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The Definitive Guide to Managing the Message
By Steven Fink
The McGraw-Hill Companies, Inc.Copyright © 2013 Steven Fink
All rights reserved.
You Can't Make This Stuff Up
"I'd like my life back."
With those five whiny words at the height of one of the planet's worst environmental crises, one of the world's most successful CEOs cracked publicly under the strain of crisis-induced stress. That pathetic plaint forever sealed his reputation as a seemingly unfeeling, gaffe-prone dunderhead whose glamorous, jet-setting lifestyle was inconvenienced by the tragic loss of 11 lives during a massive oil rig explosion, the resulting runaway oil spill in the Gulf of Mexico, and the heartbreaking loss of livelihoods for countless thousands of area families—all caused by his company, his minions, and their combined sins. That one ill-chosen utterance, in full view of the world's media, at once thrust former BP head Tony Hayward into the pantheon of such other insensitive, kindred luminaries as Marie ("Let them eat cake") Antoinette and Emperor ("Hand me my fiddle") Nero. Did Hayward fiddle as the Gulf of Mexico was engulfed in oil and flames? In a manner of speaking: he went sailing on his luxury yacht half a world away, while the ashes of his self-immolated image were blown out to sea.
What kind of crisis communications message was Hayward intending to convey to the world? How does such a successful and accomplished executive crumble so completely on the world stage of a megacrisis? Was it ineptitude, fear, or lack of crisis communications training that allowed him to turn a worldwide crisis into a "What about me?" moment?
But Hayward—a complete novice in the art of crisis communications—was on a roll and was only just getting started. In fact, it was nearly impossible to stop him. He later "guesstimated" publicly that the spill was averaging a mere 5,000 barrels a day ("A guesstimate is a guesstimate," he truculently sniveled in the face of demands for more accurate numbers) when the actual number was closer to 60,000 barrels a day, and he further pooh-poohed the environmental impact of the soon to be millions of barrels of oil awash in the Gulf as "very, very modest." He also predicted that the spill would be "tiny" compared to the size of the ocean, conveniently overlooking the fact that prevailing winds and unrelenting tides were driving the oil toward previously pristine shores, once-rich fishing areas, family-oriented recreational beaches, fragile marine and bird sanctuaries, and delicately balanced ecosystems. When the well was capped for good in August 2010 and the flow was permanently stemmed—more than three full and agonizing months after the drilling rig explosion—official government figures put the total spill at nearly five million barrels, or some 200 million gallons, making it the worst offshore oil disaster in U.S. history and completely dwarfing the previous record holder, the Exxon Valdez, which struck a reef in Prince William Sound, Alaska.
"Very, very modest," indeed.
Meanwhile, testifying on live television before a congressional investigative committee, Hayward responded petulantly to a U.S. representative who wanted to know what happened at the explosion of the deepwater oil-drilling platform, saying, "I don't know; I wasn't there."
In response to direct congressional questions seeking more information and less obfuscation, his testimony included such cover-your-ass gems as, "I'm not a drilling engineer" or "actually qualified" in these matters, "I'm not a cement engineer," and "I'm not an oceanographic scientist." It was becoming all too clear that Hayward was not a lot of things, including a competent crisis communicator. For someone who had served for years as head of oil exploration and production at BP before ultimately becoming CEO, Hayward went out of his way to portray himself as ignorant of any aspect of drilling operations. He even testified before a disbelieving Congress that he had "no prior knowledge of the drilling of this well, none whatsoever."
But an angry Representative Henry Waxman, chairman of the House Energy and Commerce Committee, accused Hayward of blatant "stonewalling" and charged, "You have consistently ducked and evaded our questions."
But even feigned ignorance is no excuse. If you're the CEO, you're paid to know. And in Hayward's case, he was paid plenty.
As a contributory consequence of all of the foregoing missteps, the stock value of BP, then the world's fourth-largest company, soon plummeted into an abyss deeper than its Deepwater Horizon oil-drilling rig. The beleaguered company lost $17 billion just in the second quarter of 2010, on top of the more than $32 billion it was forced to set aside for spill-related costs. At one point, BP's market value declined 40 percent and the company was forced to sell off valuable assets to help pay its mounting costs.
The passage of time hasn't helped the oil giant recover: in the second quarter of 2012, BP reported an additional loss of $1.4 billion. A drop in the oil- slick ocean to a deep-pocket company like BP, maybe, but a disturbing trend indicating perhaps a deeper crisis.
But the silver lining for Mr. Hayward was that his fervent wish ultimately was granted: he got his life back. His board of directors removed him from office ... although he was exiled to Russia.
The only relevant question was: what took them so long?
Even as he was exiting the oil-slick stage, the unrepentant Hayward still didn't know when to shut up, publicly bellyaching in a farewell interview with the Wall Street Journal, "I became a villain for doing the right thing."
Shortly thereafter, upon the completion of the company's own internal investigation, he led an official corporate chorus of finger-pointing at other companies involved in the construction and maintenance of the rig. BP, by now the consummate poster child for failed crisis communications, fared little better in its corporate doublespeak, calling the accident "a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces."
But not our fault.
Then, in a sweeping settlement agreement with the U.S. government toward the end of 2012, BP agreed to pay a $4.5 billion fine, pleaded guilty to 11 felony counts related to the deaths of the workers on the oil rig, and pleaded guilty to one additional count of obstruction of Congress.
Let's be clear: effective crisis communications would not have stemmed the flow of oil or cash, but it would have saved the company's image, its stock value, and its CEO and helped it survive this crisis with its reputation intact. Poor crisis management and even worse crisis communications have left the company reviled around the world and facing a mountain of litigation and cleanup costs that will take years and years and billions and billions of dollars to overcome.
Rehabilitating its badly tarnished image will take much longer.
The long, sorrowful travails of BP (formerly British Petroleum) are by now well known throughout the world. What is neither well known nor well understood is how such a successful company could have self-imploded on such a grand and public scale. No, I am not referring to the company's oil-rig disaster; I am talking about its total meltdown in its woeful crisis communications efforts. An army of skilled surgeons would not have been able to cure its epidemic outbreak of nonstop foot-in-mouth disease, led by its feckless leader. It is permissible to ask without sounding snarky: seriously, what was he thinking, and why didn't anyone stop him?
Is this critique an unfair and undeserved "bashing" of a hapless business leader? Not at all. In today's instant, 24/7 news media paradigm, it is indefensible and inexcusable that BP unleashed on the world such a loose and woefully unprepared cannon as Tony Hayward. Businesses and the men and women who run them have a fiduciary responsibility to be well versed and well trained in crisis management and crisis communications (see Chapter 32, "The Failure of Business Schools," for more on this), especially since public images and stock prices rise and fall on such utterances and the perceptions they engender. It is almost inconceivable that Hayward had received no instruction in crisis communications during his corporate climb to the top of BP's ladder, which makes his unfortunate display all the more puzzling. At a minimum, had he learned nothing from watching scores of other companies in crises over the years? A scorecard was needed to tell which was gushing more, the well or his mouth.
Which begs the ultimate question: is Tony Hayward the sort of unfeeling, uncaring, pompous, arrogant jerk he appeared to be on any number of occasions? Going out on a limb here, I'd say: probably not. How is it possible, then, that this previously proven leader of such a successful behemoth of a company could misspeak so often and so publicly, and in ways that would heap shame, ridicule, and public scorn on himself and the company he once led, resulting in a significant loss in personal and company prestige, credibility, and market value? Leaders like Hayward spend a lifetime in stressful business situations. What is it about sudden, unexpected, and public stress—such as that which is almost always associated with a crisis—that causes the wheels to fall off many companies' communications wagon? Do they choke, and if so, why?
Moreover, what are the critical lessons that managers today need to know in order to survive the ever-taxing gantlet of crisis communications challenges? Every time a company undergoes a public crisis that is widely reported in the media, prudent company managers and executives should put themselves in the picture and ask: How would I do in a similar situation? How would our company respond? Would we have done better? More pointedly, if a guy like Hayward and a company with the resources of BP can screw up their crisis communications so badly, what chance do I have?
The lessons in this book are designed to give you an excellent chance.
When you see some business leader making questionable—if not moronic—public pronouncements under the very real stress of a crisis, ask yourself what he's doing wrong and how you would handle it differently. This book will tell you, by word and by example, how crisis communications should be handled in order to survive all manner of crises, but it's a good learning exercise to second-guess the decisions and the public pronouncements of those in the crucible while safely ensconced at home in your den. After all, when it's your crisis, others will be judging you just as harshly.
In Chapter 3, we'll explore what Tony Hayward should have said—an important alternative for you to keep in mind when it's your crisis.
Defining Our Terms
First, though, let's define our terms.
People used to say that all the time; sadly, most don't these days, and we as a community are the poorer for it. A lack of up-front agreement on what a given discussion is about leads to ambiguities, confusion, and, at times, dissension—all of which I hope to avoid in this book, and you most assuredly want to avoid in dealing with a crisis.
For example, crisis management is not synonymous with crisis communications, and vice versa, even though far too many people use the terms interchangeably, sometimes with tragic results. There is a distinct and important difference between the two, and knowing that difference can be a lifesaver. More on this later.
So, let's define our terms:
A crisis is a fluid and dynamic state of affairs containing equal parts danger and opportunity. It is a turning point, for better or worse. The Chinese have a word for this: wei-ji.
Crisis management deals with the reality of the crisis. It is the actual management of the precarious situation that is rapidly unfolding. It is making swift and vigilant decisions, gathering resources, marshaling troops, and so on, sometimes under great stress and enormous time constraints, to resolve a pressing problem. It is (hopefully) gaining the upper hand over an event that could potentially cause great or greater harm to a company, its various publics, its employees, its stakeholders, and its bottom line. It is preventing the situation from escalating. It is, in short, the reality of what's going on—the actual management of the drama—often behind the scenes and far from public view. It is the steps taken by the crisis management team that will determine the ultimate outcome of the crisis.
Crisis communications is managing the perception of that same reality. It is telling the public what is going on (or what you want the public to know about what is going on). It is shaping public opinion.
Thus, crisis management deals with managing reality; crisis communications deals with shaping perception.
While this book will address both crisis management and crisis communications, its focus will be on the latter—shaping critical perceptions and opinions during a crisis. If a crisis is being managed well, the goal of effective crisis communications is to form the public's perception to match the reality. If the crisis is not being managed well, different strategies are required, which will be discussed.
It's the difference between being a thermostat and a thermometer. As Princeton's Cornel West once put it, "A thermostat shapes the climate of opinion; a thermometer just reflects it." The thermostat of crisis communications, when done right, is transformative.
Ironically, after the BP well finally was capped, retired U.S. Coast Guard Admiral Thad Allen, who belatedly was put in charge of overseeing the crisis in the Gulf, summed up BP's efforts this way: "At the wellhead, I think they've done very well. What they are not good at ... is one-on-one transactions with individual citizens. And I think that's where the biggest gap in performance has been and where the most improvement needs to take place."
In short, even though BP, in Admiral Allen's professional assessment, may have been doing everything that was technologically possible to stem the oil flow and manage the reality of the crisis, the company failed miserably at its lame attempts at crisis communications, and that cost the company dearly. Because as essential as good crisis management is, in the end, crisis communications—or the lack thereof—is all the public remembers.
It is an immutable law that in the pitched battle between perception and reality, perception always wins.
THE ROLE OF PERCEPTION IN CRISIS PLANNING
The majority of our discussion is about using effective crisis communications strategies to generate positive perceptions of your company when it is in a crisis. But it is worth noting that some have examined the role that senior management's perception of the crisis plays in how the actual crisis is managed.
"The perception of crises may ultimately affect crisis outcomes," writes business communications professor John M. Penrose of San Diego State University. He believes that if the likely outcome of a crisis is positive and more controllable, the company is likely to include more team members in the resolution process, which will generate an increased of number of ideas and viable alternative options.
"On the other hand, the perceiving of a crisis as a threat will cause managers to limit the amount of information they consider," he writes. "Thus, perception has the potential to influence the extent to which an organization is willing to engage in crisis management activities."
This seems to fit the classic definition of a self-fulfilling prophecy, and Penrose admits that more study is needed.
The fact remains that virtually any crisis, as stated earlier, may turn out either positive or negative. But since you don't know at the outset which it will be, it is incumbent upon prudent managers to devote all appropriate resources and consider all possible alternatives early so that a positive outcome is given a fair chance of prevailing.
Also, Penrose is in agreement with our overarching theme, "Crises can destroy a company's reputation in a concentrated time frame."
Just ask BP.
Excerpted from Crisis Communications by Steven Fink. Copyright © 2013 by Steven Fink. Excerpted by permission of The McGraw-Hill Companies, Inc..
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