IN THE HOT SEAT: SMART

RESPONSES IN THE FACE OF

CORPORATE CRISIS

Stacy ArmijoSenior Vice President

Pierpont Communications

MANY POSSIBLE ISSUES…

Reductions in force Plant closings Discrimination Workplace violence Loss of life Litigation Environmental accidents Online security breaches Bankruptcy Boycotts and protests

Labor issues Mergers & acquisitions Product recalls Employee misconduct Outsourcing Fraud Weather, disasters Terrorist situations Shareholder activism Regulatory targeting

Some you can anticipate, some you cannot

IDENTIFYING EMERGING ISSUES

Long-standing policies that could

present new challenges

Negative reactions to new policies

Product / campaign launches that fall

flat

Employee issues (work-related and

otherwise)

Upcoming regulatory challenges

THE PROCESS

Review & Recover

Act & Adjust

Assess & Diagnos

e

Listen & Anticipat

e

LISTEN AND ANTICIPATE

Get “in the know” What are the

controversial topics in your industry? Are you conversant in them?

Would you be looped in on sensitive employee issues?

Would you be informed of unusual legal matters?

How would you be notified of an upcoming service interruption or new product roll out?

Get out of “the bubble”

Do you know employees in multiple areas outside your reporting structure?

Do you follow social & traditional media relevant to your industry?

Do you engage with other industry players outside your company?

ASSESS & DIAGNOSE (QUICKLY)

What do we know (not “think” or “suspect”)? What don’t we know?

What are we doing now? What do we plan to do in the future?

How might this affect our organization? Among whom?

For each audience… How widely known now? In the future? How will their knowledge affect our organization? How could we address their concerns now? In the future? Should we communicate? If so, how, what channels, when?

What policies might apply? Did we act in accordance with them?

Who will decide if / how to communicate? Who should review communications?

ASSESS & DIAGNOSE: WHY QUICK ACTION IS IMPORTANT

If you don’t identify the issues, someone else could (at your organization or outside it), affecting the response.

The first to speak (if you choose to do so) shapes the issue.

Prompt action sends positive messages about the importance of the issue and professionalism of the organization.

ASSESS & DIAGNOSE:AUDIENCES TO CONSIDER Customers Students Investors Alumni Members Competitors Regulators Donors Vendors

Contractors Suppliers Employees Strategic partners Financial analysts Industry analysts Faculty Legislators Clients

Plus, “industry” (prospective customers, employees, partners, etc.)

ASSESS & DIAGNOSE: WHEN TO ACT No hard and fast rules; exercise

judgment based on answers to all of your questions in the assessment

Be the baby bear… not too little, not too muchDon’t stick your head in the sand when your

marketplace pulse is clear an issue exists

Don’t issue a news release to combat the perspective of a limited few with no influence

Recognize that responses will evolve, so you can start small / focused while being ready to escalate, if needed

ACT & ADJUST: ASSEMBLE THE TEAM Plan the “who,” not the “what” Reps on the Issues Management Team

Executive / Ownership + relevant operations Communications (internal, external, gov

affairs) Legal Human resources

For active crisis, name a lead Speeds decisions, crucial to timely response Should not be person “putting out the fire”

Consider each audience, assign liaisons to guide communications, keep pulse

ACT & ADJUST: TIPS

Immediate action + long-term outlook = Smart response

Communication style: Straight-forward, candid, like a real human being

Choose your spokesperson carefully and prepare them effectively

People first, always; Don’t speculate, ever When you can’t say, say what you can To communicate unpopular positions, focus

on the process in addition to the outcome Be extra careful with communications; they

could all become subject to discovery

ACT & ADJUST: COUNSELING EXECUTIVES Be the source of crucial information Be the cool head in the room Speak in possibilities and liabilities, not opinions and

ultimatums Your domain is anticipating reaction among external

audiences to decisions / announcements (or lack of action); own it and share your perspective

Some of my favorite phrases… “Help me understand how this affects so-and-so?” “If we were asked…, how would we respond?” “One possibility is…, how should we prepare for that?”

Don’t be afraid to take on the attorneys to balance legal liability with reputation damage (both of which have substantial cost)

ACT & ADJUST: HOW NOT TO RESPOND Operate at a business-as-usual pace Point fingers, outside or inside your

organization Assume you can control every aspect of

your response Talk to and make decision based only on

those “in the bubble” Be defensive, in either manner of

response or tone of messages / spokespersons

Let technology or personnel paralyze you

ACT & ADJUST

Issues and crises are constantly evolving. The right course of action last year, last month or even last hour may no longer be best in light of new information or changing sentiment among audiences.

Keep the pulse and constantly assess whether the current direction, in method and message, is still the right one and make recommendations accordingly.

REVIEW AND RECOVER Remember, it’s probably not as bad as you

think Recovery is a marathon, not a sprint

Recovery from one bad quarter financially requires 7 consecutive quarters of positive performance

Netflix: Just hit one billion in revenue for a quarter (a record) and still hasn’t fully recovered its stock price from 2011 policy change

To take fuel out of the old story, start a new one (and avoid “going underground”, leaving the market’s last memory of you a bad one)

Before and after, focus on depositing into your “goodwill bank”

REVIEW AND RECOVER: CAPTURE THE OPPORTUNITY

Stacy ArmijoSenior Vice President & Austin General

ManagerPierpont Communications

512-448-4950sarmijo@piercom.com

www.piercom.com