Imagine your company’s name plastered across headlines, but not for the right reasons. Maybe there’s been a product recall, a data breach, or allegations of misconduct. Whatever the crisis, you’re now facing a barrage of questions from concerned employees, customers, investors, and the media. This is where effective crisis communication becomes just as important as mitigating the actual crisis at hand. In short, communicating with stakeholders during a crisis can often be the defining factor between a setback and a disaster.
Communicating with stakeholders during a crisis effectively requires careful planning, transparency, and a genuine commitment to addressing your audience’s concerns. It’s about owning your mistakes when necessary, providing timely and accurate information, and outlining the steps being taken to remedy the situation. Mishandling this crucial communication can have significant and lasting consequences.
The Stakes: Why Effective Crisis Communication Matters
A mismanaged crisis can deal a devastating blow to an organization’s reputation, leading to a loss of trust among its stakeholders. This loss of trust can result in financial losses, decreased brand loyalty, and legal repercussions. Remember the Volkswagen emissions scandal in 2015?
Aside from a severely damaged reputation, the company spent more than $20 billion on fines, repairs, and compensations — with lawsuits filed both in the US and Europe. This illustrates that the ramifications of mishandled crisis communication extend far beyond negative news cycles. The importance of stakeholder engagement and a strong communication team cannot be overstated.
In July 2021, California’s Department of Fair Employment filed a lawsuit against Activision Blizzard, a prominent video game development company. This situation underscored how poorly handled internal crises can quickly escalate into major legal and reputational issues.
A Changing Crisis Landscape
The business landscape changes constantly, and so do the nature of crises themselves. The way organizations communicate during these turbulent periods is critical. According to the US Crisis Management Institute’s (ICM) 2021 annual report of global news coverage of business crises in 2020, we’re seeing a shift toward more “sudden cause” crises.
For the first time, a bigger proportion of crises have sudden causes (51%) versus smoldering causes (49%). This signifies that businesses have less time to react and need to be prepared to address situations that seemingly erupt overnight. Having a comprehensive crisis communication plan in place is more critical than ever.
Defining “Crisis”: Understanding What You’re Up Against
Before we dive into communication strategies, let’s define what constitutes a “crisis” in a business context. Timothy Coombs, the author of the Situational Crisis Communication Theory, defines crisis as “the perception of an unpredictable event that threatens important stakeholder expectations, significantly impacts the organization’s performance, and/or creates negative outcomes.”
This definition underscores that a crisis is not merely a negative event. It’s an event that carries significant implications for an organization’s stakeholders and its overall ability to function. A crisis communication plan helps maintain stability and manage the situation effectively.
Effective Communication Strategies: A Breakdown
In the book Crisis Communication Strategies, author Amanda Coleman outlines effective communication practices that organizations should implement during a crisis. She highlights these important steps:
| Crisis Communication Stages | Action Items |
|---|---|
| Before a Crisis: Preparation is Key | – Identify potential risks and vulnerabilities – Designate a crisis response team – Create a detailed communication plan that outlines key messages and communication channels. |
| During a Crisis: Timely & Transparent Action | – Acknowledge the crisis promptly and publicly. – Provide accurate information through verified channels. – Control the narrative before misinformation can take hold. – Show empathy and address the concerns of those affected. – Avoid speculation and stick to the facts. |
| After a Crisis: Rebuilding & Learning | – Communicate the resolution and the steps being taken to prevent future occurrences. – Conduct a thorough review to learn from the crisis and improve your response plan for the future. |
Author David Sturges, in the article Communicating through Crisis, makes a significant point: more important than how we communicate is what we communicate throughout the lifecycle of a crisis. It’s essential to have clear roles and responsibilities for all team members involved in the crisis communication process. Open communication is vital to ensure everyone is informed and working together effectively.
Consistency is King: The Value of Ongoing Communication
Post-crisis communication represents an extension of your earlier communications, enriched by the lessons learned from the crisis. You’ve addressed immediate concerns, but now you must demonstrate what you’ve learned and how you’ll do better. Provide accurate updates to your key stakeholders and address any misinformation promptly.
It’s tempting to go silent once the immediate threat of a crisis subsides. But silence creates a vacuum that breeds suspicion and distrust. Transparency and proactive communication during this stage are essential to rebuild trust with stakeholders and show them you’re serious about making things right.
Every Voice Counts: The Rise of Employee Advocacy
In our hyper-connected world, every employee is, whether consciously or not, a spokesperson for your organization. This makes internal communication even more vital during a crisis. Organizations must ensure cohesive messaging across all platforms.
Ensure your employees have access to timely and accurate information, feel heard, and are equipped to become positive brand ambassadors during a crisis. Internal stakeholders are just as important as external stakeholders. By providing them with the information and support they need, you can empower them to become advocates for your organization.
A Case in Point: BP’s Deepwater Horizon Oil Spill
No conversation about communicating with stakeholders during a crisis would be complete without examining some real-world scenarios. One such case study that perfectly illustrates this point is the 2010 BP Deepwater Horizon oil spill in the Gulf of Mexico.
The disaster resulted in the largest marine oil spill in history and sparked outrage toward BP due to its mishandling of the crisis response and communication strategies. The company’s communication efforts were widely criticized.
The company’s public statements were widely perceived as tone-deaf, out of touch, and insensitive. It downplayed the environmental impact of the disaster, attempted to shift blame, and was slow to provide support to the communities and businesses most affected by the disaster. The incident is considered the worst environmental disaster in US history and one of the worst examples of crisis communication ever. Early identification of potential crises is essential for effective crisis management.
The case of the BP Deepwater Horizon oil spill serves as a stark reminder that even large, well-established organizations with significant resources can fail catastrophically in effectively communicating with stakeholders during a crisis. It also shows the severe damage this can have on a brand’s reputation, stakeholder trust, and even its long-term survival.
Navigating Controversy in the Netflix Culture
A more recent example of mishandled crisis communication that caused considerable damage to a company’s reputation involved streaming giant Netflix. In 2021, a comedy special released on their platform sparked a heated public debate, prompting outrage and accusations that the streaming giant was tone-deaf to concerns about offensive content.
Netflix’s response to the crisis (including publicized internal memos) drew much public criticism. It even led to a campaign to cancel Netflix subscriptions, as some viewers perceived the company as prioritizing profits over addressing legitimate concerns from its own employees and subscribers. Public relations play a crucial role in effective crisis communication.
Conclusion
Communicating with stakeholders during a crisis is not an easy task. It’s a multifaceted process requiring sensitivity, empathy, clear messaging, and a deep understanding of the audiences involved. Failure to communicate transparently and effectively during a crisis can be as, or even more, damaging than the crisis itself.
As crises evolve and increase in today’s world, clear and compassionate communication becomes not just a responsibility, but a necessity. A well-defined crisis communication plan includes establishing clear communication channels, crafting consistent messaging, and providing accurate information to stakeholders. It’s essential to remember that effective crisis communication is not merely about managing the message; it’s about managing the impact of the crisis on people’s lives.
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