Crisis Management vs. Crisis Communications

The difference between crisis management and crisis communications and the new term of business continuity needs to be clarified. Where do you draw the line between management and communications in a crisis? If you and your management are smart, you won't. As a matter of fact, you'll do everything you can to coordinate the management, operational and communications response to any crisis that goes "public."

To start with, Trigger Points must be clearly defined and well understood by all of the members of the response team. All too often someone says, "We have a crisis out here." What are the factors that make it a crisis as opposed to a serious internal problem?

Criteria, such as the ICM Levels of Crisis, which describe the severity of the problem should be used to determine what type of response will be provided. There also is a question of timing--how soon the crisis should be declared and who will make that determination.

Those criteria are an integral part of business continuity planning and should be built into both the operational and communications contingency plans for any business disruption. They will trigger separate responses by:

• The operational members of the response team who have to get the disruption under control as quickly as possible so normal business can be resumed
  
  
• Top management in allocating resources and making critical decisions needed to
  resolve the situation
  
  
• Communications staff people in making sure those stakeholders who need to know are briefed initially and then kept informed until the crisis is played out.

The key is in having an integrated, coordinated approach by all three groups. The process starts with defining the organizations vulnerabilities to business disruptions and developing realistic workarounds and contingency plans. That's the basis of the business continuity approach that has emerged as companies, non-profit organizations and government agencies worldwide prepare for any type of business disruption including a pandemic.

The contingency plans are in two parallel areas--operational and communications response. While the operational response team is focusing on resolving the problem as quickly as possible, the communications team is responsible for informing the organizations key stakeholder groups to ensure their understanding and support can be maintained.

The process itself is remarkably simple if it is implemented correctly. The crisis response to a toxic gas release at a Union Carbide chemical plant in Bhopal, India that killed more than 2,000 people was managed very effectively by "the Bhopal team." There were only 10 Union Carbide managers and executives on that team but it was headed by the CEO and they all worked full time for months in coordinating the operational, management and communications response to the worst industrial accident in history.

In contrast, one of the worst environmental accidents in history, the Exxon Valdez oil spill, is generally regarded as one of the worst managed in history because of the lack of coordination between management, operations and communications. The extraordinary work done by the Exxon oil spill response crews in terrible weather conditions is generally not known because of the company's inept and insensitive communications with the community and government officials. It took CEO Lawrence Rawl two weeks to visit the scene and make any kind of substantive statement regarding the tragedy.

If anybody questions the importance of focusing on the financial consequences in crisis communications, consider what the lack of crisis communications cost Exxon in addition to the damage to its reputation as a leading oil company. The costs of the cleanup were approximately $1 billion, but Exxon was forced by the courts in Alaska to pay an additional $3 billion in compensatory and punitive damages. One can only speculate on how much less the punitive damages would have been if Exxon had expressed any empathy in the first days after the accident to the fishermen, local citizens and millions of TV viewers who were appalled and outraged by the damage done to Prince William Sound.

Another oil company, Texaco, had a major crisis of its own when a disgruntled employee secretly tape-recorded an inflammatory discussion about racial discrimination among several Texaco managers. When the employee gave the tape to the plaintiff's attorneys in a lawsuit alleging racial bias in Texacos personnel practices, they distributed it to the New York Times . The crisis went from Smoldering Level 1 to Sudden Level 4 in a few hours.

To its credit, Texaco responded quickly and decisively, with CEO, Peter Bijur, serving as crisis manager and principal spokesperson in the ensuing media onslaught. Texaco took action to discipline the employees involved, resolve the lawsuits and defuse a boycott called by Reverend Jesse Jackson.

The dispute was resolved for $175 million, and probably cost the company at least that much more in internal costs related to the crisis. However, it could have been far worse for Texaco's reputation and much more damaging financially if it had not been resolved so quickly. In this instance there was no business continuity plan and no time to develop one. This was crisis management and crisis communications at its best-- and it paid off.