When Bad Things Happen to Good Companies

An airliner skids off the runway and catches fire, but all passengers and crew safely evacuated.  A software manufacturer releases a new version of a product, and then finds out about serious programming errors that cause it to malfunction. A prestigious college discovers that hackers have broken into its computer system and obtained access to the names, dates of birth and Social Security numbers of thousands of people. Bad things do happen to good organizations. Every enterprise or institution has or will make mistakes. Many have had an employee(s) commit an illegal, unwise or dangerous act, or been victimized by an unfortunate incident.  How then do you reduce the risks of, and damage from, these events?  

An Ounce of Prevention 
Detecting problems before they happen, when this is possible, is always the best strategy. This method saves money, sustains productivity and maintains image and reputation. Companies audit their employee manuals and their patent portfolios. Shouldn’t they take similar preventative measures in identifying areas of potential public exposure?  For firms that are in high-risk areas, such as pharmaceutical, automotive and HMOs, the need is obvious. Their best strategy is to not wait for the next class action before defending themselves in the ‘Court of Public Opinion.’ These outfits should take future controversy as a given.  Consider:  

  • Pooling the names and contact information for the key people—C-Suites, inside and outside legal counsel, inside and outside media/communications advisors—who will need to swing into action as a team the moment a crisis occurs
  • Media-training the team member(s) who will likely be the spokesperson(s) during the crisis
  • Establishing and building relationships with key reporters now, before you need them to be your friends

An enterprise, like machinery, has points of failure. At those ‘locations’ where something can go wrong, there needs to be mechanisms that can detect, correct and report potential problems.  

  • Are you monitoring all media mention of anything in your organization that might be of concern? For example, coverage of a product that might face an uphill approval process by regulators?
  • Do you have competent managers who have earned the trust of your employees? In well-run outfits, the staff is conscientious and loyal, report problems and going the extra mile in a crisis. When an organization is poorly managed, workers look the other way and, when issues arise, they are more likely to go to the media and/or to regulators than to you.
  • Do you also have third-party-provided corporate hotlines? Sarbanes-Oxley, for example, requires publicly-held firms to have whistleblower hotlines to catch potential securities law violations.

To spot potential crises before they develop, the best eyes and ears are your people. Yet because they work with or under those who may actually be causing the problems, a third-party-operated corporate hotline service adds a most powerful element of disinterestedness. Your staff will feel confident that they can report critical matters without facing repercussions.  

Taking Action 
Even the best preventative measures will not stop all incidents. When these occur, here’s what you should consider doing:  

  • Post a blog that clearly states (not defends) your position—how and why the company behaved responsibly, or what it is doing to correct mistakes. Optimize the blog (a simple technical process) to maximize traffic.
  • Enlist third parties to speak on the company’s behalf. The more disinterested they seem, the better.
  • Identify and promulgate a powerful alternative story. If the company has trouble in area X, highlight some success or good works in area Y that will be of equal and eventually greater interest to the public. That story, aggressively developed and disseminated, represents a great opportunity to convert adversity into a positive marketing opportunity.  
  • Know who your real adversaries are and monitor their public initiatives. Consider a little forensic investigation; you may find something a lot more interesting to the media than anything that reporters might be writing about you.
  • Create methods for stakeholders (employees, customers and/or the public) to communicate with you and for you to communicate with them.  Consider mobilizing call centers with enough capacity to handle what may be a flood of calls for both basic emergencies and for major disasters. Often times you can hire an outsourced call center to handle these communications so your internal call centers and customer facing employees can continue to operate your business

Many companies set up disaster response and emergency call centers in advance so they have a defined process in the event of an emergency. You can pre-arrange a standard but easily modifiable script, toll-free numbers and an activation program that will allow you to handle any emergency with decisiveness. This ensures you have the capacity and technology you need to deal with emergencies in the most efficient and cost affective way. Remember that when these strategies fail, life will probably still go on. Sometimes you just have to swallow a day or two of bad press coverage. The key is to control the damage, or, at best, launch a long-term initiative that will yield benefits well after your problems are resolved and forgotten.   

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