Fast Forward Friday: From Nestlé to Equifax—The Evolution of Crisis Management

As a continuation of our Fast Forward Friday series, we sat down with Pierpont’s expert crisis communications team of Terry Hemeyer, Chris Jones and Travis Lawson to discuss how crisis management has evolved over the years—and what key strategies organizations and communicators need to have in place to appropriately respond to crises in the future.

More than forty years ago, Nestlé became the central player in one of the first major corporate reputation crises. The manufacturer faced controversial media allegations regarding its baby formula. The crisis began in 1974 when an article came out in an anti-poverty charity booklet accusing Nestlé of getting mothers in developing countries hooked on using baby formula. The situation continued with a New York Times article published in 1981 and later led to the company facing worldwide boycotts.

Then, just a year later, in 1982, Johnson & Johnson faced an even more critical incident when seven people in Chicago died from taking Extra-Strength Tylenol, which had been laced with cyanide. With a recall of more than 30 million bottles of its pain reliever, the Tylenol incident became a textbook example of how to respond in a crisis.

Certainly, both Nestlé and Tylenol took significant hits to their brands and bottom lines, as did other companies facing crises in the pre-Internet era. But as technology has evolved, so has the escalation and impact of crisis situations—just look at the latest Equifax data breach impacting an estimated 143 million people.

This makes the Target breach of the 2013 holiday shopping season pale in comparison. Despite the company’s attempts to re-establish trust with its customers, its holiday sales the following year suffered and the data breach was estimated to have cost Target more than $1 billion. As compared to Nestlé’s reputation crisis, which didn’t truly take effect for several years, Target saw an almost immediate impact on its bottom line.

Because of technology, social media and 24-hour news, public engagement will only continue to increase and boost the speed at which incidents evolve. More things will become crises, because quite simply, more issues are surfaced today. Given this changing landscape, organizations cannot always control every variable—but as Pierpont’s crisis team discussed, communicators can control their preparedness and their response.

There’s No Substitute for Preparation

Now communicators and, in the case of more formal Incident Command responses, Public Information Officers (PIOs) must always be prepared for the pace associated with crisis responses and how crisis situations can snowball from a public standpoint. Pierpont’s Travis Lawson, a FEMA-certified crisis communicator, advises that organizations have a few key assets on hand to help their crisis teams for the speed of responding during a real event. This includes everything from templates for holding statements and monitoring tools for social and traditional media to databases with contact information for media and elected officials. Having a general understanding of what the media and elected officials want in terms of information about a crisis situation will also help shape how you prepare and continually update your messages.

Terry Hemeyer, a more than 40-year crisis communications veteran, believes it’s essential that communicators remain the calmest person in the room because they will often be the force that binds their team together. They need to be prepared to deal with gridlock and lack of transparency among management. And to best prepare for future crises, it’s up to communicators to play devil’s advocate and anticipate what media, competitors and potential rogue employees may do to challenge their organization.

Unlike in days past, there are a multitude of digital tools available to help you prepare for a crisis—ranging from social and traditional media monitoring services to FEMA certification courses. However, even in this digital age, sometimes the best tool lies in that old adage of hindsight being 20/20. In other words, take the time within your team to look back at past, or even current, crisis situations to evaluate what organizations could have done differently or what they did well.

Respond with the Facts—Even if They’re Limited

When it comes to a crisis, another critical component is understanding the difference between facts and key messages, says Chris Jones, who has worked extensively with crisis management planning and on-site crisis response. In the first hours or days after a crisis, sometimes the only fact known for certain is that an incident has occurred.

A brief initial statement can be quickly prepared to respond to initial inquiries that will confirm this fact and convey key messages, such as a concern for those impacted, and a commitment to investigate and provide ongoing updates as more information is known. After a plane crash, for example, few facts will be known until a complex and lengthy investigation is complete, but an initial statement is certainly expected even though it may be light on solid facts.

Establish Credibility As Quickly As Possible

The crisis communicator’s role and ability to act swiftly will continue to grow in importance, as the public will continue to demand for transparency and reach of social media sites and news organizations leaning on “citizen journalism” expands. Having communications professionals that are experienced and understand the nuances of handling crises is critical. As Hemeyer puts it, managing a crisis can be like drinking water from a fire hose: it’s a lot to absorb in a short period of time. Communicators have to remain flexible and involved in all facets of a company’s crisis management—from identifying and facilitating the team to coordinating drills and updates. Establishing credibility is one of the most important tasks a communicator is faced with in an organization.

United Airlines’ response to an incident involving mistreatment of a passenger has been one cautionary tale of what can happen when an organization has no credibility within its communications team, and yet, is forced to respond under pressure. When the incident occurred, the United team failed to proactively respond, and when they did, traditional media outlets and social media had already been covering the incident full steam. By the time United CEO addressed the incident, it was evident that it was a disingenuous statement, downplaying the severity of the attack. United was blasted by the media and public in what was a perfect example of how organizational communicators, no matter how well-intentioned, can make their crisis situation worse.

Every Second Matters

No doubt, social media has changed the practice of crisis management and response drastically over the years. Before social media, for example, there wasn’t an immediate need to get a holding statement out within the first hour of an incident. Now, the public often knows about an incident before the CEO, and that creates a deeper sense of urgency for corporate communicators to proactively monitor and be prepared at all times.

Given the multitude of variables, what is the most critical factor in an organization’s crisis response plan? Lawson says knowing how you will execute within the first hour, particularly in knowing who’s involved in the chain of communication. This includes how the crisis team is notified when a crisis situation unfolds, if there is a smooth process in place to bring everyone together and activate them on their specific role, etc. The initial process for activating the crisis management team and communicating with media and the public sets the stage for all other aspects of how the crisis is communicated.

While the instant impact of a crisis has changed, calling for a new transparency and speed of communications, Hemeyer says what remains constant is that there will always be crises. Handling a crisis correctly, since every crisis is different, will always be of the greatest importance. There is a delicate balance between responding quickly and waiting until you have the necessary information to respond properly. Though you may want to be transparent with the public, he adds that you cannot jump the gun on your response, so don’t talk before you have something to say.