The year 2010 may go down in history as the year of the corporate crisis. The crises that impacted large, iconic and generally well-respected institutions, from Toyota to Goldman Sachs to BP, were staggering in their scope. Individually and collectively, they affected hundreds of thousands of Americans and received international attention.

They also shared a common pattern that went something like this: Mistake made. Bad press. Public outrage. Congressional hearings. Customer defections. Market-share erosion. More bad press. Financial pressure. Lawsuits. More bad press. Repeat.
As any CEO who has managed a company through crisis will tell you, companies are rarely as brilliant or as evil as they’re portrayed. Sadly, that doesn’t help a company’s stock price when crisis strikes.

We’ve counseled dozens of companies in crisis, and we know that it’s too easy for PR professionals to play armchair quarterback and assert that they would have done better had they been in the hot seat. For example, in BP’s case, once oil started spilling into the Gulf of Mexico, the term “damage control” became an oxymoron.

Could the situation have been handled better out of the gate? Certainly, but no amount of disclosure, apologies or assurances would have made BP into the “crisis hero” that Johnson & Johnson became in 1982 during the Tylenol recall. For BP, an expeditious fix didn’t exist.

Nevertheless, there are key communications lessons that executives should keep in mind to manage a crisis when it hits:

Lesson No. 1: Build the Right Culture.

As Winston Churchill said, “There is no greater feeling than to have been shot at with no result.” And even though the best preparation doesn’t guarantee that you’ll be able to avert every crisis, it’s interesting to compare the cultures at companies that have experienced very public crises. Whether it’s lack of individual accountability or a pattern of cutting corners, there is a detrimental chink in the corporate-culture armor that some CEOs either weren’t aware of or chose to ignore. The bigger the company, the harder it is to ensure that every employee is “doing the right thing.”

In this regard, companies can steal a page from military and political campaign books by establishing forward observers and listening posts to get intelligence and feedback from every corner of the organization. An early-warning system might make the difference between a tough week and a bad five years.

Lesson No. 2: What Can Be Known Will Be Known.

The sweep-it-under-the-carpet approach rarely works. Ignoring major errors or downplaying their significance in the hopes that no one will notice didn’t work very well in the 1980s and 1990s. In today’s 24/7, Twitter-driven world, if your company makes a mistake or tries to minimize its impact, it’s only a matter of time before word gets out.

Good PR will never change bad facts, but exercising leadership and assessing the situation rapidly and realistically demonstrates respect for those who are affected and for the public, your constituents, shareholders and customers. It will go a long way toward establishing credibility early in the life cycle of a crisis and protecting your reputation over the long term.

Lesson No. 3: Communicate Inside Out.

During a crisis, there’s tremendous pressure on executives to communicate with shareholders, customers and the media. This can overshadow the need to communicate with employees, contractors, vendors and others with whom a company is aligned. However, employees are answering questions from your customers, which makes it even more important in a crisis to communicate internally with accuracy and frequency.

Whether you have five employees or 500,000, each one is a company spokesperson, especially in a crisis. They need context and talking points. In the absence of guidance about what to say to customers, employees will make up a script. In our experience, few companies have gathered all the facts when a crisis strikes. That’s what makes it a crisis. It’s one part mistake and three parts lack of clarity.

Companies tend to do better in crisis if they move quickly to reassure their employees and customers that they will do the right thing for customers and those affected by the crisis (and stick to that promise); communicate what they know for sure (which may be very little); and explain the process they are undertaking to gather the necessary information and rectify the situation.

More than ever before, today’s successful crisis-communications plan must go beyond media relations. Board members, regulators, employees, customers, contractors and industry influencers are all important external constituents who need to be included.

Lesson No. 4: The Message Matters. So Does The Messenger.

Companies in a crisis should develop three or four key messages that summarize the who, what, where, when and how of the situation. Given the many moving parts of a crisis, it’s imperative that legal counsel be included in both message development and delivery. In nearly every crisis situation, executives need to carefully consider what information should and shouldn’t be disclosed. The old PR adage, “disclose everything quickly,” can be as much a recipe for disaster as attempting to “no comment” your way through a crisis.
Creating the right key messages and delivering them in a consistent, timely manner to all affected audiences is the best chance you have to minimize damage to the company’s bottom line and reputation.

Also, remember that in some situations, the CEO is not the best spokesperson. In a major crisis of national significance, it’s critical that the company’s top executives are visible, empathetic and on-site, but determining the right process for communicating and selecting the right spokesperson to manage daily communications with the media are critical decisions to be made early on.

Lesson No. 5: It’s Not About You. Court The Court Of Public Opinion.

When the facts are stacked against you, the court of public opinion can help. Be visible, hands-on and show what you are doing to resolve the situation. Demonstrate compassion and sensitivity for those most affected by the crisis and communicate the depth of your understanding for the level of harm. Make it clear, beyond a shadow of a doubt, that you are not out of touch.
Alternatively, if your company has been wrongly accused and is inclined to fight, be prepared to be relentless and aggressive in making your case. Silence doesn’t move underdogs forward.

Lesson No. 6: Crisis Will Come.

Trouble is inevitable. It happens. Have a crisis-management plan in place for difficult situations, from employee departures and scandal to board disputes, product recalls, regulatory issues, tragedies and investigations. When trouble rears its ugly head, having a crisis team and plan in place will help you control the dialogue.

Even a well-managed company can find itself in a situation that can hurt its reputa­tion and its bottom line. When that happens, remem­ber these lessons. Work with your internal and external communications teams to manage the situation in a way that will efficiently address the issue, reach all your key constituents and position your company to get back on track.

In the meantime, remind your colleagues of this wise quote from Warren Buffett: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

Jane Ingalls of Artemis Communications and Casey Nikoloric of TEN 10 Group, both Denver-based, specialize in crisis management and strategic communications. They may be contacted at 303-674-1426 or at artemiscollaborative.com.

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