Two-Way Street

PR, social media, events and incentives – Collaboration & communication ideas for demanding businesses from The Castle Group's Mark O'Toole

Posts Tagged ‘crisis’

Calculating for Crises

Posted by thecastlegroup on October 5, 2009

We asked Adam Friedman, of Adam Friedman Associates LLC, our PRGN Investor Relations partner, to share  his expertise on IR-related crises. Please read below for this sage advice.
 
Planning for a crisis seems oxymoronic, but, in fact, it’s only the rarest of crises that is totally unforeseen. These might include death, acts of violence or of God, so to speak, like fires, explosions, etc. These are in the minority and even they can be addressed.
 
In the financial arena in which we in investor relations operate, crises tend to fall into categories: litigation, surprise takeovers, earnings shortfalls, regulatory violations and so on. In our experience, many of these can be predicted because there are usually early indications of a problem that could eventually bubble up to the surface. Over the years, many of our clients have experienced earnings shortfalls, which is one of the more common corporate crises. It is rare that within the company there aren’t early indications; the IRO may not have known to what degree, but the fact is usually known with enough time to plan for it. Similarly, every corporation will be sued for something sooner or later, so it is not a question of if, but when. When you anticipate it, you can plan for it.
 
So how does one plan for the unexpected? By developing, much like the military, a doomsday scenario. The IRO and the IR firm should be working together to develop procedures for the many categories of potential crises that can befall a public corporation. Even the most unlikely scenarios can be anticipated and managed if there are procedures in place that provide best practices and direction.
 
Recently, one of our clients was the victim of a surprise hostile takeover attempt. While we scrambled to address the particulars of the event, we used the crisis manual we had prepared some time previously as a roadmap. There was no confusion about who the spokesperson was, or who the key members of the crisis committee were. We had everyone’s contact information, and within hours of the announcement, the IRO and our agency were mobilized and functioning. Nobody panicked and while the situation was fluid, it was under control.

This can be true for all but the most unforeseen events. So, the key is not to say we can’t plan for a crisis; what is needed is a crisis response plan that incorporates as many variables as possible. And the best time to do that is when there is no crisis at all.

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Eating a peanut butter and crisis sandwich

Posted by thecastlegroup on March 20, 2009

Today, The Castle Group’s Hilary Allard (VP of our consumer practice), talks about the finger-pointing, lack of crisis preparation and overall miscommunication that have surfaced as a result of the peanut butter salmonella crisis.

 

The ongoing House committee hearings on food safety resulting from the recent Peanut Corporation of America recall, brought to light an industry dilemma illustrated in an article in today’s New York Times: “F.D.A. officials said they largely relied on the industry to ensure the safety of food. But industry representatives said at the hearing Thursday that they relied on the F.D.A. to ensure that food was produced safely.”


Clearly, there needs to be a defined chain of reporting when it comes to food inspections. Our increasingly complex food sourcing demands it.  

 

This conflict underscores the need for all food companies to have a comprehensive crisis communications plan in place. The time to create such a plan is before a crisis happens, not when it’s underway. Creating a crisis communications plan is an investment of time, money and effort, which pays off ten-fold if and when it needs to be used. Having the full engagement of senior executives to explore all the possible “what if” scenarios is critical.

 

Even when companies feel that they are behaving ethically and performing due diligence, flaws in the system may cause manufacturers to become swept up in a crisis. Having a clear action plan in place that allows for a swift response and transparency can save a company’s money, time and reputation.

 

 

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