Damage Control: The Art of Managing a Crisis

How should a company respond to a burgeoning crisis to prevent the situation from spinning out of control, with attendant media pandemonium, public furor and brand damage? Public relations and crisis management expert Robert T. Grieves of Hamilton Advisors details the necessary approach to handling a crisis.

By Nan-Hie In


Every company is at risk of encountering incidents that could potentially jeopardize the brand, its integrity, and even the longevity of the organization. A lack of proper crisis management can result in major losses of business and revenue as well as the possibility of litigation in a court of law. Responding effectively to a crisis can be integral to the survival of an organization.

Today, information in the age of digitization travels anytime, anywhere at an enormous speed – a phenomenon in which communications specialists and brand ambassadors are required to be on the lookout 24/7. Robert T. Grieves, Chairman and  CEO of strategic communications firm Hamilton Advisors, is no different: he is on call 24/7 to provide – among the firm’s other public relations services – damage control for companies hit with a crisis.

A former journalist of 12 years who wrote for Time magazine and The Economist and was an editor at Forbes magazine, Grieves transitioned to public relations and crisis management in the late 1980s, joining global public relations firm Burson- Marsteller in New York. He has since held leading communications roles in international companies, including Asia Pacific Regional Head of Marketing Communications for Merrill Lynch and, more recently, President of Edelman in Hong Kong.

A strategic communications specialist since 1989, he founded Hamilton Advisors five years ago, focusing on brand building, media relations, crisis management, investor relations, corporate social responsibility, media and executive training.

Robert T. Grieves of Hamilton Advisors
Robert T. Grieves of Hamilton Advisors

Crisis Management 101

The fundamental rules of crisis management are “common sense,” says Grieves. Yet some companies – even the most prominent – find it a struggle to agree upon necessary actions.

“First, define the problem and tell people what happened,” he says, adding that a company amid a crisis situation should start by communicating the scope of what happened in those areas of greatest importance to key stakeholders – for example public safety or financial loss – to portray a clearer picture of the incident’s impact.

It’s paramount for the company to get the facts out right away, especially in the digital age where a cacophony of voices from social media platforms can stir speculation and criticism and intensify the situation, Grieves stresses. “You need to get the information out almost as soon as you gather the facts. This can be difficult if a company doesn’t have a crisis preparedness program or if its executives haven’t gone through crisis simulation training. It’s then much harder for the company to get its act together quickly.”

It is particularly challenging for organizations in a crisis when they simply don’t have all the facts on hand or when an incident is far away. An airliner gone missing or a ship wrecked in a collision on the open sea, for example, are scenarios extremely difficult to get right in terms of early information dissemination. Yet it’s still critical to get information out early.

Transparency

Grieves says companies sometimes will have to retract and correct information previously disseminated. “The key here is transparency (‘this is what we now know’) as this builds trust, something crucially important today whether you’re a bank, a restaurant or an airline.”

Another essential rule of damage control: demonstrate commitment and how you’re going to fix the problem no matter who is responsible. He adds, “Then you do have to actually fix the problem and tell people you’ve fixed it. That is the basic principle of crisis management and communication.

All these actions must be done quickly, in real-time. Multinational companies in Hong Kong and elsewhere often struggle with this aspect, Grieves observes. “You have a number of banks and corporations here whose corporate headquarters elsewhere in many instances prohibit them from initiating or participating in a direct engagement during a crisis. It is usually much better if the people on the ground speak to the issues on the ground.”

Deferring the important task of directly engaging stakeholders to headquarters not only diminishes the credibility of the local or regional office, but also creates a time lag as well as a breeding ground for conspiracy theories, allowing misinformation and speculation to take hold and grow rampant, Grieves cautions.

Grieves says communicating regularly to all stakeholders of a company – employees, vendors, customers, regulators and others important to the firm – is good practice. “It not only keeps people informed about the organization’s actions, but also helps the company keep an eye on potential problems in other areas,” he points out.

“When a company gets it right in communicating with its stakeholders on an ongoing basis, it can often spot issues which are brewing but are not yet big crises,” he adds.

PR Blunders

The year 2014 was marred by several high-profile scandals in the food industry associated with contaminated products as a result of highly questionable industrial practices and processes at factories in Mainland China and Taiwan. The incidents showcased the need for urgent response and what not to do in a crisis.

When a company is hit with a real issue that largely concerns the public, responding with a denial of the issue will only backfire. Denial or downplaying concern may create a perception among the general public that the company is not being candid. This can significantly erode trust, and damage the integrity of a brand in the blink of an eye, undoing years or decades of brand reputation building. “Trust is key for employees, customers and everybody else,” Grieves notes.

Last October, Grieves explored these and other issues as the moderator of a panel sponsored by the Council of Public Relations Firms of Hong Kong, of which he is Deputy Chairman. It was an in-depth discussion at the event entitled “Are Hong Kong Companies Prepared for a Crisis?” Their conclusion: Hong Kong companies, in general, do not sufficiently or regularly communicate with their key stakeholders and are not adequately prepared for a crisis.

What does crisis preparedness entail? “A crisis preparedness program will include simulations of real-life crises in which a company’s management team participates to benchmark their strengths and weaknesses,” Grieves says. “Out of those simulations a plan is developed, and protocols assigned, so that management is better prepared for the day the unthinkable occurs.”

Working with the Media

In terms of working with the media, “a company in crisis should take questions from them at the earliest opportunity,” Grieves says. “This will allow the company to get its message out through the press and start the process of rebuilding trust. In fact, companies should be hosting media roundtables and events on a regular basis to keep journalists updated on what’s going on. It doesn’t have to be dozens of reporters, just a few at a time.”

Earlier in his career, Grieves had to manage a scenario in which a food product was recalled due to contamination with a toxic gas. The incident became highly controversial because of conflicting reports from various subsidiaries within the company – a case in which inconsistency of information spun into an ongoing crisis as the product was being pulled from store shelves across America.

In that case, the company held a press conference to align the conflicting narratives. “We had to tell people what happened,” he says. “Then, we worked to prove to the relevant health authorities that our product was safe before we could fully return it to the market. It was a hard-fought battle in which the narrative was corrected as we detailed to the public, through the media, how we were fixing the problem.” The product was successfully reintroduced and today is on dining tables and in restaurants in all corners of the world.

There are, however, some experiences that are simply hard to forget. Grieves was head of global communications at The Bank of New York on Wall Street during the 9/11 terrorist attacks and had to maintain a line of communication at the epicenter in New York City. It was an “emotionally draining” experience because he knew people who died in the catastrophe.

“From my office window every day, whenever I looked out, there was this hole in the ground. It was just unbelievable, but we had to live with it,” he vividly recalls. “We had to be sensitive in how we were going to move forward with both internal and external communications given the devastation. It was certainly a testing moment as my team and I worked to overcome a series of obstacles to maintain constructive communications with employees, clients, regulators, the market and the general public. That was the biggest crisis I have ever faced.”

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