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DETECTING CRISIS BEFORE IT HITS

Today, our world is permanently in crisis. Natural disasters, terrorism, rumors , product tampering, wars, economic meltdowns and its attendant consequences on human behavior have conspired to make life difficult for organizations keeping up with global best practices in doing business no longer guarantee companies any form of immunity to crisis.  24/7 news cycle, social media and cell phone technology have added salt to injury. A little corporate mistake is broadcast globally in seconds. Citizens journalism has taken over control of corporate stories from PR professionals to just anybody with a computer or cell phone with the internet connectivity. And editors and producers who vet the quality of contents are not needed.

Protecting corporate reputations have never been so difficult. PR professionals who succeed are those who recognize that the best way to manage a crisis is to prevent it. They know that having a crisis detection radar system, and monitoring the system 24/7 for early warning signals, is the best way to go. They also know how the crisis detection radar should be set up, where scanning for crisis should take place, what type of signal detectors should be used and how the captured early warning signals should be treated.

Defining Crisis

Till date there is no definition of crisis acceptable to all scholars and practitioners alike. They vary according to the perspectives and approaches to crisis management embraced by each author.

Popular in Crisis Management literature are event-based definitions. One of such is that given by Lawrence Barton in his book, Crisis in organizations: Managing and communicating in the heart of chaos: “Crisis is a major, unpredictable event that may produce negative outcomes, including substantial damage to an organization and its employees”.

This definition leans toward a tactical approach to Crisis Management. An event is seen as the starting point of a crisis. Management has no option but to react to it. Emphasis is on what to do to resolve the crisis rather than on why it happened and how to proactively do something to prevent it.

What PR professionals who belong to this school of thought see as the cornerstone of crisis management is, detailed planning of messages to diffuse the tension of stakeholders when crisis strikes. Such messages are mostly to protect the interests of their organizations.

Developing carefully worded media releases, compiling media contact lists and training of spokespersons to cope with media interviews constitute the major preparations for crisis. Nothing is done to track early warning signals or red flags.

There are also definitions that capture crisis as a process. This processual approach is championed by Christophe Roux-Dufort. In his article, Is crisis management (only) a management of the exceptional?, published in Journal of Contingencies and Crisis Management, he defined crisis “a process of organizational weakening that degenerates until a point of disruption we shall call the precipitating event”.

This approach perceives crisis as a long incubation process that suddenly manifests under the influence of a triggering event. In other words, crisis has been there long before the triggering event. The event is only a catalyst.

Crisis scholars in this school of thought are of the view that crises develop in phases,  and that organizations, by their actions and inactions, generate their own crisis. Therefore, managing crises require a wide range of calculations starting with identification of the processes that put organizations into vulnerable situations. They emphasize crisis prevention through monitoring and early detection of warning signals and taking of corrective actions.

The current definitions of crisis tend to emphasize the primacy of organizational stakeholders perceptions. One such definition is given by W. Timothy Coombs in his book, Ongoing Crisis Communication: “A crisis is the perception of an unpredictable event that threatens important expectancies of stakeholders and can seriously impact an organization’s performance and generate negative outcomes”.

This definition leans toward what Dawn Gilpin and Priscilla Murphy refer to as the adaptive approach to crisis management in their book, Crisis Management in a Complex World.

The line of thinking of this school of thought is that crisis is socially constructed and stakeholders are at the heart of this construction. A situation becomes a crisis only when a group or two of stakeholders perceive it as such. The cardinal belief behind this thinking is rooted in Karl Weick’s theory of sense-making which explains that, meaning is not intrinsic to an experience but lies in the kind of attention directed to the experience.

The adaptive approach to crisis management emphasizes the development of strong positive relationships with stakeholders as a preventive approach to crisis management and uses issues management as a tool to understand the viewpoints, tastes and preferences of stakeholders in a bid to uncover early warning signals of crisis.

Interestingly, how crisis is defined tells to what extent detection of early warning signals is important to an author. At the back of every definition of crisis lies an approach to crisis management which serves to either advance or ignore the need for detection of red flags or early warning signal.

Why Crisis Signal Detection?

Crisis signal detection should be the necessary first step to managing crisis. Here is why:

  • Crisis is very expensive. It damages stakeholders’ trust, sometimes beyond repair. It can wipe out the reputation capital an organization has built up over many years and damage its ability to achieve its objectives. What’s more? Crisis threatens the very survival of an organization. The most sensible thing to do is to prevent the preventable ones by detecting early warning signals and addressing the concerns.
  • Detecting warning signals of a potential crisis reduces uncertainty and creates a shared understanding of the situation within an organization. This promotes preventive behaviours that can nip the crisis in the bud.
  • Effective preparations for crisis is not possible without detecting what type of crisis could possibly happen in an organization. It is the early warning signals that point the way.
  • Detecting and addressing the concerns of early warning signals saves lives, prevents losses and starves off regulations which may not be in the best interests of an organization.

Are PR Professionals Prepared?

A casual observation reveals that most PR professionals are not prepared. They seem stuck in the old tradition of crisis management, where emphasis is on how to deal with the media when crisis strikes. Little or no effort is made to sniff the coast for impending dangers in the environment that could spell doom for their organizations. This group of PR professionals see themselves as crisis responders and explains the work as crisis communication instead of crisis management which is more comprehensive and strategic. They forget that the area where PR practitioners earn the most respect of the top management of organizations, as several studies have shown, is in effective crisis management.

PR professionals who think they have to wait for crisis to happen before they act are doing themselves a disservice. The realities of today demand a proactive approach which involves monitoring, capturing early warning signals, feeding the management with information and promoting crisis prevention behaviours within their organizations.

Key Questions To Ask

In their article, How to Display Competence in Times of Crisis, Erika Hayes James and Lynn Perry Wooten suggest the following key questions organizational leaders should ask themselves in order to detect crisis that may be looming in their organization:

  • What are the organization’s vulnerable areas?
  • How can the organization’s vulnerable areas result in a crisis?
  • What situations and practices does the organization ignore that may lead to a crisis?
  • Does the organization acknowledge things that may be uncomfortable to confront?
  • How do the organization’s systems and policies contribute to potential crisis situations?

Candid answers to these questions and analysis of such answers in the context of prevailing circumstances in the business environment can help detect and prevent potential crisis.

A Case Of Red Flags Ignored.

Red flags are early warning signals or indicators of crisis to come. They are pieces of information indicating a deviation from the right path, the right pattern and the right processes in the workings of an organization. They get ignored when PR and other corporate leaders do not ask and answer the kind of questions suggested by Erika James and Lynn Wooten. What follows is usually an avoidable crisis.

In 2014, General Motors suffered such a fate. Its culture of silence and neglect at the time led to delay in recalling cars with faulty ignition switches. Even when Laura Andres, a staff of the company, in 2005 sent emails to the company engineers, including the Vice President of North American Engineering, warning that a 2006 Chery Impala Special car she was driving had experienced an engine stall when moving between a paved road and gravel, the warning was taken with kid gloves.

It took 11 years, 13 fatal crashes and several injuries before the newly appointed CEO in January 2014, Mary Barra, decided to act. This triggered a recall crisis culminating in a federal investigation, congregational hearings and plenty of lawsuits from family members of those killed in cars with faulty switches. CNN Money reported that General Motors agreed to pay a fine of $38million to the National Highway Traffic Safety Administration for the delay in the ignition recall. And it would be subject to closer oversight by the regulator. It spent $107million to repair the cars recalled so far in 2014, and GM shares went down by 18%. Fortunately, car sales remained strong.

One key lesson General Motors recall crisis of 2014 has for PR professionals is that, it pays to have a seamless crisis detection system that permeates an organization, cutting through all departmental and cultural barriers. I am sure what General Motors had at the time was not good enough and they seem to have learnt their lessons.

A Crisis Radar System That Works

According to Timothy Coombs in his book, Ongoing Crisis Communication, issue management, reputation management and risk management can all contribute to crisis scanning. Combined, the three functions provide a broader radar system for detecting red flags or warning signals of crisis. He identified environmental scanning as a key tool used in issues management, which means watching the environment for changes, trends, events, and emerging social, political, or health issues.

Environmental scanning uses both traditional print, electronic and online sources. And the common method is to watch, listen and read publications such as Newspapers, magazines, trade journals, newsletters and public opinion surveys. Monitoring social media platforms and hearing from public opinion experts as well as organization’s stakeholders could also provide useful information.

Risk management, as a tool for early detection of crisis, has an internal focus, according to Timothy Coombs. It assesses the manufacturing process in order to improve quality, locate sources of defects that can trigger recall crisis. It uses legal compliance audits to ensure an organization complies with Federal, State and local government laws and regulations on the environment and checks safety, maintenance and accident records to discover minor problems that could become crisis. It also looks at employees’ use of the Internet and email, does product tampering monitoring to locate packaging and manufacturing issues that promote the likelihood of product tampering crisis and conducts ethical climate surveys to spot ethical issues that could lead to crisis.

The place of Reputation Management as a tool for spotting crisis signal is in its ability to quickly learn of stakeholders’ discontent as expressed in complaints, enquiries or even rumours. Reputation audit and online reputation management tools are often used.

Signal Detection Is Not Enough

Signal detection is not enough. Whether an organization will be able to prevent a crisis depends on the analysis of the warning signals and feeding of such information into the management decisions. The result of the analysis must serve as a springboard for better management decisions and action.

For that to happen, PR professionals must know their onions, build extensive networks within an organization, and be respected enough to be part of the dominant coalition in an organization. They should be respected sources of strategic intelligence for management to respect and treat crisis warning signals with the urgency it deserves.

In conclusion, scanning and detecting early warning signals can save an organization from preventable crises. But success depends on the building of a robust radar system; complete with issues management, risk management and reputation management tools. The signals tracked must be carefully analyzed and fed into the management decisions to enhance a crisis prevention culture in the organization.