Jun 17, 2002

Keeping It On Track

Tough Times Call for a Sound Crisis Management Plan to Avoid DerailmentManagement Plan to Avoid Derailment

Whether a company discovers it has sold consumers a
defective product, is navigating rough financial waters or needs to clean up
its image after a manufacturing plant mishap, how the crisis at hand gets
managed has the potential to derail the business or keep it on track. Having an
effective crisis management plan in place can be the key to survival in tough
times?no company should be without one. A crisis management plan is a
road map for handling the media in volatile situations and for making mere
bumps in the road out of potential public relations sinkholes. It outlines
actionable solutions for making the best of bad situations. However, many
companies have never thought about a crisis management plan, much less created one.

For example, when the Rainforest Action Network spearheaded
an aggressive campaign against The Home Depot protesting the sale of old-growth
forest products, America's home improvement mega-chain had a public
relations crisis on their hands. A blitz of negative media attention including
broadcast coverage of public protests at stores nationwide kept The Home Depot
on the defensive for two years. When the company finally announced that it
would phase out sales of endangered, old-growth wood by 2002, environmentalists
praised the decision. However, the mega-chain's image already was
tarnished because they failed to act in a more timely, media-savvy manner.
Better crisis management planning would have helped The Home Depot avert much
of the negative publicity, curbing the need for extensive, costly damage

What has become all too apparent in the wake of the Sept. 11
terrorist attacks is that a crisis management plan is integral to survival,
regardless of company size or type. A plan should concisely outline corporate
procedures for taking control of a wide range of potential
crises?preferably before the local news team plants itself in the company
parking lot. Crises to plan for can vary by industry. For example, in the water
treatment industry, a crisis management plan would include procedures for
addressing water contamination issues. A complete plan also would cover more
general problems such as the sale of faulty products, bad installations,
unethical salespeople and confusing contracts. Developing and implementing a
crisis management plan requires significant time and resources, so outsourcing
this critical function to a reputable public relations agency may be an option.

A solid plan assigns key individuals to a crisis management
team with decision-making authority, and it presents specific guidelines for
communicating with media, employees, investors and other stakeholders. For
instance, ensuring that journalists don't find out about company layoffs
before employees do is paramount. A plan also should explain how to interact
with law enforcement and assist family members when employees are personally
impacted by a crisis.

When confronting any crisis, employee safety, information
security and media management are top priorities. While safety and security
procedures will vary, there are a few tried-and-true rules for handling media
during a crisis. First, a company should issue a timely press announcement that
addresses the crisis in a factual, forthcoming manner. Denial of responsibility
or letting the problem fester are certain to bury a company deeper.

Taking steps to reestablish credibility with the media and
public is next, which may include recalling a hazardous product, issuing a
public apology or implementing special programs to mend customer relationships
is pertinent. For example, when Kohler Co. began receiving reports of falling
shower doors due to faulty hinges including a report from one consumer who
sustained minor injuries, the company took swift, decisive action. Before
another consumer could be injured, Kohler voluntarily recalled 41,000 shower
doors and provided free replacements. Kohler's well-timed action kept
their reputation intact and their customers satisfied?something that is
virtually impossible to do without preplanning.

Don't forget to wisely select a company spokesperson.
The best candidate is someone who will display patience with the media, keep a
cool head under pressure and send consistent messages in every press
interaction. While it takes time and diligence to repair the damage, if the
right crisis management plan is in place from the start, the discomfort will be

About the author

Walt Denny, Inc. is an advertising/ public relations agency that focuses primarily on home products clients, such Amerock Corp., L.E. Johnson Products and Whirlpool Corp. Positioned as the 'Home Products Agency,' Walt Denny, Inc. was established in 1989. For more information, visit www.waltdenny.com.