It’s inevitable that your business will have to deal with a crisis at some point. And while your company may be able to keep a lot of crises at bay, when outside or uncontrollable factors come into play, you’ll have to think on your feet. Situational crisis communication theory and crisis management plans will guide you in the right direction.
First things first: don’t panic. Stay calm. You have a plan for this (or you will when you’re done reading this article).
How your company handles a crisis is oftentimes more important than the crisis itself. The crisis will eventually end. What will last will be your reputation and how you responded to the situation.
Communication Theory: Defining a Crisis
According to the Institute for Public Relations, a crisis is something that has “a significant threat to operations that can have negative consequences if not handled properly.” Put another way, when unexpected (or unprepared for) problems upend a company’s stability, a crisis can result.
Moreover, a crisis has to have these three elements:
- The problem must pose a threat to the company.
- There must be an element of shock or surprise – what happened wasn’t expected.
- The issue forces the business to make a fast and (hopefully) effective decision.
A crisis will create a threat in one or more of the following four areas:
- Financial loss, which can include loss of market share or lawsuits resulting from the crisis.
- Operational disruption, such as when an explosion halts operations or there’s a recall of a defective product.
- Public safety, which may include injuries or loss of lives, such as an industrial accident or product malfunction.
- Reputation loss, which occurs when a crisis generates negative information about the company.
It’s common for there to be some overlap with these threats. For example, a product malfunction can cause a public safety issue, which can lead to financial and reputation loss.
Communication Theory and Types of Crises
According to Situational Crisis Communication Theory, which was developed by Timothy Coombs and uses a decision tree to determine the best course of action following a crisis, there are three main types of crises: accidental, preventable and victim. (Later in this section, we’ll cover an additional six types of crises.) The differences between these three types lie in who was responsible for the crisis and how it affected the company’s reputation.
In an accidental crisis, the organization is at fault, but they didn’t intentionally do anything to cause the crisis. This is sometimes the case with product failure. Alternatively, a person may challenge the organization, like by saying that a restaurant routinely serves food that isn’t hot. Accidental crises can seem trivial, but they can cause serious reputational damage if left unchecked.
The company intentionally takes a risk, which leads to a crisis. For example, a company may raise money for a cause, then fail to do what they promised with the funds. This type of crisis can cause a lot of reputational damage. Communication theory plays a big role here. The company’s response and actions are what can make or break its reputation moving forward.
A victim crisis is when the company itself is a victim of the crisis. This can be the result of rumors that blame a company for a crisis, even if the company isn’t actually at fault. The poisoned Tylenol fiasco is an example. Natural disasters can also result in victim crises, but these situations don’t generally pose a threat to the company’s reputation.
6 More Types of Crises
These six types of crises reflect their results more than causes. There will be crossover between these crises and the three communication theory-specific crises. For example, a financial crisis may also be a preventable crisis, and a natural crisis may also be a victim crisis.
During a financial crisis, the company loses value, which can make it impossible for them to repay debt. This is commonly caused by a severe drop in demand for the company’s products or services. To deal with this, funds are often moved around to deal with short-term costs. Then, the company will have to look for new opportunities for generating long-term income.
It’s difficult to prepare for natural crises you can’t fathom occurring, but others you may see coming. For example, if you live in an area that’s prone to blizzards or tornadoes, you can be proactive. Set up weather-resilient workspaces, put together an evacuation plan and create a contingency plan for remote work.
When a company knowingly wrongs its customers, an organizational crisis can occur. Instead of having a consumer-company relationship that’s mutually beneficial, some companies use consumers to benefit the brand. For example, a company may exploit customers, neglect their needs or withhold information. To address an organizational crisis, the company culture must change.
When a person associated with the company is involved in misconduct, a personnel crisis can occur. The misconduct may be unethical or illegal, and it may occur at the workplace or in the individual’s personal life. The company has to thoroughly evaluate the situation, determine the best type of disciplinary response and then be transparent about its actions.
When servers break or a website is hacked, ecommerce and software businesses can lose current and potential business. This impacts the company’s revenue and reputation. A tech specialist should be able to remedy the situation and prevent it from happening again. From there, the company has to prepare for an influx of angry customers and start rebuilding its reputation.
Honorable Mention: The Social Media “Crisis”
Since the topic is so broad, social media doesn’t fit neatly into communication theory. A social media crisis either starts on social media or is amplified by it. A social media fail is not the same as a bona fide crisis, though. When a company missteps on social media, it doesn’t have to become catastrophic. These errors in judgment are often customer service issues, not crises. They don’t require the involvement of the crisis management team. However, social media can escalate a crisis if it’s mishandled during the initial phases.
Communication Theory and Types of Crisis Response Strategies
According to situational crisis communication theory, there are four main types of crisis response communication strategies: bolster, deny, diminish and rebuild. There are also two types of communication strategies outlined in the newer, revised SCCT entry with the Institute for PR: internal crisis communication and stealing thunder. Furthermore, there are three additional types of response strategies that are not specifically defined by SCCT, but that are still helpful to understand.
Overall, crisis response strategies make it easier to categorize and deal with a crisis. The strategy you choose will give you a place to start. You’ll know the first steps to take to begin resolving the problem, instead of having no clue where to begin.
The company positions itself as an asset to stakeholders. It thanks stakeholders for their loyalty and reminds them of the positive outcomes from the past. Use the bolster strategy with any type of crisis, and combine it with another response strategy. It’s particularly useful with victim crises.
When a company isn’t to blame for a crisis, they confront the situation so it doesn’t escalate. When using the deny strategy, the company confronts its accusers, saying that either a crisis doesn’t exist or another party is to blame. This response strategy is best for victim crises when there are harmful and untrue accusations.
If the company played a role in the crisis, the diminish strategy minimizes its responsibility. The company may make reasonable excuses or justify their actions. The diminish strategy is best for victim crises when the company played a minor role. It also applies to accident crises, so long as the company doesn’t have a history of similar crises.
When applying the rebuild communication theory, the company will:
- Take responsibility for the crisis
- Offer appropriate compensation to those affected
By redeeming its reputation, the company can hopefully rebuild its relationship with stakeholders. This is best for accident and preventable crises, especially if the company’s reputation or relationships are severely damaged.
Internal Crisis Communication and Stealing Thunder
These two communication strategies weren’t included in the original communication theory entry. However, they’re now deemed important for modern crisis management processes.
Internal Crisis Communication
This one has to do with how employees learn about the crisis and response actions. There are two main goals with this strategy:
- Mitigate how much stress employees are under.
- Show employees how they can become brand ambassadors during this time.
During a crisis, employees want to know what the company is doing in response, both generally and in the specific ways that affect them.
Borrowed from legal strategies, stealing thunder means that a company points out one of its flaws before another party or the media is able to. This reduces the reputation damage to the company. Some managers feel it’s unnecessary to disclose negative information that may never get out. However, it’s the smartest option when a company is fully aware of problems that could become critical.
3 More Crisis Response Communication Strategies
All of the crisis response communication strategies mentioned in this section are part of a larger crisis plan. Consider using any of the following with the communication theory-specific strategies defined above.
Proactive Communication Theory
During proactive crisis management, the company anticipates a potential crisis, prevents it and prepares for it. An example of this is prepping for a natural disaster that’s likely to occur in your geographic area. The company also has to actively monitor threats so that they know when a crisis is on the horizon.
Recovery Communication Theory
When a crisis takes a business by surprise – as many of them do – the recovery strategy aims to salvage whatever possible. For example, the company may apologize publicly and then launch an investigation into what caused the crisis.
Responsive Communication Theory
The responsive communication theory relies heavily on a crisis management plan (CMP), which we’ll get more into in a bit. Basically, though, a CMP outlines the response steps to take.
Building a Crisis Management Team
Choose a team of people that understands communication theory and knows it’s their responsibility to respond to a crisis. The team should include members from the following departments or areas of expertise:
- Human resources
- Public relations
- Social media
There will also be at least one spokesperson for the company during a crisis, and they won’t necessarily be part of the PR team (though PR will coach them). If the crisis is ongoing, appoint several spokespeople to share the workload. The crisis management team will:
- Understand different types of business crises
- Anticipate potential problems
- Prevent them when possible
- Make key decisions to improve or resolve the situation.
Also, since they’re the people who will be following the crisis management strategy, they should be heavily involved in creating it.
The Crisis Management Process
Traditionally, a crisis management process has three main phases:
- Crisis response
The purpose of following the crisis management process is to prevent a crisis or reduce the damage a crisis causes. When you understand communication theory, it’s easier to build your process.
During the pre-crisis phase, the company will prepare for and, if possible, prevent a crisis. Here are the actions that this phase should include:
- Select the crisis management team
- Write a crisis management plan (CMP)
- Pre-draft crisis messaging
- Test the CMP
We’ve already gone over the crisis management team in the section above, but let’s briefly discuss the plan and pre-drafted messaging. Also, note that you should review and update your CMP annually.
The Crisis Management Plan
The CMP is a reference source and a template. It’s not a blueprint or specific, foolproof step-by-step instructions. The CMP is adaptable to the specific crisis and its effects. It should include:
- Important contact information
- Forms that will document the company’s crisis response
- Reminders of typical crisis response steps
CMPs save time by providing needed information, gathering crisis-related information and pre-assigning tasks.
Pre-Drafted Crisis Messages
Templates can be quickly updated to include crisis-specific information when needed. There are several templates to prepare ahead of time, including:
- Press releases
- Public statements from management
- Social media posts, broken down by platform
- Website pages
Draft templates and have them approved before a crisis even occurs. Updating and releasing messages can then happen quickly, without going through time-consuming steps mid-crisis.
Crisis Response Phase
This is the phase when the company has to respond to the crisis using the tools they prepared during the pre-crisis phase. This phase has two distinct parts:
- Initial critical response
- Reputation repair
The initial critical response must occur quickly and be both accurate and consistent. If the information is inaccurate, how quickly the company responded to the crisis won’t matter. Since we’ve already talked a lot about reputation repair, let’s move on to the last phase.
During the post-crisis phase, the company will fulfill any promises they made during the crisis response phase. For example, a spokesperson may tell the public they’ll hear more information about the state of the company post-crisis. You must deliver that information.
During the post-crisis phase, the company will also take what they’ve learned from this crisis to prepare for the next one and update the CMP. Reputation repair may begin or continue during this phase, too.
The hope is that the company can return to normal during this phase. Even if the crisis continues to require some attention – like following through on commitments made mid-crisis – management can put most of their energy toward normal business functions.
Final Thoughts About Crisis Management and Communication Theory
When you can’t avert a crisis, you can at least handle it swiftly and professionally. Crisis management and communication theory can have a long-term impact on the brand. Handled well, the brand has a good chance of recovering. Handled poorly, though, and the effects of the crisis can snowball until they’re out of the company’s control.
Creating a crisis game plan takes a lot of work, and it’s all for something that may or may not happen. It’s absolutely worth it, though, and if (or when) a crisis does arise, you’ll see the value of having a strategy. It’s common for businesses to rebound stronger than they were before. And while you don’t want to rely on a crisis to strengthen your brand, if one has to occur, there’s at least a way to thrive because of it.
Facing a crisis makes you realize you have much less control than you imagined. Believe it or not, this is a good thing. Check out my article about Leaning Into the Illusion of control to Smash Business Goals.
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