Download Public Relations in Crisis Management

Public Relations in Crisis Management
ATM Semester 2
Lecture 6
By Sanemkhan Nurillaeva
Agenda
• Public Relations
• What is Public Relations?
• Public/Stakeholders for PR activities
• Ryanair case
• Developing PR Key Messages
• Crisis Management
• Definitions and Examples
• BP Crisis Case
• 7Rs of Crisis Management
Definition of Public Relations
“Public Relations is about reputation - the result of what you do, what you say
and what others say about you.
Public Relations is the discipline which looks after reputation, with the aim of
earning understanding and support and influencing opinion and behaviour. It
is the planned and sustained effort to establish and maintain goodwill and
mutual understanding between an organisation and its publics.”
The Chartered Institute of Public Relations (2010)
Ads vs. PR
Publics -Stakeholders
• “Publics” of an organization is
preferable to “stakeholders,”
especially in case of publicly-traded
companies.
• Example: Ryanair stakeholders of
PR activities to improve company
reputation
Power/Interest Matrix
• Power/Interest Matrix for Stakeholder
Prioritization
• Step 1 – Identify Your Stakeholders
• Step 2 – Prioritize Your Stakeholders
• Power – the influence level of a
stakeholder group over the certain
issue
• Interest – the level of perceived
interest of a stakeholder group to the
given issue
Ryanair Traditional Stakeholder Matrix
Ryanair New Stakeholder Matrix
Key Messages
Stakeholders
Key Messages
Desired Response
Shareholders
Ryanair is changing tone of
voice and increasing profits
Increase of shareholders confidence in their
investment choice in Ryanair
Customers and
General Public
Ryanair is not only affordable, Positive WOM, Customer Acquisition and
but also caring airlines
Retention
Employees
Appreciation of employees’
work; Employees need to be
trained that customer care is
central in Ryanair business.
Media
Ryanair is changing its tone of Increase in positive media coverage that will
voice and increasing
result in improvement of company reputation.
concentration on customer
care
Etc…
Employees feel that their work is appreciated
and they treat customers with extra care and
respect.
Crisis Management
Definitions
• Crisis – A state of affairs in a business where in the leadership (owner, CEO, or Board of
Directors) must take urgent and unprecedented action to try to save the business from
failure—with the distinct possibility of a highly undesirable outcome. The companion
term that comes to mind is "emergency intervention.“
• Crisis Management – The coordination of efforts to control a crisis event consistent
with strategic goals of an organization.
• Crisis Communication – All means of communication, both internal and external to an
organization, designed and delivered to support the Crisis Management function.
Examples of Crisis
1. Enron-"Off balance sheet" actions to hide poor results
2. Catholic Church - Accusation of sexual abuse by priests and
failure to correct over many years
3. Malaysia Airlines- Missed Plane
4. Tesco accounting scandal
BP Case
• Oil spills occur with some regularity worldwide.
• They are usually contained quickly, causing little long-term damage. Oil spills
seldom reach the crisis level.
• In BP’s case, however, the amount of oil spilled created a heightened threat
level. Ultimately, the crisis became the largest environmental disaster in U.S.
history.
BP Oil Disaster
Disaster Consiquences
• The Gulf oil spill is recognized as the worst oil spill in U.S. history.
• Within days of the April 20, 2010 explosion and sinking of the Deepwater
Horizon oil rig in the Gulf of Mexico
• 11 people killed,
• Underwater cameras revealed the BP pipe was leaking oil and gas on the
ocean floor about 42 miles off the coast of Louisiana.
• By the time the well was capped on July 15, 2010 (87 days later), an estimated
3.19 million barrels of oil had leaked into the Gulf.
BP Criticized
• BP was criticized initially for not communicating
and responding more quickly to the crisis.
• In addition the company was criticized for not
having clear risk and crisis communication
provisions in place for a disaster of this
magnitude. As a result, after the explosion, the
crisis appeared to be beyond BP’s control as oil
rapidly gushed into the water.
• Tony Hayward, the CEO of BP at the time of the
crisis, was regularly criticized for minimizing the
scope and intensity of the crisis and for lacking
compassion and empathy in his initial post crisis
responses.
Misbehavior of CEO
• In his later interview Tony Hayward, the
CEO of BP said:
I’d like My
Life Back!
• No mention of 11 workers who lost
their lives in BP catastrophe
• What’s more, he was later spotted in
England, participating in yacht race,
while their oil still flowed
Awkward Quotes of BP CEO
Drawings of BP CEO
3 Main Mistakes in Crisis
Managers of deeply troubled companies repeated three fatal
mistakes.
1. They failed to recognize that the seeds of crises are
sowed long before they reach headline proportion.
2. They did not calculate the real cost of their troubles as
part of crisis decision-making.
3. Finally, they opted for self-defense rather than brand
defense.
Caywood and Englehart (2003)
7Rs of Crisis Management
CEO and managers ought to say and do
something in crisis
7Rs: 1.Respond
Rs
Communication Message
Behavior Action
1.
Some communication, even limited, is
necessary:
"Today, we were told that the company
would be…"
Most responses to most types of crisis
can be anticipated
and pre-checked within the company
hierarchy for
permission to release in advance of the
emergency.
Not responding is a response that communicates
as a
failure to act. "No comment" or "The company was
unavailable for comment" are unacceptable
messages
that communicate indifference. e.g. Martha Stewart
initially failed to respond
Respond
7Rs: 2.Regret
Rs
Communication Message
2. Regret Some form of human concern must be
communicated
with or without accepting responsibility if
the facts are
not fully known:We regret the harm
caused to our
customers and their families by our
product…."
Behavior Action
At a higher level of it may be necessary to express
"outrage" as a stronger act. "If the facts are as they
seem, we will not tolerate any error that could
cause injury to…"
e.g. R. Kelly attacked those who accused him
7Rs: 3.Resolution
Rs
Communication Message
Behavior Action
3.
Some promise to insure that the
specific or general event is being
investigated and some action is
being taken to solve a problem. "We
are shutting down the plant…"
Identify experts inside and outside the company
who are cooperating to resolve the problem.
Announce when more detailed information might be
known, e.g.
Andersen sought outside third parties to lend
credibility to their firm.
Resolution
7Rs: 4. Restitution
Rs
Communication Message
4. Restitution As the crisis unfolds and facts are
known; the message
must be conveyed that the
organization is able and
willing to "make good" to those
harmed even if the
promise is simply one that meets the
normal warrantee
and guarantees of the products or
services."
Behavior Action
Any early and rapid support for victims (flying of
family members to an airline crash site) must be
planned and initiated. Conditions of the restitution
may not necessary commit the company, but again
speak with actions the best behavior possible, e.g.
the Catholic Church settled with some victims.
7Rs: 5. Reform
Rs
Communication Message
Behavior Action
5. Reform
As the facts are gathered and
known, some honest
promise of action that will prevent
any reoccurrence
must be stated. "We have found that
currently accepted industry and
regulatory standards are not
sufficient to protect our employees;
we are improving
our program…."
Take actions that demonstrate commitment to the
long-term relationships you wish with stakeholders.
Meet and exceed expectations by creating for the
firm standards not yet required by law. e.g. the
Catholic Church initiated new global plans for
protection of children.
7Rs: 6. Responsibility
Rs
Communication Message
Behavior Action
6. Responsibility
At sometime in the midst or after
a crisis someone (a
person) and the company must
accept responsibility
for either the specific event or for
a management
process that failed to prevent the
crisis. "As CEO of
this firm I accept that it was my
responsibility to
ensure that the investors of this
company were
protected…" In older terms "the
buck stops here"
must be stated.
Beyond reform and restitution the organization
must establish and follow the highest standards
of transparency. Accountability and responsibility
must be understood as the daily actions of any
organization that can and may have caused
harm in its role as a company existing with the
permission of society, e.g.
The Catholic Church did accept responsibility
compared to other crises.
7Rs: 7. Reputation
Rs
Communication Message
Behavior Action
6. Reputation/
To reestablish the reputation of
the organization and
its employee; the management
must reaffirm it’s
intention to be considered a
premier company
among leaders in the industry.
"Our reputation,
will depend on our ability to
promise and deliver
the safest…"
A thorough audit of the activities of all
stakeholders relevant to the strengthening of the
reputation and corporate brand must be
undertaken to identify other
weaknesses or stress points in the organization.
Again, the Catholic Church and the NYSE are
rebuilding their
reputations.
Brand Rebuilding
Reading
• Caywood and Englehart (2003), “CRISIS MANAGEMENT: THE MODEL
UNCHANGED BUT THE COSTS ARE SKYROCKETING”, JOURNAL OF
INTEGRATED COMMUNICATIONS, Available from:
http://www.beaconadvisors.us/news/articles/JICArticle.pdf
• Robert R. Ulmer, Timothy L. Sellnow, Matthew W. Seeger (2010), ”Effective
Crisis Communication: Moving From Crisis to Opportunity”, SAGE Publications,
Chapter 1, Available from: http://www.sagepub.com/sites/default/files/upmbinaries/37705_1.pdf