Avoiding the Storm: Strategic Crisis Planning



Everyone’s favourite billionaire and value investor Warren Buffett is quoted as saying, “It takes 20 years to build a reputation and five minutes to ruin it.” Recent examples of Australian companies caught up in their own five minutes of media fame that developed into a reputational crisis include prominent brands Woolworths, Optus and Qantas. The case studies underscore the importance of a well-crafted crisis communications strategy  – drafted, rehearsed and regularly updated – long before the need arises.

Buffett’s wisdom applies pretty much universally to all brands, whether consumer facing or B2B. Financial services brands face the additional risk of heightened scrutiny borne from the obligations of managing other people’s money. For Madden, some of our best work in helping financial services companies to avoid a looming PR and reputational crisis never sees the light of day. In other words, a measure of our success is effectively neutralising reputational damage well before an emerging company scenario blows out to a public crisis.

Should a crisis erupt without warning (for example, the fund administrator client that was a target of cyber criminals) the gold standard response is based on pre-planning, preparedness and the calm actions of working a rehearsed, clear and professional strategy. In the heat of the crisis, the last thing we all need is impulsive chaos, emotional decision making and each stakeholder bringing their unique, often conflicting, points of view about the best way to manage an unfolding drama.

During the 2018 Hayne Royal Commission, Madden’s work preparing witnesses for the blowtorch of the Commission became at times a behind-the-scenes tug of war with the appointed legal firm and a certain barrister acting for the client who knew better. Our advice, contrary to the counsel of the senior lawyer, was to directly and cogently respond to questioning. “Context” or relying on black letter law arguments were to be avoided. The communicators (we) won that battle and the client’s witness performance was exemplary and positive.

In another example, our advice to a prominent witness called to give evidence was ignored. This person decided to ‘wing it’ as he had some media experience and felt the systematic approach we offered would constrain his ability to sway the outcome in his favour. Bad idea! The subsequent fall from grace and public humiliation he suffered was difficult to watch as the media doubled down on evidence successfully brought to light before the Commission amid the glare of the public spotlight.

Once the storm front has passed? Emerging from a crisis or near crisis brings many opportunities for learning and opportunities for growth. In my experience it is also a time of deep reflection: why is it that the lawyers often advise a client with reams of defamation case law and who seem to want to guide a besieged ship closer to the conflict rocks, not sail into calmer waters?

A crisis rarely starts out as a crisis

The seeds of a crisis (issues) are often sown long before those issues escalate to the point of a roaring crisis played out in the public eye. Recognising early signs, and seizing mitigation opportunities to neutralise issues can prevent a minor scenario becoming a full-blown, reputation-threatening storm.

A thorough crisis communications plan requires a comprehensive playbook that is way more than a reactionary list of hypothetical scenarios; it’s a step-by-step guide (decision tree) through the practicalities of stakeholder management. Centralised media triage and management is a critical aspect, but not everything. Remember that an organisation’s own people can be their greatest reputation strength during routine times but also in periods of challenge. Internal communication is as vital as managing the external environment.

Organisations with a well-planned framework are better equipped to foresee potential challenges, facilitate proactive responses, and avoid impulsive decisions made under pressure.

Regular risk assessment meetings help identify and rank potential crises based on factors like likelihood, gravity, growth potential, and duration. This regular practice builds agility, empowering firms to anticipate and effectively respond to challenges as they arise.

An issue ignored is a crisis invited.

Henry Kissinger, Former United States Secretary of State.

You found yourself in a potential crisis – now what?

Crises are generally not isolated events (they can be) but more typically are a culmination of a range of factors. A proactive approach involves confidential and honest collaboration with stakeholders in risk analysis to identify any potential threats on the horizon.

Aside from calling a professional communications firm, the following three basics are a consistent starting point for any organisation facing a potential crisis:

  • Less is More. Complexity is not your friend during a crisis. Keep communication concise, consistent, and clear to all audience groups. Simple, direct, and straightforward messages reduce further risk of misinterpretation or confusion.
    • The 5Ws. Detailing the Who, What, When, Where, and Why is the basis of your response narrative. It also ensures that stakeholders gain a clear and complete picture, fostering understanding and trust.
    • Speed and Consistency. Time is critical during a crisis. Prioritising speed based on pre-prepared messaging in response to media and stakeholders is crucial, coupled with maintaining consistency (the same hymn sheet) in Company messaging.

    Effective crisis management is not just about what you say but how you say it, and what actions you show. We have all become accustomed to the public ‘mea culpa’ from business leaders seeking a cynical easy path out of the damage. A sorry without follow up action or consequential accountability is a hollow response. Be transparent and keep your cool – organisations should never become the story, and actions should never exacerbate the crisis.

    Get armoured

    The enduring truth, echoing the wisdom of Warren (Buffet), is that reputations are hard-won and easily lost. For Madden, this means prioritising the strategic planning process in the clear and uncluttered light of the business as usual. Secondly, it’s not just about resolving a crisis when it occurs, it’s very much about preventing an issue conflating to a crisis in the first place.

    Professional crisis and issues management can reshape business operations and decision-making, fortifying frameworks for any future challenge.

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