8 crisis management mistakes to avoid

Most organisational crises are predictable and half are caused by management. So it’s logical that senior executives should play a leading role in crisis management and prevention.

Yet some CEOs still don’t regard crisis management as a priority – until after a crisis strikes. And even executives who are ‘crisis aware” may be unsure exactly what they need to do to protect the organisation from the terrible impacts of a crisis.

Crisis Proofing dictates that senior executives must play a more direct role in crisis preparedness and prevention rather than simply delegating responsibility and hoping for the best.

Any manager who says, “Let’s not over-plan for a crisis. I am sure we can respond well” should consider a study of Australian crises over a ten year period undertaken at Melbourne University. It revealed that one in four serious crises cost the organisation affected in excess of $100 million. In addition, more than 25 per cent of the organisations went out of business or ceased to exist in their current form.

If that wasn’t alarming enough, a famous Oxford University study disclosed that when a crisis struck, the share price of badly-prepared companies fell further and recovered slower than well-prepared companies. Twelve months after a crisis, the share price of well-prepared companies was, on average, 22 per cent ahead of the badly-prepared.

In the face of such stark numbers you’d think that crisis management would be fully recognised as a core leadership competency at executive and board level.

Yet damaging headlines regularly expose organisations which failed to properly prepare for even the most obvious crises. Worryingly, a recent survey of non-executive directors in Australia found only 11 per cent rated their own organisation’s ability to respond to a crisis as ‘very effective.’ And only three per cent felt their organisation was ‘very capable’ in crisis prevention.

For any manager who wants to Crisis Proof the organisation, these are some basic mistakes to avoid:

  • No effective crisis plan in place – There must be an up-to-date and regularly tested crisis plan and a well-trained crisis management team.
  • Inadequate issue management – Issue management is the essential process to identify and address risks and potential crises early.
  • Over reliance on one spokesperson – Speaking with one voice does not mean only one spokesperson. The most appropriate spokesperson may not be the CEO.
  • Over confidence in communication ability – Bad communication often does more damage in a crisis than the event itself. Yet some executives still say: “I don’t need media training. I can wing it.”
  • Failure to set the right tone – If the CEO is not willing to genuinely apologise when appropriate, and is not committed to act in a crisis and lead by example, any other response is badly undermined.
  • Unwillingness to hear bad news – In too many crises, bad news did not reach the top, or was deliberately ignored. There needs to be open, blame-free upward communication.
  • Failure to assign priorities – If leaders don’t clearly position crisis management as a high priority, nor will others in the organisation.
  • Reluctance to learn from past crises – Don’t say “Let’s not dwell on the past” and “Let’s keep focused on the future.” These are simply excuses for not facing up to what caused the crisis in the first place

Crisis Proofing demands executives and managers at all levels who understand the threat generated by crises and are prepared to work to protect their organisation. Clearly, success requires much more than just avoiding these eight mistakes . . .  but it’s a pretty good place to start.

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Don’t be fooled by the NRA’s ‘gun control’ issue scam

Whatever you think of the National Rifle Association you have to give them credit for some highly effective yet totally cynical issue management.

In the wake of the terrible mass-shooting in Las Vegas, the NRA turned a potential PR disaster into an issue management near-triumph.

They could have dusted off their usual response after every previous mass-shooting. But instead the plotters at NRA came up with an audacious new approach – they called for a review of the so-called bump stocks, which turn a legal semi-automatic weapon into an illegal automatic killing machine.

In issue management terms it was a classic case of ‘look over here’ while maintaining their core objectives. By seeming to give away something which is peripheral to their gun rights commitment, NRA implemented the tried and true issue diversion strategy. Moreover they positioned themselves as part of the solution and not a key part of the problem.

And it was remarkably effective. Commentators and reporters in the US and elsewhere rushed to express amazement that the NRA was actually ‘supporting gun control,’ when what was really amazing was the media’s gullibility. Headlines around the world hyped this minor concession into a supposed change of direction. For example ABC America headlined it: “Las Vegas shooting leads to first signs of movement in gun control stalemate” and The Orange County Register trumpeted: “Gun control war dramatically changes with GOP, NRA agreeing to regulations.”  Mashable went so far as to claim: “Hell freezes over as NRA supports a gun control measure” (the headline was later replaced).

Meanwhile, in Australia The New Daily said: “Las Vegas Shooting: NRA calls for tougher gun regulations” and ABC Radio reported: “NRA supports crackdown on rapid-fire device used in Las Vegas.”

Of course there were some sceptics and doubters. For example the website deathandtaxes carried the headline: “NRA pretends to support gun control by encouraging tiniest possible regulation” while US Today tried to have it both ways: “The NRA GOP now want gun control. Kind of. Sort of. Not really.”

But overall the NRA achieved a real media win, as well as a significant political success. By blaming former President Obama’s administration for “approving the sale of bump stocks on at least two occasions,” they gave an easy free kick to their political allies as well as to their endorsed nominee for the presidency. As the Washington Examiner reported: “Trump White House has a new bump stock strategy: Blame Obama.”

The NRA plan was certainly politically astute. Republicans were predictably quick to embrace a call for ‘sensible regulation’ which they could endorse without alienating their guns-right voters, while anti-gun Democrats had little choice but to welcome the proposal, delivering a faux image of bi-partisanship.

Most importantly, this was all effortlessly achieved at effectively no real cost to supporters of gun-rights. Even for an organisation like the NRA, with a long history of campaign success, this was undoubtedly a slam dunk.

Whatever you think of the NRA, it was a lesson in well-executed issue management. The real shame is that such strategic audacity wasn’t applied in support of a more worthy cause.

Edited from an article in The Conversation

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Issue Management Rule #1 – Don’t boast how clever you are

It is seldom very smart to brag about how clever you are. And never more so than in the sensitive field of issue management.

But that lesson seems to have been lost on Australian soft drink makers in the midst of the highly controversial issue of whether a sugar tax on fizzy drinks would be an effective measure to combat national obesity.

In its latest Annual Report, the Australian Beverages Council – representing many large soft drink makers – bragged that it had successfully warded off ”any legitimate threat of a discriminatory tax.”

The Council detailed its lobbying efforts with politicians and bureaucrats, claiming success in keeping a sugar tax off the table, and disclosing the creation of a coalition sugar round table to further increase pressure on lawmakers. That might have been a positive message to privately convey to members, but it’s hard to imagine how it could be a winning communication to the very politicians and bureaucrats they need to influence.

Deakin University researcher Dr Gary Sacks told the Sydney Morning Herald he was flabbergasted by how openly the Council spoke about their successful lobbying of politicians. “They usually talk about how they’re part of the solution,” he said. “So to see them openly boasting about lobbying politicians against public health measures is a big surprise. It’s normally behind closed doors.”

Of course Dr Sacks is right. Issue management and political lobbying are legitimate activities. But boasting can bring unforeseen consequences. A notorious case in Australia was in the late 1990’s when Victoria was debating whether to introduce Sunday trading. In the face of what seemed to be legitimate public opinion and grassroots civil disobedience, the Government legislated for shops to open on Sunday. But having cheaply achieved a change in the law, those behind the campaign couldn’t resist the temptation to pat themselves on the back.

A front-page exposé in The Age newspaper carried the headline: “Revealed: how big retailers plotted for Sunday hours.” The story explained that eight major furniture retailers were behind an issue management strategy to deliberately clog the courts with prosecutions in an effort to show that the existing law was “unworkable.” The campaign was successful, but needlessly boasting about it proved a strategic error.

The furniture shops later tried to replicate the campaign to deliver Sunday trading in Western Australia. But they underestimated the consequences of publicly embarrassing politicians. A plan to clog up the courts in Western Australia failed to move lawmakers, and a public referendum also failed. Exposing the manipulation behind Victoria’s law change was certainly not the only barrier, but the bottom line is Sunday trading in Western Australia was delayed for almost two decades.

Confidential issue management strategies sometimes leak – like the scheme hatched by US activist PR man David Fenton to fight the influence of Rupert Murdoch over climate change denial, which was exposed late last year. Or the American Petroleum Institute’s detailed 1998 plan to combat support for global warming, which got posted on the internet in 2015. Or the strategy during the 1960’s by the global sugar industry to block research linking sugar consumption with tooth decay, also exposed in 2015.

However, deliberately revealing your own strategy is quite different. The Australian Beverages Council tried to justify its position by saying they proudly advocate on issues and that “This is not new and hardly a secret.” True, but bragging about your success runs the risk of being seriously counter-productive.

 

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Is “IT glitch” becoming the new “dog ate my homework”?

Organisations are constantly looking for ways to justify their latest issue or crisis.  And “IT glitch” seems to be emerging as the new all-purpose excuse.

But it’s becoming so over-used and so unconvincing that it must soon be relegated to the same discard pile as the classic joke “The dog ate my homework.”

It’s certainly almost as meaningless.  Is it intended to convey that a human error was made; or there was a programming fault; or an infrastructure breakdown; or that the IT system was hacked; or is it simply shorthand to cover up any technical failure the organisation doesn’t yet understand or can’t be bothered trying to explain.  Or maybe sometimes the truth is just too embarrassing – like when British Airways had to cancel around 800 flights from Heathrow and Gatwick in June when a contract worker reportedly accidentally switched off the so-called uninterruptable power supply to a key data centre, and an uncontrolled reboot shut down the entire system.

These days the joke excuse “The dog ate my homework” is so much ridiculed that it’s used as the title of a British children’s TV comedy show. No-one takes the phrase seriously or expects it will be believed. Yet organisations continue to seriously use “IT glitch,” even though it is at risk of becoming just as non-credible.

Despite its ambiguity – or perhaps because of it – “IT glitch” seems to be the new excuse of choice. Over just the last few months this phrase has been used to characterise:

That’s just a recent sample, though of course sometimes a lazy headline writer was to blame. And doubtless in every case there was a proper explanation, even if it wasn’t adequately shared with the public.

In the TV series Little Britain, David Walliams’ character Carol Beer introduced the famous catchphrase “Computer says no!” It was meant as a joke, and satirized trying to hide any sort of failure or laziness or incompetence behind an electronic smokescreen. But it’s no joke when public trust or investment or safety or service is at risk. The public are not stupid and they deserve much better, even if the real reason might be complicated or hard to understand.

In the face of a crisis or an emerging issue, organisations need to recognise that there is a massive difference between a real explanation and a convenient excuse. “IT glitch” is often just an excuse, and not a very good one at that.

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Why naming an issue can be half the battle

There is no doubting the importance of language in managing a high profile issue. Look no further than the current same-sex marriage postal ballot in Australia.

Same-sex marriage? Gay marriage? Marriage Equality? They might all be referencing the same idea, but the choice of language is helping define the battle-lines of the opposing advocates. Indeed the question of what to call this proposal is so contentious that the national broadcaster took the extraordinary step of directing its reporters and announcers what expression to use.

In a memo to staff, ABC news editorial policy manager Mark Maley warned them to be impartial in their coverage of the debate. “The preferred terminology,” he said, “is same-sex marriage, rather than marriage equality or gay marriage.”

While such a formal intervention might be unusual, the impact of labels in issue management is well understood. At the same time as the national poll on changing the Marriage Act is asking every registered voter to express an opinion, politicians in Victoria are debating legislation to allow legalised euthanasia, or assisted suicide. However that’s not the language which is being used. It’s called the Voluntary Assisted Dying Bill, because advocates of the legislation know politicians and the general public are much more likely to approve of “assisted dying” than a brutal term like euthanasia.

Using selective language to re-frame controversial issues is a proven effective communication strategy. Consider the highly contentious issue of termination of pregnancy. It’s rare these days that either side refer to themselves as pro-abortion or anti-abortion. It’s nearly always pro-choice or pro-life, and for good reason.

Then consider the question of people who arrive by boat without proper paperwork. Are they “genuine refugees” or “economic refugees,” or illegal immigrants, or queue-jumpers, or asylum-seekers, or boat-people or – in the bureaucratic language of the Australian government – undocumented maritime arrivals. Here again, naming the issue clearly defines the narrative.

Addressing another major challenge for today’s society, it was pollster Frank Luntz who persuaded the Bush White House to stop talking about alarming-sounding global warming and to start talking about the more neutral idea of climate change. The result of his advice is that the new language has now been almost universally accepted by politicians, industry and activists alike.

Different industries have tried to emulate this achievement, with varying degrees of success. For example, the oil industry would like us to talk about exploring for energy rather than drilling for oil, and the porn industry would prefer to be called adult entertainment. And proponents of controversial projects would much prefer their new facility was called a secure landfill rather than a toxic waste dump, or a thermal oxidation unit and not a high temperature incinerator.

But responsible issue managers need to remember that this should not be about euphemisms or spin. The question is far more fundamental. As Professor Margaret Somerville of the University of Notre Dame Australia has cautioned: “We know that our choice of words affects our emotional responses and intuitions, including moral intuitions, all of which are important in deciding about ethics and values.”

Important words those – Ethics and Values.

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Denial is no answer to crisis risk

Recognising a crisis risk is the first step in effective crisis management. But it’s hard when organisations remain in denial mode.

Take the case of Village Road Show, the Australian-based cinema and theme park giant. Announcing a decline in profits last month, the company blamed part of the fall on public reaction to the fatal accident on a ride at Dreamworld in October 2016, even though it’s owned by a different operator.

However the company’s “explanation” of the crisis raises some questions. In a presentation to investors at their AGM, Village Road Show said: “Management could never have contemplated such an event. The odds of this happening have been estimated as hundreds of millions to one.”

Really? Theme park managers couldn’t even contemplate an accident on one of their rides? Did they miss the report of the boy decapitated on the world’s tallest water slide in Kansas last year? Or the claim by the Australian Workers Union that it had been dealing with Dreamworld over “a succession of incidents” on its rides over the previous 18 months?

And what about the review by the Queensland safety regulator which found there were 111 serious incidents on Australian rides between 2001 and 2016, of which a “significant number may be attributed to inadequate training or operator error.”  The review compared fun parks to “major hazard facilities” that store, handle or process large amounts of dangerous chemicals because, it said, both types of facilities carried the real risk of multiple fatalities and should be similarly regulated.

For Village Road Show to say that management “could never have contemplated” a serious accident on a theme park ride would seem to be an example of crisis denial. It’s possible they meant management couldn’t have contemplated the consequences of such an event. But, here again, it’s hard to believe that the financial impact and industry flow-on effect weren’t entirely predictable.

Of course denial of a crisis risk or its consequences is not uncommon. A notorious example arose before Hurricane Katrina came ashore in August 2005 and destroyed much of New Orleans. FEMA had previously staged a massive five-day disaster simulation built around a fictional Hurricane Pam which was imagined to have struck New Orleans with high wind and heavy rain, creating a storm surge which topped the levees and flooded much of the city. When Hurricane Katrina struck in almost identical fashion just one year later, with an eerily similar impact, US Homeland Security Secretary Michael Chertoff boldly asserted that the event was “particularly unpredictable” and “exceeded the foresight of planners, and maybe anybody’s foresight.” Which must have been a surprise to the thousands of planners, emergency officials and first responders who had so recently taken part in the Hurricane Pam exercise.

As the British crisis expert Denis Smith has said, one of the main barriers to post-crisis learning —apart from the generalised belief that “it can’t happen here”— is the core values and assumptions of senior managers. That’s a major problem when managerial assumptions seem to preclude even contemplating a serious accident in a risky environment.

Executives at companies in crisis denial should heed data from the Institute for Crisis Management which shows nearly three quarters of all organisational crises are preceded by red flags and warnings. The worrying new review of safety on Australian fun park rides must surely be regarded as a red flag the size of Queensland.

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Unprecedented is a poor excuse for unprepared

Organisations which get caught out being obviously unprepared to deal with an issue or a crisis find it all too easy to claim the situation was “unprecedented.” But it’s a poor excuse and not very convincing.

When Domino’s Australia decided to offer customers 10,001 free pizzas a few weeks ago, it can hardly have been a surprise when the system crashed and angry customers were unable to connect.

In the face of predictable social media outrage, Domino’s argued that they had “partnered with one of the world’s leading providers in online competitions” but that “we had unprecedented demand from our fans.” They also said that more than 100,000 people had logged on in the space of just ninety minutes and “nearly broke the internet.” Hyperbole aside, the question has to be asked: How was the response unprecedented? After all, the offer was made to their reported one million plus Facebook followers.

Moreover there were plenty of warnings. Just one week earlier arch-rival Pizza Hut offered to give away 10,000 free pizzas, with “no catches.” Problem was the detailed conditions said the offer applied only to the first ten customers in each store over a three day period. Cue yet more social media outrage. Plus, of course, that everyone knows – or should know – that viral competitions are notorious for going wrong.

Another company to try “unprecedented” as an excuse for being unprepared was Foxtel Australia when it came to launching episode one of the new series of Game of Thrones in July. The company had promoted the long-anticipated return of GoT to enlist thousands of new subscribers to its rebranded streaming service – the number leapt 40% in the 48 hours before the much-waited premier.

But the system crashed because of “unprecedented pressure” on the company’s system. “We had anticipated heavy usage for last night’s premier. However the traffic that eventuated far exceeded expectations.” Little wonder that so many angry customers hit social media to say they would simply go back to illegally downloading their favourite drama.

Here again, the question has to be asked: Was the problem really unprecedented? Producers HBO had suffered similar GoT demand outages in 2014 and 2016, which should constitute some sort of precedent. As online newsletter Crikey commented:  “I assumed Foxtel would have treated its GoT bandwidth in the way one provides booze for a wedding reception: you over-supply, or you risk never living it down.”

Instead Foxtel said they were “devastated’ and stressed that there had been problems in the USA and Latin America as well. However it’s not clear how trying to spread the blame would have pacified the angry local fans who took to social media in droves.

Now, no-one is denying that genuine technical problems do arise from time to time, but they don’t have to become crises. When it does all go bad, the right steps are no mystery – a genuine apology, an honest admission that preparation clearly wasn’t good enough, and a promise to make good. Weak excuses like “unprecedented demand” and efforts to shift blame to someone else serve only to invite prolonged reputational damage.

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