Back to the Future: Why Crisis Management Plans Are Essential
Way back in 2009, we linked to an article about the poor planning and crisis management fiasco led by Kentucky Fried Chicken during a national marketing promotion. The simple fact is that many businesses would rather react to a situation instead of planning for it. I suppose it’s natural. Really, who wants to think about disaster.
Fast forward to last week. If you didn’t hear about the recent debacle surrounding Goldman Sachs, you’re probably not keeping up on smaller publications like The New York Times and Wall Street Journal. In all honesty, it’s one of the bigger publicity nightmares we’ve seen recently.
It all started with a former employee of the firm who publicly denounced the increasingly greed-filled and unethical culture exuding from within the walls of Goldman Sachs. It might seem like just another case of a disgruntled employee trying to get back at his employer. But it comes at a very bad time in American (and global) financial history. The public is still bitter about the bank bailouts and the continual reports of those funds being misused.
But we’re not here to get into a political debate. We are a Creative Agency with a Business Brain, so we always look at the PR, communications and marketing side of things. How did this story look from a branding/marketing perspective? It looked like yet another reminder of why having a strategic crisis management plan is so important.
Of course, proper crisis management is only scratching the surface. Communication and transparency continue to be real problems for banking institutions today.
What is Crisis Management?
For businesses, it is a plan to direct the relevant teams on how to deal with an event, revelation, allegation or set of circumstances that threatens the integrity, reputation, or survival of the business. The key to any good crisis management plan is to determine a set of worst-case scenarios that the company could face and to determine the proper response.
What do you need to prepare and build your own crisis management plan?
Establish a Crisis Management Team (CMT)
- Depending on the size of your company/organization – this team should consist of eight to 10 decision-makers from various disciplines (legal, financial and communications departments)
- The team should include public relations professionals, management, personnel, security, etc.
- Appoint a leader/spokesperson (usually the PR department or the agency that handles your marketing and communications)
- The team should be creative with strong problem-solving abilities
Prepare the Proper Arsenal of Crisis Management Tools
Your Crisis Management Team should prepare the following items for your plan:
- Official statements for the media
- Outlines for press releases
- Fact sheets and backgrounders
- Internal and external company messages
Having a Crisis Management Plan allows your company/organization to react fast to any situation. Preparation is key and any plan should be updated and practiced regularly. Think about having role-playing exercises and prepping the proper spokesman before speaking to the media. Delivery of the message makes all the difference between making the situation worse or better.
Back to the Future
I’m sure that any company representatives that have experienced a crisis will tell you the same thing – “If we could jump into our DeLorean and go back and fix our mistakes before they became an issue, we would.” So if you want to avoid a crisis altogether, practice transparency with your customers, the public and your own employees.
Having a Crisis Management Plan is a great start to prepare for issues before they happen, but practicing transparency is the best way to eliminate the crisis before it takes place. Generally, people (including your employees) appreciate the integrity that comes along with transparency and honest communication, and they’ll reward you with loyalty and positive feedback.
In wrap up, we’ll refer to the words of Greg Smith, the executive who is at the heart of the Goldman Sachs media frenzy. He may be a singular voice in this particular scenario, but the message he conveyed about integrity and leadership rings true for all and should be a shining example of how everyone conducts business.
“It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization.
How did we get here? The firm changed the way it thought about leadership. Leadership used to be about ideas, setting an example and doing the right thing. Today, if you make enough money for the firm (and are not currently an ax murderer) you will be promoted into a position of influence. ” – Greg Smith – former Goldman Sachs executive director and head of the firm’s United States equity derivatives business in Europe, the Middle East and Africa.
What are your thoughts on the Goldman Sachs PR media crisis? Do you have a Crisis Management Plan? Feel free to leave comments below.
