Tuesday, August 17, 2010

Research: Crisis Communications in the Era of New Media

Introduction

     Research by Brand Finance [1] has shown that a company's brand can account for as much as 84% [2] of its total enterprise value and, based on the size of the enterprise, this can be quite substantial. In its 2007 Report on the World's Most Valuable Brands, Brand Finance valued Coca-Cola's branding at $43.1 trillion. Given a brand's significant contribution to an enterprises' overall value, companies must work to protect its image and reputation in any business crisis. Failing to do so can result in nett losses of up to 15% [3] of enterprise value, while properly doing so, can add an average of 5%.

     Defined as any event that can have a material impact on a company, a business crisis characteristically threatens the company's survival, occurs suddenly and requires immediate and complete management attention. Actions taken by the company to mitigate the crisis is known as Crisis Management. As all crisis will affect a company's image and reputation to a certain degree, integral to Crisis Management is the need to protect the company's credibility and good reputation. This aspect of Crisis Management is known as Crisis Communication and is seen as a sub-set of Crisis Management.

Crisis Communications Role in Crisis Management

     Unfortunately, this inter-relationship between Crisis Management and Crisis Communication is not the most ideal as it limits Crisis Communication's contribution to the company's Crisis Management efforts. An equal inter-relationship is more effective, as managing a business crisis, is not only about addressing the tangible aspects of the crisis (i.e. product recall, damage to property or injury to customers), but also the intangible aspects of the company's reputation, credibility and brand image. See Diagram 1. Effective Crisis Management therefore requires the company to communicate to a large number of stakeholders, each with different issues and concerns, via a Crisis Communication plan that is independant of, but working in tandem with, the Crisis Management process.

Diagram 1: Relationship between Crisis Communications and Management
 
The New Information Environment

     The proliferation of New Media [4] has changed how effective Crisis Communication is to be done. Unfortunately, many companies and PR professionals have not fully understood the impact of these changes and are essentially using out-dated strategies and techniques. The presence of low cost internet access and internet ready devices have broken the monopolistic hold of professionally run news organisations. In today's information environment, practically anybody can create and disseminate “news” contents. These unregulated “Citizen Journalists” can now galvanise populace support as widely and as effectively as any big budget news organisations. Furthermore, the internet's ability to provide instantenous news on a 24/7 basis, consolidated and indexed (via intelligent search engines), has made it the primary source of news [5]. Essentially, the convergence of media technology has fundamentally altered the way individuals receive news and gather information and has created two new dimensions to Crisis Communication – User Generated Contents and Rallying Tools.

a.  User Generated Contents. The internet has put in the hands of every individual the power to express themselves globally. Any individual with a digital device and internet connection can create, publish and distribute media contents. This has effectively put a "journalist" on every street corner of the world and no incident is likely to occur without someone seeing it, recording it and reporting it. Unfortunately, unlike professional journalists who submit themselves to a code of ethics, these “Citizen Journalist” do not abide by such standards and their reportings can be motivated by personal agendas. Such dangers of abuse was demonstrated in Singapore when a group of teenager seat-hoggers threatened to damage a cafe's reputation when they were asked to make room for other customers. See Diagram 2.

Diagram 2: Unethical Behaviour by Citizen Journalists

b.  Tool for Social Movement. Social networking websites like Friendster, FaceBook and Twitter, have brought together individuals with similar friends or interests into virtual communities. The homogenity of these communities, and sense of bond among “friends” with common interests, makes these communities susceptible to being organised and galvanised to support causes. Similar to the earlier example of potential abuse by citizen journalists, these virtual communities can also be abused by individuals. The Greek Riot in 2008 is a case in point where the death of a student, at the hands of the police, need not have degenerated into nation-wide violent protests. The incident could have remained contained pending investigations by the authorities. Unfortunately, irresponsible citizens began spreading unsubstantiated accusations of police brutality on social networking sites. This fanned anti-police sentiments which eventually spiralled out of control. Analysts are unanimous in their belief that social networking websites were the catalysts in the Greek riots of 2008.

Implications for Crisis Communications

     As a direct result of these technological advances, the nature of Crisis Communication has fundamentally changed. In the new information environment, Crisis Communication operates in an environment in which information is:

a.  Near Instantaneous Media Cycle. As acknowledged by Reuter's Director of News Media Development, Chris Cramer, “every key event going forward will be covered by members of the public and not by traditional journalists.” The omnipresence of “journalists,” coupled with technology that enable professional journalists to report the news as it develops, has compressed the media cycle and crisis response times. This compression was demonstrated in Janurary 2009 when US Airways Flight 1549 crash landed in the Hudson River. In that incident, emails, tweets, photos and videos of the incident began filtering through cyberspace 15 minutes before the main-stream media even reported it [6]. In fact, the first recorded tweet occurred 4 minutes after the incident. (See Diagram 3).
Diagram 3: Twitter Breaks the News Again

 
b.  Perfect Information Environment. The ability of internet search engines to trawl the world wide web for information, and to present it collated and indexed, effectively provides stakeholders with perfect information about an incident. This means that nothing is likely to remain hidden forever and that once the spot-light is turned-on, everything related (both past and present) will be revealed and scrutinised. This “know-all” nature of the internet environment is demonstrated in our daily news reports where the subject's childhood associations, past comments on websites or blogs can be reported. In the November 2009 Fort Hood Massacre, the New York Times tracked a posting on the website Scribd allegedly published by the shooter supporting suicide bombings by muslim extremists [7] (See Diagram 4).
Diagram 4: Post Showing Support for Suicide Bombings

c.  Multiple Media Platforms. A 2008 study commissioned by The Associated Press on the News Consumption Behaviour of Young Adults [8] revealed that younger consumers are not only less reliant on newspapers for their news, but that they also consume news across a multitude of platforms and sources. Online videos, blogs, online social networks, mobile devices, RSS, word of mouth, web portals and search engines have become their go to sources. As many of these New Media sources are unregulated, the risk of distortion to the facts is extremely high. Nik Gowing, in his July 2002 article for the Humanitarian Practise Network, describes how facts about an Israeli offensive into the West Bank in the Spring of 2002 to neutralise suicide bombers targeting Israel was distorted by questionable emails, photos, videos and blogs to portray an Israeli massacre of Palestinians [9]. While eventually unsubstantiated, the negative world opinion cost the Israeli Defence Force heavily and forced their early withdrawal denying them the ability to act in self-defence.

     In short, in the new information environment, Crisis Communication is beyond the control of any individual or organisation. Crisis Communication managers must accept that nothing can be hidden forever and that Crisis Communication must be open, fast, accurate, broadly communicated through multiple platforms and comprising a cyberspace component.

Characteristics of Effective Crisis Communications

     To meet the challenges of operating in the new information environment of a near instantaneous media cycle, one in which perfect information is available, and one in which stakeholders get their news from multiple platforms, effective Crisis Communication plans must be (a) open; (b) timely; (c) truthful; (d) broadly communicated; and (e) present in the internet (See Diagram 5).
Diagram 5: Characteristics of Effective Crisis Communications in the Era of New Media
 
a. Open. As nothing in the new information environment can be hidden indefinitely, Crisis Communication managers can no longer try to manage an incident by preventing it from being made public. It must be assumed that all news worthy incidences will be reported and that the role of the Crisis Communication manager is to “frame” the incident so that the company will be seen as positively as possible. Adopting an open reporting approach has two main advantages. Firstly, open reporting will establish the company's credibility with stakeholders with regards to their desire to resolve the crisis. This credibility will in turn position any subsequent actions taken positively. Secondly, being proactive in releasing information about the incident will prevent distortion of the facts. This will allow the company to “frame” the incident in its favour as well as prevent the crisis from spiralling out of control.

b.  Timely. Given the speed with which the New Media operates, Crisis Communication managers can no longer “beat” the media cycle. Fortunately, stakeholders accept that it takes time for a company to gather the facts of an incident and are willing to wait a reasonable time to hear from the company. While there is no hard and fast rule as to what constitutes a reasonable time, an initial statement acknowledging the incident within the 1st hour and a follow-up press conference within 4 hours has so far proven to be the norm. The timely acknowledgement of an incident will also enable the company to gain the information initiative [10]. In addition, as there is usually conflicting information during the early stages of a crisis that causes confusion, the timely release of information will fill this vaccum and reduce distortion of facts. Putting a “face” to the company also allows the company to establish itself as the primary source of credible information on the crisis.

c.  Truthful. In the perfect information environment, false or deliberately misleading statements will be found out. It is not uncommon for stakeholders to search for past incidences to discredit the company's claims or for other similarly affected parties to come forward. Once a pattern of incidences is established, this will imply a cover-up on the part of the company giving further traction to the crisis. Crisis Communication managers must therefore only allow complete truths to be disclosed. This is because in a crisis, the credibility of the company's spokesperson is central to an effective Crisis Communication plan. The Crisis Communication manager must therefore protect the spokesperson's credibility. To fulfil this role, the Crisis Communication manager has to think like a journalists and when facts are doubtful, seek proof from their internal stakeholders before releasing the information.

d.  Broadly Communicated. The presence of numerous news platforms has complicated Crisis Communication as Crisis Communication managers can no longer rely on the traditional press conference to communicate the company's message to all affected stakeholders. Online videos, blogs, online social networks, RSS, web portals and search engines are alternate news platforms that also need to carry the message. As such, the development and release of New Media compatible information, customerised to the different technical requirements of each platform, is integral to a holistic Crisis Communication plan. Given the large number and types of platforms, requiring specialised skills, the Crisis Communication management team alone is unlikely to be able to cope and will need to be augmented with a team from the IT department.

e.  Internet Presence. As mentioned earlier, the perfect information environment allows powerful search engines to instantenously collate and index all related information on the incident for users. Hence all news reports, both positive and negative, will be seen by the stakeholders. To maintain a positive "spin" to the crisis, Crisis Communication managers must ensure that the number of positive reports exceed the negatives. This is done via the proactive and deliberate publishing of information on the internet. Additionally, as the internet “archive” practically everything indefinitely, the company's Crisis Communication plan does not end with the closure of the crisis. The company's side of the story must remain posted so that the company continues to tell its side of the story indefinitely.

Conclusion

    Internet technology has fundamentally changed the nature of Crisis Communication. Companies and PR Professionals operating in this new information environment must understand the technological implications and adjust their approach accordingly. Only then, can the PR Professional adequately serve his or her client.

(If you find this blog posting useful/ interesting, please click the Google +1 button to show your support. Thanks.)

References

1. Independent brand valuation consultancy.
2. http://www.bpcouncil.com/var/10/3143-The%20Measure%20of%20a%20Brand.pdf
3. Dr Rory Knight and Dr Deborah Pretty (1995, Templeton College, University of Oxford - commissioned by the Sedgewick Group.
4. A broad term to describe the amalgamation of traditional media with the interactive power of the internet. Examples include YouTube, Blogspot, FaceBook and Twitter.
5. The Pew Research Center for People and the Press 2008 Report.
6. www.telegraph.co.uk/technology/twitter/4269765/New-York-plane-crash-Twitter-breaks-the-news-again.html
7. www.nytimes.com/2009/11/06/us/06suspect.html?_r=1
8. www.ap.org/newmodel.pdf
9. www.odihpn.org/report.asp?id=2450
10. A crisis communication technique of releasing information to control the direction of the crisis.

1 comment:

  1. Update: Timeliness 15/60 Rule

    The topic of how quickly an organisation should respond to a crisis is often raised. In my workshops, I always advocate that the world does not revolve around the organisation and like it or not, the story will run with or without you.

    As a guide, I advise my clients on the 15/60 rule. That means in a crisis, the organisation should acknowledge the crisis within 15 mins of it occurring, and follow up with a press/ news release 60 mins after that.

    The usual response from clients is that this is impossible as it takes time to gather the facts and craft the statements. I agree. I however also remind clients that stakeholders are reasonable people and that at the 15 min mark, they do not expect complete answers. Essentially, as a crisis unfolds, stakeholders want to know basic information like (a) the facts of the case (i.e. WHAT has happened, WHEN and WHERE did it happen and WHO is involved); (b) your immediate actions; and (c) your next step or what affected stakeholders can do. In the event that you do not have all the facts, it is appropriate to say so. The key point is that you must appear sincere with the facts.

    Having said that, the question still remains whether it is possible for an organisation to acknowledge an incident within 15 mins. To me, the answer is yes and the solution is through preparation and practice. Preparation is about having the necessary templates and “drawer” plans on hand so that when an incident occurs, it is simply a matter of referring to them, adjusting it and issuing it. As for practice, it means having regular drills where all members in the crisis management team is well versed in their respective roles.

    In summary, crisis communications is not something you think about when it happens. To be effective, crisis communications is a deliberate process where an organisation prepares for it.

    ReplyDelete