30 Apr Credibility During Times of Crisis

By Michael Sitrick – As appeared on O’Dwyer’s

In my decades of experience in crisis communications, I have rarely seen such uncertain times as this for corporations and businesses, even following 9/11 and the 2008 recession. Unless you are in the enviable position of running home delivery services or toilet paper manufacturing, there are few businesses that are likely to remain unscathed, presuming they survive. Adding to the uncertainty, consumers are bombarded every day with apocalyptic headlines and body counts, not unlike what we experienced during the Vietnam War, when the evening news provided a running tally of American deaths.

Except now the war is at home, and those deaths are not abstract numbers. They are our neighbors, family members and coworkers. The virus is a silent enemy that lives among us, not in some faraway desert or jungle. It has not only devastated our population and altered our lifestyles, perhaps irreparably, it has leveled our economy.

Few companies are unaffected, whether it affects sales, or the health and well being of employees. It has also upended the advertising and PR business, albeit with a few exceptions. Many companies have had to scramble to produce new marketing messages that strike a balanced tone of concern with branding, while avoiding sounding like they are tone deaf. Hell hath no fury like a social media mob that thinks a commercial, or for that matter a social media posting, is out of touch, to say nothing of a journalist who sees such a commercial or posting or receives an awkward PR pitch.

Companies that survive the crisis are likely to be stronger and more nimble for the experience. But they will also be evaluated for how they survived. Were they honest with customers, employees, financial analysts and stakeholders? Or did they fumble and fudge? Despite the title of my first book, “Spin,” in that book and in my subsequent one, “The Fixer,” I stressed the importance of telling the truth and being honest in one’s communications. I have done the same in my practice. Full disclosure of problems as soon as possible is often the best way to avoid giving a story “legs,” in which new revelations dribble out that create mistrust. While the up-front disclosure may create short-term challenges, a company’s reputation will be better for it in the long term. And as I often counsel clients, if you don’t tell your story, someone else will tell if for you.

Fundamentally, I do not believe the core aspects of communications will change after the crisis passes, even if it lays waste to some media outlets. All constituencies—whether customers, employees or shareholders—deserve and demand transparency. Depending on the industry, regulators and politicians may impose it. Better to be ahead of the curve before the steering wheel is taken from you, and someone else is driving the narrative.

I have worked with both individuals and corporate clients throughout my career, many of them facing dire circumstances and make-or-break moments. Inevitably, the successful ones are those that don’t underestimate the situation, and plan in advance. While no one could have fully prepared for the crisis we are experiencing, there are several steps that should be taken.

• Communicating with employees should be a top priority. Take whatever steps are necessary to ensure the health and welfare of your employees and communicate with them on a regular basis. Keep them up to date on what is happening—both good and bad. A number of companies have adopted the term “team members.” Whether or not you use that term, treat your employees like members of the team. The saying I adopted early in the life of my firm, “If you don’t tell your story someone else will tell it for you” does not only apply to dealing with the media. It applies to communicating with employees, customers, vendors and investors. You can fill the information void with facts, or you can leave it empty and it will be filled with rumors. If there have to be layoffs, explain to the entire employee base what you are doing and why, as well as how it is necessary for the current and future stability of the business. If you get a call from the media, whether about layoffs or the stability of the business, once again if you say no comment there is a high likelihood that void will be filled with a disaffected employee, competitor or “expert talking head.” And there is a good chance those quotes will be without attribution.
• How customers are treated is another area that gets outsized attention during this crisis. The airlines, concert promoters and vacation home rental industry were harshly criticized early on in this crisis for refusing to refund money when trips and events were cancelled due to government lockdowns. Many companies struggled to explain the policies that restricted refunds—or at least that is what it looked like from the media coverage. Those that made amends later on saw their explanations and good deeds drowned out by the consumer outrage and media criticism. One of the ultimate penalties for this behavior is state-level and/or Congressional action, coming inevitably after politicians haul corporate executives into hearings where they are immediately put on the defensive.
• Companies need to make a hard analysis when faced with these circumstances: Is the cost of upfront goodwill less expensive in the long run than lasting reputational damage? If there is a legitimate reason for refusing the refunds legally, say so in a clear and understandable way. If you get a reporter who debates you on the law, get a company lawyer on the phone. You might also look at expanding the time period for reusing the tickets and perhaps waiving the penalty for changing flights or tickets if there is one. While there is no magic potion, I have assisted many clients where, in hindsight, the crisis could have been mitigated early on, before the headlines and negative stories.
• One group that is often overlooked in communicating during a crisis are the company’s vendors. If you want to ensure that your goods and services continue to be provided on normal terms, make sure your vendors hear from you, as opposed to the rumor mill, which can be fueled by competitors. This is particularly important if your company has been the subject of media articles which indicate that it is facing financial “challenges,” which could cause vendors to withhold shipments. An email from the company’s CEO and/or a call from a senior executive can do a lot to ensure good relationships continue and unwarranted fears are assuaged.
• Finally, how companies respond as corporate citizens in their communities will also be remembered in the long run. There is no shortage of opportunities to donate to local food banks, or assist first responders, in times of crisis. For companies with strong balance sheets, these are small, symbolic efforts that pay back far more than they cost. And, the charity recipients are often happy to do the work of publicizing the good deed.

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Michael Sitrick is the founder, chairman and CEO of Sitrick And Company and author of “Spin” and “The Fixer.”