Amanda Vermeulen July 2006 Global Corporate Governance Forum Crisis Management: Communicating with...

Amanda Vermeulen July 2006

Global Corporate Governance ForumCrisis Management:

Communicating with the Media

Amanda Vermeulen


What is a crisis?What is a crisis?

Crisis: an unstable or crucial time or state of affairs whose outcome will make a decisive difference for better or worse (Webster's New Collegiate).

Crisis management: a systematic response to unexpected events that threaten the people, property and operating continuity of the organisation.

The role of the media: (should be) to provide a balanced view to allow the public to shape informed opinions and make informed decisions.


Stages of a CrisisStages of a Crisis

1. Crisis build-up – hints or cracks appear2. Break-out – triggering event causes the crisis to

erupt3. Abatement, which can linger for years4. Termination, when the crisis is no longer a threat

or has caused the demise of the entity involved

Strategic media communications are essential at every stage.


Planning for a crisisPlanning for a crisis

• Prepare contingency plans in advance• The only people who should speak to the

media are the crisis management team members

• Move quickly because the media often builds a view in the first few hours – “the Golden Hour”

• Give accurate and correct information. Manipulating information can backfire

• When deciding on a plan of action think about both the short term and long term


What not to doWhat not to do

Four examples of poor media management in a crisis:

• Three Mile Island• The sinking of the Kursk• TWA 800 crash• South Africa’s crime problem


"I think the best way to put it is that

there were very poor

communications at the time. We

weren't able to get clear, accurate

information out to the media and the

public. ... And at that point the

media went to other sources for

their information." Tom Kauffman

Three Mile Island, 28 March 1979


• A relatively minor malfunction in the secondary cooling circuit caused the temperature in the primary coolant to rise

• The reactor shut down automatically • A relief valve failed to close, but

instrumentation didn’t reveal it• So much of the primary coolant drained away

that the reactor core overheated • The core suffered severe damage • BUT only a small amount of radioactive

material was released

Three Mile Island Three Mile Island


Three Mile IslandThree Mile Island

The communication mistakes:• Operator Metropolitan Edison (MetEd) released

little information in the first hours and days• First news conference was only 12 hours after

the accident but news had already leaked• MetEd official admitted they knew radioactive

particles were entering the atmosphere as even as they held the press conference. But a decision was taken NOT to inform media and public.

• A company official later admitted he did not mention any releases into the environment "because he had not been asked directly.”


Three Mile IslandThree Mile Island

The communication mistakes:• MetEd chose to withhold information that was

perceived as being in the “vital interests” of the general public once it finally became available

• What appeared in the media was "informed speculation," often from sources in the antinuclear movement and often of an alarmist character

• the public was unable to determine its accuracy• the media had not reported on nuclear

accidents before so had little experience in verifying the accuracy

• this led to widespread confusion and long-term distrust of the nuclear energy industry


Russian submarine Kursk

sinks, all souls are lost.

President Vladimir Putin is slow to react, remaining at his holiday home in Sochi for six days.

The Kursk


• While on a naval exercise, the Kursk sinks in the Barents Sea on 12 August 2000, trapping the crew

• The navy only makes an announcement the following day

• A rescue is only mounted on 14 August• Russia asks for international help on 16 August• Putin returns from vacation on 18 August, six

days after the sinking • Putin meets the families of the Kursk’s crew on

22 August, admitting to a “feeling of guilt and responsibility”, but attacks the media for making political capital out of the disaster on TV.

The KurskThe Kursk


The communication mistakes:• All information was released at navy base so

media were effectively locked out• Navy withheld much information, forcing

media to ‘bribe’ officials for crew list• Sensational footage of mother of one of the

crew being ‘sedated’ against her will by officials

• Government press officials reacted extremely slowly

• Shooting the messenger

The KurskThe Kursk


TWA Flight 800 explodes off the coast of Long Island on July 1996,

killing all 230 passengers. Witnesses

claim the Boeing 747 was downed by a

missile. The official explanation was a fuel

tank explosion. The controversy remains

unresolved to this day.Simulated photograph

TWA Flight TWA Flight 800800


TWA Flight 800TWA Flight 800

• TWA Flight 800 explodes and crashes into the sea on July 17 1996

• Eyewitnesses report seeing what looked like a missile hit the plane

• NTSB blamed faulty wiring• Families and some media claim a cover-up and

conspiracy• TWA goes bankrupt in 2001, aggravated by the

crash


TWA Flight 800TWA Flight 800

The communication mistakes:• TWA was not the primary source of information

on the first night• The CEO did not go to the crash site quickly

enough• Failure by authorities to deal with circulating

conspiracy theories fuelled suspicions• Final report took four years to complete


WRONG! Three recent suicides at

Guantanamo Bay were described by Colleen Graffy, deputy assistant secretary of state for public diplomacy (sic) as ”a good PR move to draw attention.”

Camp commander, Rear

Admiral Harry B Harris Jr said “this was not an act of desperation, but an act of asymmetrical warfare waged against us.”


Charles Nqakula says those who complain about crime are unpatriotic moaners. “They can continue to whinge until they're blue in the face, be as negative as they want to, or they can simply leave.”

A United Nations survey suggested

South Africa has the third highest

murder rate, after Colombia and

Swaziland.

SA’s crime problem


Crime in SACrime in SA

• In 2004/5 carjackings came to 12 434 compared to 14 691 in 2002/3

• Murders totalled 18 793 in 2004/05, down from 21 553 in 2002/2003

• Interpol says South Africa’s overall crime rate is comparable to other developed countries. But what makes SA unique is the incredibly high level of violent crime.

• 50 murders a day, • 1 rape every minute (Unilever Institute, 2004)• Almost 2000 farm murders• 50 – 59 murders per 100 000 population

(Interpol)


Crime in SACrime in SA

The communication mistakes:• The authorities attack the media and the

victims• They obfuscate the facts• They deny the problem (diplomats)• Communication is reactive and defensive• No crisis management plan• No trust in the authorities to handle the problem• The CEO (President) is silent on the subject


• Frightened people absorb negative information (TMI, TWA, SA) more than positive information. In a crisis it takes three pieces of good news to balance one piece of bad news. Vincent Covello, Director of the Centre for Risk Communication in New York. Over-reassuring content is alarming.* (TMI, SA)

• Audiences are less tolerant of complexity

when they’re upset.* (TMI) Peter M. Sandman • Get the word out. (TWA)

DeductionsDeductions


GuidelinesGuidelines

• Keep your friends close but your enemies closer

• Chart the waters• List all the risks and threats in your

industry• Prepare different crisis scenarios• Ask yourself tough questions and have

answers ready• Be on message all the time• Nominate a crisis management team


GuidelinesGuidelines

• Make sure your frontline people are well-trained!

• The buck stops with the board (Exxon, TWA, SA)

• Media training is essential - comfort in front of the press does not come naturally

• Be honest and prompt with information• In a crisis it’s okay to admit what you don’t

know (Tylenol versus TWA)• Communication advisors must be trusted by

the board• Be sensitive – all crises have a human element


The Wall Street Journal: "Experts Praise How Merck Broke the News" saying Merck's withdrawal of Vioxx - along with extensive media appearances by CEO Raymond V. Gilmartin and key members of the board - "exceeded the norm.“ Gilmartin turned up twice on CNBC within an hour and Merck's media team had director Lawrence Bossidy, appear soon after University of Michigan professor, Gerald Meyers, says "they're being very open, bringing in top people to lend veracity."

RIGHT!


The end gameThe end game

• A crisis is an opportunity for change• Rally corporate culture around a transparent

message of integrity • Communication can be an effective strategy to

improve/instil values• Make the media your friend, not your enemy• BUT… how you start is how you’ll end


The objective of crisis management is to influence public opinion to the point that positive opinions held in the post-crisis period are at the same level or greater and negative opinions are at the same level or less among any stakeholders.

Tylenol


“A good reputation is more valuable than money.”

Publilius Syrus, Roman author

1st century BC


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