A roundtable discussion with the executive staff at J. Addams & Partners.

Can a crisis management plan even assist small businesses?

Kristin Wohlleben: Well, it's not just small business. Any business can be knocked off course by the surprising and fast-moving events of a crisis.

Large corporations can be hit by well known problems such as product tampering or recalls, environmental accidents or spills, employee deaths on the job or financial or corporate mismanagement. You might think that every large corporation has a well developed crisis plan, but that’s not always the case. To make matters worse, in a crisis, large corporations can be hampered by their own bureaucracies, internal politics and lack of communication.

Smaller companies can be vulnerable to a robbery or fire; a hostage situation; a neighbor’s chemical spill; midnight dumping; embezzlement by an employee; or a rash or rumor of food poisoning. These organizations aren’t calcified by bureaucracy and politics, but can be overtaken by events out of sheer lack of understanding their vulnerabilities.

Katherine Canipelli: Even nonprofit organizations aren't immune. They can be vulnerable to executive and financial mismanagement or programs that go awry. These organizations are normally focused on their work and not necessarily structured to respond to emergencies.

Because crises can be disastrous for a company whose executives may have planned for everything but the unexpected, a crisis management plan is like an insurance policy: you’re smart to have it, and you hope you never have to use it.

How does one go about drafting a crisis management plan?

Kristin Wohlleben: Crisis planning is different for a small business than it is for a large one. Small business owners don’t have the luxury of turning things over to their legal, environmental or human resources departments. They have to depend on themselves and their key employees. But the process for small business doesn't have to be hugely complex.

We developed a guide for small business owners on surviving chaos that covers the basic steps.  Some of these are:

1. Form a team, now: Select the key people who will be responsible for planning and carrying out a crisis plan.
2. Let your team work together, building trust and accruing an intuitive knowledge of working together. For example, ask the team to assess company strengths and weaknesses, using a matrix and assigning a value to each.
3. Assess your organization’s audiences -- employees, customers, neighbors, etc. and how you communicate with them. Assess your adversaries and how they might use the crisis to your detriment.
4. Beyond planning for actual events, put communications processes in place that will help you respond to and defuse a crisis.
    

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What are the key elements of a successful crisis management plan?

Chet Richards: The first element is planning, although planning alone carries too much significance. Too many executives are lulled into believing that excruciatingly detailed plans are sufficient to respond to a crisis. But what happens when you plan extensively to screen everyone who comes through your lobby, and a terrorist flies a plane into your high-rise?

The keys are planning paired with speed and agility in being able to respond to the unexpected. This requires people who have trust and confidence in one another and who share a common vision of what needs to happen.

Gail Davidson: It’s also really important to remember that managing a crisis doesn’t mean covering up the problem or running away from accountability. It means acknowledging the problem, assertively telling your side of the story, correcting the problem and going on with your business in a way that minimizes damage both to your reputation and the company’s.

What types of businesses (industries) would benefit most from crisis management?

Chet Richards: Any business can experience a crisis. But if you’re a one-person business operating out of your home – for example, a writer – you’re a little less vulnerable than a higher-profile company with a number of employees and a public place of business.

No matter what your business – think about something as innocuous as a neighborhood coffee bar, a laundromat or a dry-cleaner. Customers at the coffee bar can get food poisoning and point to you; the laundromat could break a pipe and flood a neighboring business; a dry-cleaner might accidentally spill chemicals. One of your jobs as a business owner is to assess where your vulnerabilities are and try to anticipate what problems are most likely to happen or would cause the most damage if they did. Clearly, you can’t anticipate that someone with a gun will break into your office and start shooting people, just as the day-trader, Mark Barton, did a few years ago in Atlanta. But you can ask yourself what you’d do if something like that did happen. You know your business and where you could be at risk.

 How much of crisis management is about dealing with the media?

Jeannine Addams: Dealing with the media is an important part of the process. When a crisis is compounded by hordes of deadline-pressed reporters, many of whom appear to know little about business, or in some cases, seem to be anti-business, it can be daunting for the responsible executive. Reporters going after a story can be like sharks in a feeding frenzy, and the business executive facing a crisis without knowing how to deal with those reporters may react in all the wrong ways. So it’s important to understand how reporters work, what they need and how you can respond most effectively while still communicating your side of the story.

The other parts of crisis management involve dealing with the other audiences who might be affected by the crisis. They could be employees, customers, other companies in your industry, regulators, local officials, business neighbors, or even competitors who might try to capture business from your customers by taking advantage of your crisis.

Can you provide an example of an instance in which one of your clients had to use its crisis management plan and the outcome?

Kristin Wohlleben: We have to honor client confidentiality, but here's a case history with the client identity concealed.

One of our clients installed a new piece of environmental control equipment in its manufacturing facility. Almost immediately after it was installed, it malfunctioned, allowing a potentially hazardous material to escape into the air for a brief period of time. There was a day care center about ¼ mile from the plant. When the parents heard about the release, they were terrified that their children might have been harmed, and they became outraged at the situation.

Our client took responsibility for the problem, contacting every parent, the school administrators, and the teachers. We also contacted the mayor, other officials, and the local newspaper. We held an open town meeting led by our client's executives from the company’s headquarters. The speakers included local plant managers, an outside environmental consultant and a doctor who specializes in maintaining the health of workers in our client's industry.

We developed a presentation describing what happened, how it happened and the result. The doctor described the effects of exposure to the material and told parents what symptoms to look for. We offered free medical exams for children with a local doctor who was known and trusted in the community. And we explained what we had done to prevent the problem from happening again. The meeting lasted four hours, and our clients answered every question any person wanted to ask. In the end, the parents, teachers and administrators walked away satisfied that children were not harmed and that this was not an occurrence caused by irresponsibility.

Gail Davidson: Beyond that, we scheduled a series of open houses at the plant throughout the year, inviting parents, teachers and members of the community to tour the facility to see the manufacturing process and the environmental controls. The result was that people in the community learned about our client, understood its manufacturing processes and what it did to be a responsible corporate citizen.

Crisis or no crisis, we recommend that any company with manufacturing facilities open its doors regularly to people in its communities.

Katherine Canipelli: A more high profile example (and not our client) is Johnson & Johnson’s response to the Tylenol poisonings. Even though it happened more than 20 years ago, it still holds up as a classic example. When an outsider put poison into some Tylenol capsules, J&J acted quickly, decisively and very, very well. It immediately pulled all of its products off the shelves, regardless of the cost, and communicated continuously with its customers, consumers and the news media. The executives at J&J no doubt realized how expensive it would be to remove all of the Tylenol from every retail shelf, but they didn’t let cost stand in their way. They considered the cost of another death from poisoned pills, and they understood the long-term loss of consumer confidence and market share that would result from a weak or compromising response. Then, after the immediate crisis was under control, the company developed extensive tamper-resistant and tamper-evident packaging to reinforce product safety and consumer confidence. It was a brilliant example of the right way to respond in a crisis, and it set the benchmark for other companies to follow.

What do small businesses require in addition to a crisis management plan in order to maintain a good public image?

Katherine Canipelli: A good public relations plan helps. Most often, we fear what we don’t know. So if you’re a stranger to the people who count, you’ll have more work during a crisis.

Chet Richards: If, during good times, you communicate professionally and regularly with the people who are important to you – and they could include employees, customers, other companies in your industry, regulators, local officials, or business neighbors -- you build a reservoir of trust and knowledge about your company that will work in your favor during a bad time.

Where do PR consultancies fit in?

Jeannine Addams: We help develop those public relations and crisis plans. It really disturbs me that a lot of people think public relations is cover-up, whitewash and spin. For the most part, that’s simply wrong. Of course, there are always some bad apples in every profession who give it a bad name. But we couldn’t do what we do if we practiced deception. Every day, we deal with the same audiences as our clients do. We’d all be out of business if we didn’t tell the truth and be able to back up what we say. Reporters won’t stand for it; regulators won’t stand for it, and consumers are smart enough to know BS when they hear it.

Any other comments?

Kristin Wohlleben: While no one wants to be involved in a crisis, there’s no need to be afraid of one. If you have even a simple plan in place, and the trust of the people who work with you, you’ll be one step ahead of the game. No plan will cover every eventuality, and things don’t always go according to plan. But a plan will give you a degree of security and confidence, and the ability to think on your feet that you wouldn’t have otherwise.

Jeannine Addams: My friend, The Reverend Vincent J. Donovan, is a Catholic priest in the Holy Ghost order and a writer. In one of his books, he addressed crisis and chaos. He says: “Chaos in itself is not evil. It is positive. Out of chaos can come something new and creative, something not planned at all. Chaos offers the possibility of choice. It is an expression of the world’s freedom to be. Chaos holds out the possibility that we may become people unimaginably greater than anything others could have planned for us or expected of us.”  I think his words really reveal the key to surviving and learning from the crises we are all going to face.