Handling the Inevitable Crisis

It's a quiet Fall afternoon when two well-dressed men present themselves to your receptionist announcing they are from the Federal Bureau of Investigation and would like to talk to you about your business practices. Or it may be a cold day in January when you learn that one of your drivers ran a Stop sign and killed a young family of four. Or it may be a call first thing in the morning from your partner’s wife explaining that he has just died leaving you alone to manage the firm. Or it could be a phone call from your alarm company informing you that there is a fire at your business. Or it may be a phone call from a reporter asking you if you were aware that one of your best agents has just been arrested in connection with stealing a $1 million from one of your clients.

These things happen and they happen to businesses, big or small, and to individuals as well.

Some years ago I read a book called The Black Swan. Its premise was that the most important things in life are those we did not anticipate. For several years I was impressed with the wisdom of the author who was an extremely able teller of the tale. But then I started thinking well, no kidding. If I saw something coming it wouldn’t have a devastating effect. Of course it is things that we did not anticipate that cause the biggest problems.

Then I began thinking on a different level. The fact you cannot anticipate a particular crisis does not mean that you cannot take steps to analyze how you would handle a crisis, regardless of type. You need a plan. You need to determine in advance who you will call to become involved and what you will do to manage the situation.

Obviously the internal team has to be determined. You are a better judge of who that should be than anyone else. The second issue is which of your outside advisors should be involved. Typically this would be a lawyer, likely your accountant, and your public relations agency if you have one, although it may be appropriate to contact a crisis management firm like Hennes Communications based in Cleveland. All it does is help companies and individuals deal with the unexpected issues.

The team needs to be people with whom you are comfortable because they are going to be giving you advice that you may not want to hear. That means it is essential that you have met with the members of the internal and external team before the crisis occurs.

You need to identify the audiences with which you are concerned with in communicating your response. Your employees would head the list followed by your customers. Then there are your bankers, competitors, friends and family and the general public.

What is critical to remember is that if you say “no comment” you have admitted the truth of the bad news that comes with the crisis. Moreover, you need to understand the modern reporting cycle. It used to be newspapers that were important, but now it is television and to a lesser extent radio. And to the extent the print media is still relevant, and I suggest to you it is, remember that the deadline is no longer hours away, but rather 15 minutes. This is because reporters are directed to prepare blogs and other electronic communications concerning the stories they are handling. These can be available within minutes of when they are created and will be read by the general public who is increasingly taking information from newspapers online. With the pressure to publish, reporters will wait 15 minutes for a callback. If they do not get one, they will run the story without you having a chance to tell your side of events.

You need to tell your side of the events promptly but accurately. You may want to wait until you have all the facts developed, but the world is not going to permit that. But since you have to be accurate, you have to be careful in what you say. Something along the lines of “the matter is under investigation but based upon information we have assembled to date, it appears that __________ occurred. We will be continuing the investigation and furnishing updates as they are available.”

You need to consider whether you are the person to speak to the media or whether it should be somebody else. One of the dangers, particularly in a criminal investigation, is that what you say can and will be used against you. Accordingly having someone other than a potential defendant speak out is advisable. It is likely more credible to have it be someone who is employed by the company rather than the outside counsel or a public relations person, but that is a matter for your team to decide.

Should you decide to be interviewed, you need to understand who is going to be doing the interview, why is it being done and what information is being sought. It is entirely appropriate to ask for that. Realize that you will not be allowed to edit the story or even see it in advance. Understand that you saying “this part is off the record” does not make it “off the record.” You have to have the interviewer confirm that indeed she will take this information “off the record”, meaning it will not be used in the story. It may be helpful to tell the interviewer that the reason you want to go off the record is that you are going to be furnishing information which will help in her understanding the story but not necessarily informative. You should say that before the interview is closed, you will make a statement on the record.

The goal of all this is to reduce the amount of publicity attendant to this adverse event. You want to make it a one day story. The constant dribble of stories over weeks can be impossible to recover from. You need to assume that all the facts in the case are going to come out at some point and so you might as well get them out sooner rather than later.

There is some expense involved in this process, although it does not have to be substantial. But it is a bit like paying for insurance on your house. You may pay for 30 years and never make a claim, but at some point if you do need to make a claim, it is awfully handy to have it in place.