Monday, December 27, 2010

The Velcro Effect: When is Enough Enough

I came across an interesting 2001 study, conducted by Coombs (the father of Situational Crisis Communications Theory) and Holladay, that showed an organisation's failure to properly handle a past crisis causes stakeholders to perceive the organisation as having more responsibility when a new crisis erupts. Interestingly, the same study showed that a favourable reputation (gained from the handling of a previous crisis or from other Public Relations efforts) is no better than a neutral reputation. This effect where a negative reputation “attracts and snags additional reputational damage” is known as the Velcro Effect.

So what can PR Managers and Crisis Communicators learn from this study?

Firstly, and most obviously, all crisis must be properly managed. Failure to do so will put the organisation at a disadvantage when another crisis occurs.

Secondly, and less obvious, is that in the event a crisis is managed poorly, efforts need to be made to repair the organisation's reputation. However, since empirical evidence show that there is no difference between a favourable reputation and a neutral reputation, PR Managers and Crisis Communicators can reasonable cap their efforts at returning the company's reputation to “neutral” and hence refrain from unnecessarily expanding resources where no advantage is to be gained.

All companies exist for the purpose of maximising shareholder returns.  As such PR Managers and Crisis Communicators must constantly keep the company's bottom-line in mind and tailor their PR and Crisis Communication Plans accordingly.

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