Warren Buffet once aptly explained the effect of crisis management, saying “it takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
While a reputation can be ruined in just five minutes, more often than not, the issue that brings an organization to its knees has actually been building over time. Appropriately dubbed a smoldering crisis, the trigger event grows slowly over time, often fueled by misinformation and rumors that seep into the public domain.
A smoldering crisis is often the result of management decisions (or indecision) made without necessary foresight and are almost always propelled into crisis mode by missteps in communications. Whether it’s changes to company structure, such as layoffs, or neglecting to address negative customer feedback, smoldering crises can almost always be traced back to a decision moment followed by a string of slips in communication.
Smoldering crises are best managed by identifying the early signs. Here are some of the most common:
- One or more employees are involved, and if they talked about the issue publicly, it would negatively impact the company’s reputation
- Customers have been impacted through a product flaw, delivery or payment issues
- Employee security or retention is at stake (workplace violence, layoffs)
- Threats to your fundamental business operations, such as a data breach, sale/purchase of business unit or a leadership change
Many of these issues may seem benign on the surface, but the negative public sentiment they generate can compound rapidly when the organization fails to respond promptly and transparently. Federal disclosure requirements are increasingly forcing companies to be more transparent, presenting additional areas of vulnerability related to topics such as leadership changes, union issues and executive compensation.
Do you know how you will respond? Advance communications planning will guide you through the early warning signs, ensuring that you can respond quickly and with some level of transparency, authenticity and accountability.
By Jack Kay and Tully Nicholas