Strategising Crisis Response based on Crisis source: How effective is it?

Crisis responses are unique to each crisis situation, and a response can only be useful if its use generates the much needed organisational and stakeholder’s relief from a crisis situation. However, the goal for any crisis intervention remains the same – to wade through difficult times and retain a positive and strong organisational reputation, after the crisis.

A number of factors prevailing at the material time affect how a crisis response is designed. In certain cases, crisis responses can be planned based on the cause or source of that particular crisis.

Crises can result from a situation that we absolutely have control over, but for some reason - be it negligence, inefficiency, or corruption - a crisis eventually occurs. Such crises can range from sexual harassment in the rank and file of an organisation, generating a huge staff and public outcry, condemnation, and lawsuits; to a breakdown in the provision of essential public services by Government agencies, resulting in people’s lives being in danger.

A good and more recent example of crisis resulting from a controllable situation is the one in which the city of Flint in Michigan, USA, started collecting water from the corrosive Flint River as a drinking water supply source, switching from its usual treated source in Detroit. The city, however, failed to properly treat the water, exposing people to lead ingestion, since April 2014. A cost cutting move (presumably preceded by lack of judgement) resulted in the population of Flint potentially getting lead poisoning, and exposing at least 12,000 children to danger (as children are more vulnerable to lead poisoning than adults). A few deaths have already been connected to the lead contamination. Residents and groups have raised their voices, demonstrated, and put forward remedial demands for the authorities to follow – escalating the crisis further. President Obama declared a federal state of emergency in Flint on January 16, and the Governor for Michigan also issued an apology and promised to fix the problem. Consequently, the public placed the crisis responsibility on the city authorities, and specifically on certain individuals. Several lawsuits have been filed by people and groups, against individuals, and investigations have further been instituted by authorities.

Crises can also emanate from situations that we have no control over (unforeseeable natural disasters), such as the displacement of settlements by the earthquake in Nepal or the devastating water flooding in Malawi – natural events that breed crisis situations. In such crises, and where there is no human negligence to warning, stakeholders and crisis victims are preoccupied with how responsible agencies responds to reduction of the severity of the crisis, and protecting the lives of victims from further danger. Essentially, authorities and relief agencies (government or any other organisation) are under operational and reputational scrutiny.

The source-based crisis response validates the importance of understanding why and how the public apportions crisis responsibility, and also how the public perceive an organisation during a crisis. In a situation where a crisis is as a result of human error or system inefficiencies, the organisational level of responsibility for the crisis is expected to rise, as opposed to a crisis in which an organisation has little control over the source or cause.

In general, attacking and responding to a crisis situation based on the cause or source of a crisis has the audacity to allow for a quick identification of a crisis resolution roadmap for both the crisis victim and the organisation. This is primarily because by zeroing-in on the cause, organisations subtly look for a way to distance itself (to a certain degree) from the crisis and place blame on the causative agent. Equally, the crisis victims are looking for a ways that will help them get relief from the crisis situation much quicker than the processes an organisation responsible for the crisis may envisage. However, the latent for an organisation to be seen as not being in sync with the emotions of its public is considered high when blame is pushed on. Why? By deflecting attention off its corporate self and trading blame off, an organisation is somehow perceived as not being ardent to accept responsibility of the crisis situation. In this instance, an organisation is distancing itself from the crisis spotlight and may be perceived as not empathising enough with the crisis victims – its primary stakeholders.

This approach, however, should be seen as resultant from a crisis situation analysis, and must not be an isolated activity - it should rather provide a point of departure to weigh out options and for placing a finger on what comprehensive crisis response the organisation need to engage.

Nevertheless, a crisis response can only be useful if its use generates the much needed organisational and stakeholder relief from a crisis situation, as well as an opportunity for improving.

#CrisisManagement #CorporateCulture #StrategicPlanning #PJElwyns #ReputationManagement

Your brand reputation and the corporate culture has the potential to minimize the impact of a crisis

A brand that is worth its reputation can play out well for corporations undergoing a crisis, and prove to be the difference between retaining, and losing customer loyalty. Positive brand reputation is one of the most valuable assets that corporations intensively invest in. Corporations spend fortunes building brands, and put together good public relations around them so they remain favorable, and ahead of competition.

Let us have a perspective on this view by turning back the hands of time to four years back, when the world top brand, Apple, announced the introduction of iOS 6, an operating system with an Apple self-designed mapping system (a move that would see Apple detach its reliance on Google maps).

In June 2012, Apple announced that the new mapping system will provide ground breaking real time traffic experience, and a turn-by-turn navigation function. The innovation received a warm and outpouring support by car makers including Toyota, Mercedes, Honda, Audi and BMW.

Apple eventually released its iOS 6 on its iPhone and iPod in September 2012, allowing users with older devices to upgrade to the new system, whilst new gadgets were pre-loaded with the new map. The Apple map, however, turned out malfunctioning. It misplaced landmarks, miscalculated distances, named features incorrectly, and made some features nonexistent, escalating the issue into a crisis. With over 2 million purchases of iPhone 5 within 24 hours of launch, the map malfunction was an instant crisis with potential to dent Apple’s 'midas touch' reputation. In a specific case, the Australian police advised motorist against using it, describing it as life threatening because a motorist was misdirected into a national park, whilst others drove themselves into potential accidents.

Apple received criticism from both the media and consumers. The Dutch satellite navigation company TomTom, which was responsible for the map data distanced itself, placing the crisis focus on Apple. The crisis also took a toll on Apple, as stock hit a slump of more than 20% to $US547.06 in November 2012 from above $US700 in September 2012.

Realising the level of damage the brand reputation would suffer (and apart from the vice president leaving the corporation), the Chief Executive Officer, Tim Cook made a public apology (even though other options were plausible), and admitted they had fallen short on their promise. Further, Apple offered its users adjusting information on alternative maps, with a promise to improve on their product. The apology alone had the potential to moderate the crisis as stakeholders associated the action with Apple’s acceptance of responsibility. The apology was given on the back of the investment that Apple had already made on its brand reputation. Not only did the apology reduce the impact of the crisis on Apple and its consumers, but it also gave assurance for continued innovation and quality of its products. Apple's persistence on its history on quality and innovative products (as the salient message in its communication), also influenced the direction of discussion, generating sympathy and inducing user’s continued appreciation and identification with the brand. Further, by offering information on alternative maps, Apple helped to reduce psychological, physically, emotionally, and financially stress on users. Apple positioned itself as a caring and listening brand as reputation threats increased.

Apart from redirecting its map users to competitors as a recovery strategy, Apple invested in developing a map application with Google, underlining the importance of building rapport within an industry, and their commitment to a promise. Apple’s reputation played out well for the brand as, despite the crisis, consumers were sure the brand would eventually deliver a quality map product, and they did by December 2012. The iPhone 5 launch hype and the media focus on the launch generated before the crisis also played out well for the brand as the map was just one problem on a quality product with other functions working.

Taking into consideration the reputation of the company, it is compelling to suggest that investing in quality of brands, and achieving successes with the brand reputation cannot just win you loyal customers, but also protect you by retaining your customer base and your brand’s public reputation when a crisis occurs. Apple reputation of providing world-class products continue to create a market reputation in which its products are seen favorably as before.

Crises involving well reputed organisations may have less negative impact than for the lesser reputed organisations. What is your brand or corporate reputation?

#CrisisManagement #CorporateCulture #BrandReputation #PJElwyns #ReputationManagement

Leadership and Crisis Management

Crises are inevitable in modern environments, the substance that should matters most to leadership is; what type of crisis will occur, when, and how leadership will respond in managing the crises. The increasing competitive environment, increased human activities, and demands for better living continuously place individuals, organisations, groups, and governments in situations susceptible to crisis. In such situations, leadership (self and group) plays a critical role in shaping how crises are handled.

In April 2010, bp’s drive to increase its profitability and sustain competitive advantage in the oil market resulted in what is famously known as the Bp Deep-water Horizon oil spill. This crisis resulted from an explosion on bp’s oil drilling rig, in which 11 people died and 17 were injured. The oil spill caused a massive environmental damage in the Gulf of Mexico, affecting tourism and livelihood of the people of the gulf. The behavior of Chief Executive, Tony Hayward who demanded his 'life back' and chose to go on a holiday during the crisis period was perceived as bp being out of sync with the crisis situation at hand. The CEO’s inability to handle the crisis effectively cost him his position and did further damage to the ‘beyond petroleum’ brand reputation. This highlights the importance for organisational leadership in managing crises effectively.

Leadership is significant in the overall (organisational) direction and becomes more eminent where an organisation undergoes crisis situations. Thus far, a leader’s behavioral dispositions in crisis situations are critical cues on how the overall entity will respond to an unfolding crisis. The importance of leadership approach during crises illuminates the rationale that crises shape people’s perception of their leaders. Unfortunately, while modern (organisational) operating environment is far much prone to crises than any other time before, many leadership training do not prepare executives for crisis management.

This is even exacerbated with the fact that most leaders perceives crises as a catalyst for problems, (and not as an opportunity for learning and creating a new beginning), because crises disturb an (organisation’s) stability by creating potential for loss of business; loss of reputation; and endangering organisational present status. However, (organisations) cannot effectively deal with crises situations without effective leadership. This suggests that in responding to crisis, leadership assumes ‘the buck stops here’ attitude, and is responsible for the overall attitude the entire organisation attains in resolving challenges.

A very good example is that of George W. Bush. Returning from a reputation sinking recounting of Florida presidential ballots debacle in 2000, G.W was mostly perceived as a weak president and his approval rating was the lowest of any winning team. However, closely followed by the 9/11 attacks, G.W took an aggressive stand against terrorism, sounded more resolved and decisive, became eloquent, and sided with the people. His action not only engaged a world crusade against acts of terror, but also endeared him with the people. His approval rating immediately went up.

Crisis management strategies that an (organisation) may adopt may not only be prompted by organisational environment factors, but are also closely knitted with the efficiency of prevailing leadership.

#CrisisManagement #Leadership #PublicRelations #PJElwyns #ReputationManagement