Successes, Benefits and Problems of Radiation Medicine.

    This article discusses the mismanagement of the Hurricane Katrina crisis.

  8. Life Experience Example

    I have another example from Gaea Gem, where my mom used to work, regarding to crisis communication. The small “crisis” happened two years ago. Outside accounting auditors came in to collect information in preparing for the annual report audition when a group of police entered and get controlled so that no one could access to the accounting record. All the auditing work was stopped. When employees asked the officers for the reasons of this action, they couldn’t get an answer. Because of the presence of the outside auditors, the news spread out rapidly. The communication department soon report to CEO of the situation and tried to communicate with the police, though failed to obtain any useful information. Then the CEO asked the government relations manager, who used to hold a senior position in local government, to communicate with police. And he managed to figure out that one Gaea Gem’s former employee was involved in big corruption case. The police believed that there were important evidence in the accounting data and therefore conducted the investigation. As a result, the company made a press release two days after police entered the company to disclose essential fact to prevent the company’s public reputation from further erosion.

    From this case, we could see that lack of information is a common thing in crisis. So in a crisis situation, a company should first try their best to collect useful information to help with any decision making, besides follow any prepared crisis reaction plan.

    Here is an video clip about crisis communication:

  9. I can relate to Chris’s experience with the bus. I used to own a tour bus, and I know that it can create a crisis if the scheduling is not followed precisely. I think Chris did a great job in getting his party to their destination by being alert and resourceful. He understood who his constituents were in this crisis and was able to quickly and efficiently solve this dilemma. His team’s prompt action kept a small crisis from turning into a disaster.


    In the summer of 2001, I was working for a local natural gas production company as part of a drilling and completion project in Clearfield County, located in central Pennsylvania. The 2001 drilling campaign included 50 new gas wells, over 19 miles of gathering and transmission pipelines, and two large compressor stations. About one third of the way into the program, the company drilled and fractured one of the gas wells near a small village with a couple of dozen dwellings, housing approximately 65 people. One of the geological zones down in the well yielded an unusual formation, and the completion of this particular well somehow interacted with the water table in a highly localized area, potentially destroying the drinking water in several of the villagers’ wells and springs. The service company contractor fracturing the well quickly notified the company of the crisis, and they immediately took action. They quickly responded to the crisis by calling an emergency meeting of their crisis committee. The committee called for an immediate freeze on all aspects of the drilling program, and promptly sent two public relations representatives, in person to every house, door to door, to notify potentially affected residents in the immediate area. In addition, they drafted written notices to all potentially affected parties to follow the in person visits. Next, they contacted the Pennsylvania Department of Environmental Protection (DEP) and the Water Conservation District (WCD), and notified them of the problem. Then, the company hired an outside consulting firm to investigate the extent of the damage. In the meantime, my company was hired to haul in and set up water tanks and handle the logistics of distributing clean drinking water to residents until the crisis could be resolved. A couple of weeks passed until the results came back from the investigation. It turned out only two homes in the village suffered consequences due to this crisis. The company took full responsibility for the affected constituents. They drilled new water wells and purchased filtration systems for each of the affected homes, along with other undisclosed compensation.

    This is a great example of how a well designed and executed crisis plan can work to keep a crisis from turning into an epic disaster. This company’s quick action and preparedness definitely minimized this crisis.

    Here is a great link about the importance of a crisis preparedness plan. It offers some tips and great advice also.