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Learn the secrets of stakeholder communication during a crisis

By Kim Harrison,

Consultant, Author and Principal of www.cuttingedgepr.com

Success in crisis management depends largely on how quickly and accurately your organization communicates with its stakeholders. Stakeholders have something at risk, and therefore something to gain or lose as a result of your organization’s activity. By using their influence, stakeholders hold the key to the environment in which your organization operates and therefore its subsequent financial and operating performance.

During a crisis your organization has to look at itself from your stakeholders’ perspective because stakeholders will be most concerned at how the crisis incident will affect them. They are expecting your organization to communicate with them, so it is vital to be proactive if possible. Developing a stakeholder relations management strategy around crisis simulations will be a great help to guide the corporate actions when a crisis does hit.

Typical stakeholder groups

Typical stakeholder groups to take into account include:

Adversarial groups

Bankers

Brokers, investment advisers

Business leaders

Community leaders

Competitors

Consumer action groups

Contractors

Creditors

Customers/clients

Directors

Employees at all levels and locations

External advisers

Families of employees

Franchisees

Financial markets

Government regulators and utilities

Insurance companies

Investors

Law enforcement agencies

Licensees

Neighboring residents and businesses

News media

NGOs

Owners of the properties on which your organization’s operations are located

Politicians

Regulatory officials

Senior management

Shareholders

Suppliers

Unions


Obviously the key stakeholders vary according to the organization and the circumstances of each crisis. However, the concerns of each broad group can be identified well ahead of any crisis. For instance:

  • Employees want their families to know they are safe, as would emergency and medical workers.

  • Families of victims want progress reports on their loved ones and want to know what happened in the incident.

  • Directors and senior management want to know the big picture information about the incident and the impact on the viability of your organization.

  • Community leaders want to know sufficient resources are being devoted to the crisis response and victims, and that the organization is showing leadership and has the incident under control. They need information they can pass on to people they think should know about the crisis, and they want to express their concern.

  • Politicians want to inform their constituents, review regulations and laws for adequacy in the light of the crisis, and want to have the opportunity to express their concern.

  • Peak industry bodies want to know about the business issues such as the impact on your organization’s revenue, any legal liability, when the organization will return to business and what protection was in place for employees.

  • Finance sector stakeholders want to know the impact on revenue and profitability and any likely future financial implications. Such stakeholders include creditors, suppliers, insurance companies and bankers.

  • The media want access to information and to spokespersons so they can report within their deadlines.

  • Other stakeholders want to be included in decision-making relevant to them, and want access to information about the crisis.

None of the stakeholder groups may start out as antagonistic, but each may quickly become an enemy if the contact is handled badly or ignored. Each group will need consistent, reliable and credible information quickly.

The stakeholder groups affected by the crisis need to be prioritized by their importance to the future of your organization. Even though the news media may be clamoring for attention, it is crucial to attend to the needs of the key stakeholder groups first. Generally it is best to make the key priority your own directors, management and employees because they in turn will have to respond to many other people when news of the crisis spreads.

The main understanding they are seeking is that your managers are effectively dealing with the situation, and operations are on the way back to normality. The best overall principle is that those who normally deal with a particular set of stakeholders should continue to communicate with their stakeholders about the crisis. This should be done as soon as possible with information that is as accurate as possible.

Employees should be the main priority

In times of crisis, clear lines of communication should be established to reach employees at all levels and in all locations. A procedure should also be set up for dealing with employee problems relating to the event. In many crises, employee issues emerge as the most important factor.

Questions need to be resolved by the public relations department so you can inform other stakeholders about:

  • where employees can obtain information – from their usual manager or from special telephone lines, meeting rooms, notice boards or other sources;

  • whether there is a monitoring system for post-traumatic stress of employees;

  • if there are services available for families of victims;

  • whether transport is needed for victims and their families.

Planning should take into account ways to continually update information during a crisis. For every message to the media, there should be a prior message to employees. These can be distributed in face-to-face briefings by managers and supervisors, in mass meetings in a public venue, via telephone hot lines, through telephone messages to homes, in public address system announcements and by progress statements handed out at gates or entrances, via local radio, by email and on the company Web site, intranet and extranet.

All information about names, injuries or cause of death must not be released until authorized. The authorization process should be an integral part of the crisis planning, especially at isolated locations.

Your management should have ways to gain emergency access to employee records so that families can be contacted quickly where there are serious accidents. The speed and care with which an organization deals with a family can be a source of great public and media focus.

Surprising facts about news sources

US research has found, surprisingly, that the most important sources of news during a crisis came from government – either politicians or employees of regulatory agencies. 1 This finding points to the need to brief government stakeholders as a pressing priority during a crisis, preferably as part of ongoing communication programs.

Government at various levels becomes involved with crises. It is therefore essential that preparation is conducted ahead of any crisis about the compliance, regulatory or investigative role of government in the range of possible crises the organization may confront.

An effective plan for government communication during a crisis is:

  • You should identify the politicians, advisers and officials who would be involved in the range of crisis threats the organization may face. The processes, powers and responsibilities of each person and department should be identified.

  • The crisis strategy and communication process should be briefed to the relevant departments.

  • The relevant government departments should be involved in crisis simulations.

Develop partner relationships beforehand

A partner is any organization with a role in aiding the response. Partner relationships should be developed ahead of any crises so there is a solid foundation for well-coordinated work through each crisis. Typical partners may be the police and fire and ambulance emergency service units, State emergency services, utilities, and health and medical authorities. In cases where your organization is geographically dispersed, the relationships should be developed at each location of operations, where the contact telephone number and email address for every nominated contact person in the partner organization should be documented and updated every three months.

Each potential partner would play a specific role during a crisis, which should be determined beforehand by agreement with them or should be developed in the early stages of the crisis. Each partner should nominate its representative who has the authority to make decisions during the crisis.

A plan should be drafted for partner communication during a crisis (eg, email alerts, faxes, conference calls) to which everyone has agreed.

Despite every good intention to show partners a preview of media releases, it may not be possible to do so. Some aspects may be time-sensitive, and the crisis communication head may decide not to share this information due to the possibility or likelihood of a leak or premature public reference to the information by partners – not necessarily intentionally. Such leaks would most likely be made by people other than the contact person – people who may not be aware of the sensitive nature of the information or may be too rushed to remember. At the least, partners should be supplied with information at the same time as the media.

Financial markets

One of the main impacts of a crisis is on the future profitability of your organization, if it is in the private sector. Accordingly, it is vital to think through the communication pipeline connecting to the financial markets. Obviously the media will want to know the financial impact of the crisis from the start. Your senior managers need to be proactive and start communicating with their shareholders, bankers, suppliers, insurers and financial advisers. But first, if your organization is a public company, it is obliged to provide urgent updates to its home stock exchange about the financial implications. If the situation is not monitored closely and managed carefully, the financial markets may over-react to the impact of a crisis, so it is vital to contact the priority financial stakeholders urgently and keep a flow of information to the sources of information to the financial community, such as financial analysts, stockbrokers and advisers, and the government regulators of the financial markets.

Contractors

In these days of outsourcing, contractors are playing an important role in the supply chain. Therefore communication channels to contractors should be kept in mind, especially in the planning and preparation for a crisis. Usually contractors have different systems from their client organization, which can delay communication efforts. Therefore the crisis planning should take into account the coordination of organizational plans with contractors’ plans.

Other stakeholder groups

Pareto’s Principle applies to other stakeholder groups: around 20% of the people within each stakeholder group are responsible for generating 80% of what your business needs to keep operating. The crisis communication plan needs to outline how to reach those people with information in a crisis before they hear about it from the media or others. In this way, your organization will have the opportunity to explain its side of the story first. These key people, who are the most important to the future of the organization, are likely to give you the benefit of the doubt when they hear alternative versions about the crisis later from other sources.

Coordinating stakeholder communication

Response Group Stakeholders Responsibilities

Crisis Management Team

Employees and their families

Directors

Key customers

Key shareholders

Opinion leaders

Making and communicating policy decisions

CEO as spokesperson

One-on-one contact with key stakeholders

Crisis Communication Team

Crisis Management Team Leader

External subject-matter experts

Crisis participants

Media

Other stakeholders

General public

Media spokespersons

Interface with crisis participants

Liaison with external experts

Most enquiry responses

Internal/external updates

General spokespersons

 

The first step in addressing the needs of stakeholders is to identify them. Stakeholders may vary according to the situation, but your core stakeholders will literally have a stake in every emergency or crisis your organization is involved with.

The various key stakeholders can be identified and contacted as soon as possible, preferably by telephone. When the task of making contact is divided up among your designated contact people, it doesn’t take very long to reach those stakeholders. Where possible, the verbal contact should be supported by documentation sent by email or fax to minimize the possibility of recipients misunderstanding key facts. In turn, they will contact their own set of contacts, so the reliable and accurate information your organization generates is being spread fast by these opinion leaders.

Not all stakeholders are supporters. It is vital to analyze your main stakeholders and identify whether they are advocates, adversaries or ambivalents. Their reactions can be anticipated based on their affinity for your organization and the way similar groups have responded in the past. It is best to aim at maintaining the loyalty and respect of advocates, at discouraging adversaries from becoming involved and at encouraging ambivalents to stay neutral. Communication with them needs to allow for two-way dialogue because they may be able to offer insights about themselves and the handling of the crisis. In fact, a crisis may provide an opportunity to strengthen stakeholder relationships.

How to assess stakeholder reactions

You should note what each stakeholder group will want to know and their likely reactions to the crisis. The stakeholders should receive adequate communication and develop trust in your organization. Consistent themes and messages should be conveyed with empathy. A reaction management strategy should be developed to minimize the extent of negative stakeholder reactions. Management should estimate the financial impact of negative reactions and prioritize the list according to their possible impact. A forecast can be made of the amount of time likely to be needed by senior management to become involved with stakeholder relations management, which is always labor-intensive.

Timely and accurate information needs to be supplied to stakeholders. The focus should be on the most important stakeholders, those who have the most impact on your organization’s ability to conduct its business. As noted above, around 20% of the group have 80% of the impact, so it makes sense to concentrate on them and their needs. At the same time, minor stakeholders should not be forgotten; decide what communication needs to be initiated with them.

Avoid these five types of mistakes

  • Inadequate accessibility to stakeholders

  • Lack of understandability in the haste to communicate

  • Lack of enthusiasm in the contact

  • Problems with timeliness (too little, too late)

  • Perceptions of arrogance (eg stakeholders are not valued)

As a guide, it is best to be forthcoming with information, to focus on building trust and to provide good technical information to stakeholders. Methods to communicate with stakeholders include dedicated Web pages or extranets, telephone calls from management or their delegates, copies of information material supplied to media and even specially convened meetings with them.

It is important to send consistent messages to the various types of stakeholders because some of them may also be stakeholders in other organizations involved in the crisis.

References

  1. Millar, Dan P. and Irvine, Robert B. Presentation to the First International, Interdisciplinary Research Conference of the Public Relations Society of America, at the University of Maryland, 12-14 June 1998.

This article is an extract from the e-book, Innovative strategies for crisis communication, available from the www.cuttingedgepr.com

 

About the Author

Kim Harrison is a recognized authority in the public relations field. His website, www.cuttingedgepr.com, provides a wealth of informative articles and resources on public relations techniques and management.

 

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