Crisis Communication

What is a crisis?

Organizations can face two kinds of crises; those that can not be avoided (fro example natural disasters) and those who can (human error, negligence or malicious intent). Human-included crisis can be further divided into cases where the company is at fault (negligence) and where it is not (crime) Negligence is an example for a company’s fault, whereas crime is an example of no fault by the company.
While all crises are different they still have some same crisis characteristics:

  1. The element of surprise: leads to a loss of control, which makes the crises very difficult to handle
  2. Insufficient information
  3. Quick pace of events
  4. Intense scrutiny

The Online Face of Crises

With the new millennium a new type of crisis appeared namely online crises. Serious business crimes are for example data theft, or damaging the computer system with a virus. The internet can also be used to create anticorporate, antibrand “communities. Additionally a company image can be seriously damaged through web logs and online reviews of the company’s products. A recommendation for companies is to build u their own online presence, through online pages, and build a good connection to the online world.
How to prepare for crises
First it is essential for every company to understand that it can find itself involved in crises, no exceptions. There are certain steps, how to prepare for a crisis.

  1. Access the risk for your organization. Make a plan for potential crisis-situation and determine the effects on your constituencies.
  2. Set communication objectives for potential crises
  3. Analyze channel choice
  4. Assign a different team to each crisis
  5. Plan for centralization
  6. What to include in a formal plan?
  7. Communicating during crisis

An 8 steps plan helps you to communicate during crisis situation.

  1. Get control of the situation by defining the real problem and set communication objectives. 
  2. Gather as much information as possible
  3. Set up a centralized crisis management center
  4. Communicate early and often
  5. Understand the media’s mission in a crisis
  6. Communicate directly with affected constituents
  7. Remember that business must continue
  8. Make plans to avoid another crisis immediately

Conclusion

Crises are times of instability, where it depends on the leadership activity and decision making the outcome of the situation. In some cases companies can emerge even more respected out of a crisis, if they handled it well.

 

“I work in a French company during six months last year as a derivatives sales and they are now famous because a trader has lost around 5 billion euros during the last months. I was very aware about this story because I worked with this trader during 6 months. I called him everyday but I did not like him too much because he took usually long time to answer me and was not so cool with me. I was just a trainee. When the news was published I understood better why he was so busy. During the two last month of my internship, I had to come to work 1 hour before the regular time because this employee did not do his job properly. During this crisis time, the media was very interesting in this story and communication for both company and trader was very important. This is a description of the communication crisis in this case.
On January 24, financial markets around the world shook: a rogue trader of Société Générale had cost his employer 4.9 billion euros. The bank rushed to sell the trader’s assets before setting up a crisis communication team to manage the fallout. Their task: to deal with journalists’ requests and the anger of partners, shareholders and clients. Under communication director Hughes Le Bret’s leadership, the bank called two companies specialising in crisis management: Image 7 and Harrison & Wolf. The latter agency has an impressive track record, having already managed the Erika tanker shipwreck for French petroleum giant Total and the explosion of the AZF chemical factory in Toulouse in September, 2001. In less than 24 hours, the team set up its base and prepared a communications strategy and Daniel Bouton, Société Générale’s chairman, prepared himself for a press conference. “Increasingly, companies have had to call upon consulting firms specializing in communications in crisis situations,” explains Ludovic François, risk management professor associated with the Parisian business school HEC. “They can no longer use the press service departments with which they have good relations. Electronic media now means that anybody can give their opinion,” adding that “in a crisis, a PR agency’s role is to downplay an extraordinary event-quite the opposite of classic communications work, which is to play up a rather ordinary event.” One of these experts, Christophe Reille, is now managing Kerviel’s communication strategy. “It’s a rare situation,” says François. “A crisis communications expert costs 1,000 to 2,000 euros per day on average.” Reille, who recently opened his own agency, told FRANCE 24 he was approached by the trader’s lawyers. “They wanted me to take care of media relations because they had neither the time nor the inclination to do so.” Reille is a specialist of communications when under legal pressure. In other words, his role is to “intervene when companies struggle to communicate at a time when the law (…) does not let them express themselves as freely as when they are trying to sell a product or launch an advertisement campaign. Our role is to help them react to an atypical situation and help them adapt to a situation they can neither predict nor anticipate.”
Reille chose a low-profile strategy for Jérôme Kerviel, “favouring communication with the judges – and explaining events to the media later.” He also organised a photo shoot with an AFP photographer. The snapshots show a gentleman, one who can be seen in the role of “scapegoat” for Société Générale and who is “not trying to flee,” but rather cooperating with justice. François believes this is a good approach. “The photos personalised him. Kerviel looks like a nice guy. In a film, he’d be played by Tom Cruise. The fact that he is taking responsibility for his acts gives him credibility.” Maurice Botbol, chief editor of the strategy and intelligence information publication Intelligence Online, agrees, saying that Société Générale’s communication strategy is “less effective,” even if the company’s first reaction, to “cry fraud and demonise Jérôme Kerviel
during the outcry, was a shrewd one.” “They implied that he had lined his pockets in the process,” he says.
According to François, “this stance helped contain the first shockwave, but it’s difficult to maintain over the longterm.” Their choice contradicted the main principles of crisis communications: “transparency, truth and goodwill.”Even Bouton’s proposal to forsake six months’ salary was “clumsy,” Botbol believes. “The amount is negligible compared to the sum lost, and what’s more, his salary is only a small part of his overall income.” Now, it seems that Société Générale’s crisis team is avoiding questions from the press, with Harrison & Wolf’s Alquier-who frequently uses public opinion to influence the course of events-refusing to comment. “An investigation is under way. Let the law do its job,” he told FRANCE 24. It’s a stance that surprises François, the analyst adding that it is “difficult to draw quick conclusions on crisis communication strategy. Influencing public opinion is a complex endeavour. The result does not really depend on the strategy. A bad crisis management tactic can still lead to good results.”

Jerome Kerviel, 797,000 results on google

Jerome Kerviel on CNBC

Leave Jerome Kerviel alone

 

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Published in: on July 2, 2008 at 11:20 am  Leave a Comment  

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