Organizations in crisis need to communicate immediately because communicating immediately usually makes the crisis shorter-lasting and less severe. If an organization does not respond to a crisis quickly, the crisis will response itself changes the crisis. An organization's initial response to a crisis may change the crisis itself. A proper crisis response will always lead to better result, whereas an inadequate response can always guarantees worse result. For example, Toyota's safety issues were focused on the cars themselves at beginning. However, Toyota does not respond to this safety crisis quickly that cause the coverage quickly shifted to Toyota's poor handling of the crisis and management problems. Toyota's mistake was thinking about the safety issue only as an engineering problem rather than a management problem. This mistake cause Toyota faced the loss from its sales and harm its brand image. The failure of crisis communication cause Toyota needs to spend several years to rebuild its brand image. If Toyota can respond this safety crisis rapidly and properly, it can minimize the damage from this crisis. Furthermore, effective communication during the crisis can help an organization to mitigate the crisis successfully.
According to our textbook, the following eight steps must to be taken while communicating during a crisis. The first step, you have to get control the situation as soon as possible. As a manager, you need to define the problems and set measurable communication objectives for handling possible problems. Secondly, gather as much information as possible is very important while facing a crisis. Managing information effectively can make a company to deal with the crisis quickly. Third, managers should set up a centralized crisis management center while communicating during the crisis. Organizations should offer a comfortable location for media to use during the crisis and all communications about the crisis should come from this platform. Next, managers need to avoid silence and delayed responses. Organizations should communicate with all constituencies as soon as possible in order to deal with the crisis because the rapid responses to the problems can minimize the damage from the crisis. Fifthly, understanding the role of the media and media’s mission in a crisis can help an organization to deal with the crisis successfully. Managers must understand that using the media effectively can help an organization beat the crisis. Sixthly, companies should consider which constituencies are top priorities and communicate directly with them. Communicating directly with affected constituencies can increase the efficiency of communication during the crisis. Seventhly, the business must go on despite the crisis. Managers should remember that business must continue when they face the crisis. Finally, managers need to make plans to avoid another crisis immediately. After the crisis, the corporate executives need to work with managers to ensure that an organization will be better prepared for the next crisis. Effective preparation is the key to handling crises successfully in future.
As Cheng just mentioned, one of the most important steps to handle a crises successfully is an effective contingency plan. Solid planning would not only alleviate the pain once the crisis arrives, but also prevent the crisis.
ReplyDeleteAt my previous job, for instance, some simple steps were followed to avoid a leadership crisis. Given that the lack of leadership can certainly lead to a crisis, the organization established a plan to prevent it. The general manager, the financial manager, and the trading manager, which accounted for the most strategic functions within the company, never travelled together. Even if they had to be at the same time in a meeting oversees, they traveled in different flights so that in case a natural cause –or a malicious intent- damaged a plane, not all executives will be affected.
They were also very concerned about weather conditions and spent a lot of time assessing the risks for the organization. Because most of the profits in the firm came from agricultural businesses, they were very well covered with insurances, and tried to diversify the planting of the crops in many areas concurrently. One time a small tornado hit some of the silos they used to store tons of corn and soybeans. Thanks to have developed a very good plan, they were able to handle the situation quickly and to avoid affecting one of the main constituencies: customers. The insurance certainly will cover the damage, but what about our clients overseas, who were waiting for their shipments of corn and soybeans? Our trading manager had invested a lot of time developing agreements with other export companies, so in case something like this happened, they would lend him as many tons as necessary to cover his due contracts. The same cooperation was expected from my boss in case something happened to the other company instead. This kind of natural disaster would have led to a crisis by defaulting many contracts with very important customers, but was easily handled thanks to previous planning.
Most of the comments in this blog highlight the importance of being prepared in advance for a crisis. Recognizing the significance of this matter, most companies count on a contingency plan to bear a potential crisis. However, why is it important to have a plan? I think that it is important because a plan helps the organization to provide a fast response to a crisis. The first response can indeed help overcome the crisis or at least shrinking the negative effects of it.
ReplyDeleteThere are plenty of examples that show that a quick response to a crisis can make a difference. When my uncle had a stroke two years ago, fortunately I was there with him and I was able to take him immediately to the doctor. Thanks to the treatment that he received within the first 3 hours of the crisis, the doctors could prevent further damages in his brain and reduce some of the negative effects. In the business world, a fast and effective response to a crisis also can help to overcome the crisis. My family business, for example, owns a parcel of land where beef cattle is raised. This activity knows no vacations in the sense that the cattle should be taking care of in a daily basis. The issue is that if one farm animal gets sick it can infect the rest of the animals in just a few hours. In this context, early detection of a disease and immediate corrective actions can avoid further losses. The contingency plan of my family business includes a list of veterinarians who can be contacted in case of an animal health crisis occurs. I think this simple example shows the importance for an organization to count with the right people at the right moment to overcome a crisis as smoothly as possible.
Cheng-Hua’s blog immediately makes a great point in that during a crisis situation time is of the essence therefore the messages that need to be communicated should be done so as fast and most effectively as possible. The results of a company’s actions are immediately present when it comes to dealing with a disaster. I failure or delay to act can only further exacerbate the situation whereas a prompt response by the company can significantly decrease the breadth and consequences of the crisis. Besides Toyota other good examples of organizations not communicating effectively and subsequently not reacting effectively to a crisis were discussed in class today, BP, Chi-Chi’s, and NGOs such as FEMA after Hurricane Katrina. On the opposite end of the spectrum, I worked for a grocery store for a number of years and experienced a number of crisis like situations. In one instance we were hit by a hurricane and lost power and were flooded. It was up to the managers to organize employees into strategic groups responsible for things such as moving products to higher areas or starting up generators to save chilled products. It was pertinent that as these tasks were being completed management was made aware and they could then designate the next priority task. In another example there were a number of recalls due to contamination such as baby formula, peanut butter, pet food, tomatoes, and spinach/lettuce. While these occurrences were relatively ‘small’ crisis it was important that information was communicated effectively and the proper measures were taken because negligence to do so could’ve had fatal consequences. Management even took their response a step further by evaluating their performance/actions after the events in effort to identify what worked well and what could be improved on. Grant it no one wants to think that they will experience a crisis it is vital that they are prepared for one.
ReplyDeleteAs discussed in the class today, we know that the crisis can be of two kinds - Natural crisis and man made crisis. Some of the examples of natural crisis are tornadoes, hurricanes, tsunamis and earthquakes etc. where as the man made crisis are terror attacks, accidents, unexpected events affecting corporate reputation etc.
ReplyDeleteIn one of my previous blogs, I had used an example of an earthquake (with about 7.2 Richter magnitude scale),in my state back in India in 2001, which for us being in the construction business, had affected us so much. That earthquake had left its negative impact for a long time. Especially, it was difficult for the small and medium sized companies to communicate to its customers. Few of the buildings had collapsed due to that, and people were losing their trust from the quality of the companies like mine were offering. They were scared to have an apartment in a high rise buildings, the government as a result of buildings crashes, had tightened the regulations for the structure and designs and it had affected the whole industry, as In Ahmedabad, India small/medium sized companies was the industry because of early growth stage. The communication management concept was not well known at that time for the small companies in India. The only channel everyone knew was media, paper and TV. It brought all the companies together to defend themselves and which later helped the industry a lot in government relations and also in public relations.