Friday, January 13, 2012

Crisis Management: Changing Mindsets to See Opportunities

In a recent discussion with the General Manager of a local FMCG company, I was reminded that the Chinese character for crisis is made up of the symbol for danger and opportunity.

From experience we know that how we respond to a situation is often determined by how we view it. And, in my opinion, it is no different in a crisis scenario. Often times in my work with organizations, I find that in a crisis organizations are too focused on avoiding the “danger” that they lose sight of the fact that they have also been presented with the “opportunity” to build their brand and reputation. This opportunity exists because stakeholders tacitly believe that adversity (just as it does with people) reveals the true "character" of an organization. Thus, how an organization responds will either strengthen or weaken its brand.

For example, if an organization brands itself as placing customers first but responds in a crisis by redirecting blame, then I think the crisis response strategy would have done more harm than good. However, assuming that the organization's initial response is not to redirect responsibility for the crisis, but instead goes the extra mile to address customer's inconvenience at its own expense, then this crisis response strategy would instead strengthen the organization's brand.

Marketing and PR professional will tell you that advertising is expensive. Fortunately, or unfortunately, a crisis will bring with it literally millions of dollars of free publicity. Organizations thus have the choice of either frittering away the free publicity by focusing solely on damage control, or they can spend it wisely by taking actions and making statements to strengthen or build their brand.  Often times, I believe the cost of service recovery will likely work out to be less than on the cost of the publicity given.

In short, when confronted with a crisis, organizations must realize that with the danger comes opportunity. The organization must therefore not focus exclusively on avoiding the dangers, but to seek the opportunity to strengthen and build its brand.

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