Are You Ready for a Crisis?

Abbott Laboratories’ food manufacturing plant in Sturgis, Michigan has been in the headlines recently, following a voluntary February recall of specialty infant formulas that resulted in severe shortages for at-risk babies. The finger-pointing has begun, with some blaming Abbott for the ongoing issue, while others believe the FDA should be held responsible. Despite air shipments of product from other countries, hospitals, parents, and caregivers continue to struggle to find the only product they can safely use to nourish their babies. As a bystander watching this situation unfold, it brought to mind the need for companies to have a crisis management strategy.

Crisis management refers to the practice of preparing for negative incidents, minimizing their damage and disruption, and getting an organization back on track as quickly as possible. One of the most well-known cases of crisis management relates to the still unsolved cyanide poisonings associated with tainted Tylenol capsules that resulted in the death of seven people in Chicago in 1982. The crisis strategy of Johnson & Johnson’s leadership involved a product recall of all Tylenol product on shelves (costing millions of dollars), regular communication to various constituencies, including the medical field and consumers, and a hotline where consumers could call with questions. The intent of the strategy was to show the public that the company placed the well-being of their customers above profit margins. This strategy helped the company recover relatively quickly and restore confidence in the brand. Almost 40 years later, it is still used as a case study in model crisis management.

There is not a company that is immune from a crisis, and a quick Google search will provide you with a primer in cautionary tales of what generally does not work. Your company may not have the name recognition of a Johnson & Johnson, Abbott Laboratories, United Airlines, or Uber (all who have also had negative crisis management stories written), but no doubt a lot of hard work has gone into developing your reputation. Being armed with a plan on how you will response to a crisis is key to getting your business back on track as soon as possible.

Crisis managers and teams anticipate likely threats and develop strategies to cope with their impact. It is critical that your team include leadership from all areas of the company including operations, legal, marketing, and human resources. The process typically begins by identifying potential types of threats/crises and then determining what level of response is most appropriate. Not all situations will require a public response. For example, one noted restaurant chain was faced with a public challenge initiated by the husband of a terminated employee, when he started an onslaught of customer involvement supporting her rehire after posting about her termination on various social media sites. The restaurant chain handled the situation by not responding, and after a few weeks, the disruption died out.

It is never too late to start the processes related to crisis planning. If a formal plan is lacking, a checklist of the steps to be considered is a great thing to have on hand. MRA’s website has tools that are helpful as you navigate the process:

• Preparing for a Crisis Situation Checklist
• Crisis Management: Leading From the Front (video)
• Disaster Planning and Recovery Toolkit

Many companies find that once a plan is ready, it functions like insurance – something you need to have and hope to never use.