crisis communications - how to manage negative news
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Stephanie Fox, Kris Patrow & David Erickson of Tunheim Partners discussed crisis communications and how to manage negative news on April 2, 2009.TRANSCRIPT
Crisis Communications
How to Manage Negative News
Tunheim Partners Thinking
Tunheim Partners is constantly tracking and analyzing trends, data and research in our specialized practice areas to ensure the most effective and timely information drives our strategy.
Tunheim Partners’ top-level talent is constantly focused on innovative, thoughtful, smart and results-focused strategies that deliver to the right audiences for our clients.
The channels of information and targeted messages are multiplying daily. Tunheim Partners uses insight and strategy to deliver and maintain the attention of targeted audience considering who, what, when and where.
What is a crisis?
Major, unpredictable event or cultural change Poses a risk to an organization’s reputation Threatens to harm an organization and its stakeholders Common elements
• Timing and/or scope is unexpected• Decisions must be made quickly
Crises may or may not be “emergencies”
Acquisitions
Layoffs
CEO succession
Online adYouTube Video
Nationwide salmonellaoutbreak
Pinelake Rehab & HealthOnline ad
YouTube Video
Protecting and preserving a good reputation
According to the Harvard Business Review, 70 – 80% of a company’s market value comes from hard-to-assess intangible assets such as brand equity, intellectual capital and goodwill.
Given this, organizations are especially vulnerable to anything that damages their reputations
Crisis preparedness and crisis management is critical to protecting and preserving a good reputation
Crisis Communications Planning:Why it’s Important
During the next five years 83% of companies will face a crisis that will negatively impact profitability by 20-30%.
-Oxford-Metrica study 2006
Impact on shareholder value:• Companies with effective crisis plan: 5%+ (positive impact)• Companies without plan: net negative cumulative impact of
15% on stock price up to one year after the crisis-Dr Rory Knight and Dr
Deborah Pretty, (1995, Templeton College, University of Oxford - commissioned by the Sedgewick Group).
Why It’s Important (continued) Your credibility and reputation is heavily influenced by the extent of your active and consistent responses during crisis situations. Cases where positive reputation has helped market value: Apple, GE, Google
Cases where lack of proactive reputation management hurt when crisis occurred: BP, Exxon, Enron
A crisis puts your reputation at risk
Affects more people than you think Lasts longer than you expect Becomes a permanent part of your reputation
Why “Exxon” still means “Oil Spill” 20 years later
Exxon did not have a crisis communications plan or team in place to handle such an event; therefore it didn’t…
• Respond quickly enough• Communicate broadly enough• Help clean up enough• Assume responsibility for spill or
harm to environment
Effective Crisis Communications = Protecting Your Reputation
Preparation• Assess current reputation: does it need work• Imagine all possible crisis scenarios• Assign core crisis communications team• Develop and practice crisis response and communications• Monitor and participate in media coverage of your company
Execution• Respond immediately; get out ahead of crisis• Customize communications to all audiences
Resolution• Follow through• Make changes; make amends
The Media Landscape has Changed
News cycle is 24/7 Every media outlet has an online component “Citizen journalists”
constantly “report”
Bloggers Posts on YouTube Facebook groups Patient “review” sites
Consumer Behavior has Changed
63.7% of the U.S. adult population reports having looked for health information for themselves or others online at least once in the previous 12 months.
-Health Information National Trends Survey 2005
66% of health seekers began their last online health inquiry at a search engine 27% began at a health-related website 72% of health seekers visited two or more sites during their last health information session
-Pew Internet & American Life Project, 2006
Case Study: Stryker Medical
“That Must Be Bob. I Hear His New Hip Squeaking”
Case Study: Stryker Medical (continued)
Timeline• “Squeaky hips” recalled on January 22, 2008• Only response was a corporate news release online• Citizen YouTube video uploads May 1 & 12, 2008
Case Study: Stryker Medical (continued)How bad news travels fast
See report on TV Hear about it on radio Hear about it from friends See it online
May or may not recall brand Will recall “squeaky hips” That’s what they’ll search for
Google it Search YouTube
All YouTube Video Statistics
6 YouTube videos generated 55,493 Views 48 Ratings 29 Favorites 60 Comments 30 “Embeds”
led to 957 clicks
Video gets repurposed
Case Study: Stryker Medical - Results Stryker Medical share price dropped 17% January – May 2008 Negative conversation continuesMy problem continued to worsen with the squeaking and popping getting louder and worse pain. I eventually elected to have them removed (by the same suregon - because no other surgeon will dare to try and correct someone else's mistake). Even though this was a Stryker problem I needed to go back to the same surgeon. The explants were extremely damaged whcih did not show on xrays. I am very happy with the new parts, no NOISE, no pain. I hope that congress gets this law passed barbmartin2000 (2 months ago)
If you or a loved one were seriously injured as a result of a defective Stryker Hip Implant, you may have valuable legal rights. Squeakyhips (2 months ago)
I replaced my hip "again" in August 2008 with a Stryker ceramic ball and plastic cup. No more squeaking! Still no word from Stryker on why the squeaking or how they might compensate me for expenses. I could hardly walk towards the end because of pain and discomfort. I am happy to report this hip seems to be working fine! mikemuelleraz (2 months ao)
Case Study: Stryker Medical – Lessons Learned
Prepare for scenarios that may seem “outside the box” Constantly monitor and participate in what is being said
about your company Do proactive reputation management before a crisis
occurs (i.e., positive media stories, increase your “share of voice”)
Be ready to respond quickly and engage all of your audiences
• Stryker didn’t engage the customer
Effective crisis communications planning is “reputation insurance”
A positive reputation requires that at least 20% of stories in the leading media be positive, no more than 10% be negative, the rest neutral.
–Harvard Business Review, February 2007
Generate good media coverage about your company; get to know the journalists who cover your industry BEFORE a crisis strikes
• Merck still recovering from 2004 Vioxx crisis
Case Study: Tylenol Scare 1982
Situation• Seven people died after taking
cyanide-laced Tylenol capsules Response
• Immediate nationwide recall• Assumed responsibility• CEO appeared in TV ads and
press conferences informing consumers of company’s actions
• Introduced tamper-resistant packaging
Case Study: Tylenol (continued)
Result• Public confidence restored• Sales swiftly bounced back to near pre-crisis levels• Able to position itself as a market-leader with the introduction of
tamper resistant packaging
Successfully navigating negative news
Preparation• Resort property accident
Execution• Methodist Hospital
Resolution• Comcast
Successfully navigating negative news
Preparation before a crisis occurs: Evaluate existing and relevant SOPs and consider possible crisis
scenarios Create a communications plan
• Develop a core crisis management team• Develop response plan • Key messages for each scenario• Update your plan annually
Develop contingency plans to handle post-crisis impact on production, sales, quality assurance, confidence
Participate in table-top exercises and evaluate preparedness Continual online monitoring Consider bringing in outside counsel for an objective perspective
Successfully navigating negative news
Execution once a crisis has occurred: Bring situation under control
• Reduce public uncertainty
Analyze and gather all facts• Do not speculate, release only verified information• Never purposely mislead your key stakeholders, the media or the public
Keep internal and external constituents well-informed
Communicate with media• Expressing concern is not expressing guilt• “I don’t know” is acceptable • Always be accurate, always be consistent
Successfully navigating negative news
Resolution/Follow Through: Maintain dialogue with key stakeholders, the media and public as
appropriate
Follow contingency plans to minimize impact on operations
Post-crisis, evaluate what happened• Make any necessary changes to SOPs, crisis plan or protocols
As appropriate seek opportunities to leverage what was learned from the crisis into positive change/news
Why it’s important…
“It takes many good deeds to build a reputation, and only one bad one to lose it.”
-Benjamin Franklin
Summary
A crisis is NOT the time to try and figure out what to do Engage in or increase positive media relations before a
crisis occurs• A positive reputation requires that 20% of news stories about your
organization be positive Put someone in charge of crisis preparedness Establish a crisis plan, complete with scenarios, key
messages and contingency plans• Your crisis communications plan acts as a “map” during a crisis;
one that is comprehensive and flexible enough to accommodate any crisis situation
Don’t postpone getting prepared
Discussion
Stephanie FoxVice President
Kris PatrowAccount Supervisor
David EricksonDirector of e-Strategy
Presentation available atSlideshare.net/TunheimPartners