How to handle a public relations crisis and preserve your company's reputation

Written on Sep 20, 2017

BI_CPAVoice_SeptOct_17
By Jessica Salerno, OSCPA content manager

It’s a professional nightmare scenario. Your company has been publicly embarrassed in a way you hoped would never happen. Everyone knows, or thinks they know, what happened.

Avoid the urge to bury your head in the sand, said Hinda Mitchell, president of Inspire PR Group, because refusing to admit to the crisis won’t make other people will forget.

“Not responding is the biggest mistake you can make because then you set the tone for someone else to define you in the crisis,” Mitchell said.

As CFOs branch outside of “traditional” financial areas in their organization, understanding how to handle a public crisis is an important, if unfortunate, part of leadership. The ability to address and resolve an error made publicly could affect the company’s perception for years to come.

Steps to take during a crisis

“One of the overarching rules you should follow is to keep people looking at you,” Mitchell said. She said it’s crucial to establish that it’s your organization the media and reporters need to contact for the most correct, recent information.

Take stock of the situation as best you can, and then Mitchell said to issue a public statement. Even if you don’t know all the details yet, she said people will be clamoring for information, and putting out a statement establishes that you’re aware of the issue and assessing the situation.

Next, it’s time to eat humble pie.

“Even if you don’t have a lot of detail, it’s okay to come out and say ‘We’re aware this happened, we’re sorry and we’re looking into it,’” Mitchell said. “People want to hear a good old fashioned apology.”

Getting a statement out early on solidifies your position as the go-to in the aftermath of what happened. Of course, be careful with your wording, and check with your lawyers to make sure your statement doesn't admit guilt.

“Be frequent and transparent in how you communicate,” she said. “It’s really important you continue to maintain control of the conversation about your company.”

Next, inform the public that you're conducting your own review or investigation into what happened.

“Another part of crisis response is reassurance,” Mitchell said.

An error was made, and now it’s important to make sure it doesn’t happen again. Let the public know after your investigation how you will develop a process to avoid this in the future.

Stakeholders vs. public perception

“We tend to respond with social media or traditional media first. And it doesn’t mean you can’t or shouldn’t deal with those, but you can’t only deal with those,” Mitchell said. “There are a lot of other stakeholders in a crisis, and that’s another really important thing that people tend to forget.”

Other stakeholders could be shareholders, regulators, board members, employees or even the SEC.

Of course, it depends on what happened as to who exactly are the most important stakeholders.

Social media's role

“Social media is one of the best and worst things to happen in crisis response,” said Mitchell.

It can work in your favor because it gives you the chance to easily and quickly communicate a lot of information in a short amount of time through your own platform.

“But if you want to leverage social media you need to build up your following,” Mitchell said. “Build up followers and engage with them so they know to come to you. Don’t start a Twitter account because there’s a crisis, because no one will be there to see your information.”

On the flip side, video cameras on cell phones have led to numerous public crises breaking on social media, she said. Mitchell suggested you have someone monitoring social chatter to keep an eye on what’s being shared. If there is a common theme of misinformation, it’s up to you to correct it.

When to admit fault

Apologizing for something that occurred in error is a lot different than taking full responsibility for what happened.

“While you’re doing the review and trying to figure out responsibility, start by condemning the act and not the actor,” Mitchell said.

After learning more about what happened it might come out that there are other outside parties at fault, or you could end up being directly responsible.

You want to avoid a scenario where you spoke too early or have to backtrack, which is why it’s important to wait before fully accepting all the fault. Mitchell said it’s also crucial to understand the liability implications for all parties.

This is also wise to remember when the public is asking for someone to be fired.

“A crisis typically has three players: you’ve got victims, villains and a superhero. Often there will be calls for the villain to be taken down,” Mitchell said. “That decision needs to be made on a case-by-case basis.”

If you’ve communicated appropriately that pending an investigation you will take whatever disciplinary actions are appropriate, that’s enough until you have all the facts. You don’t want to make a hasty decision you’ll regret later.

“At the end of the day you want to look back and say we followed our process the way we were supposed to,” she said. “And that includes personnel. You can’t shift and react to external forces if it’s not consistent with what you’ve done as a company.”

Preparation beforehand

Unfortunately, even a well-prepared professional can face a public crisis at some point. Although you might not always be able to predict exactly what it will be, Mitchell said you can prepare for “high likelihood-high impact scenarios.”

Prepare your messaging for various scenarios to avoid getting caught unprepared. Figure out who needs to be on the crisis team, who will be the spokesperson and who you will need to contact if something occurs.

“The cycle really ends when you’ve gone full circle and have the opportunity to work at restoring confidence and trust from stakeholders,” Mitchell said. “Managing the crisis well can get you the most quickly back to that point of trust and confidence.”

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