Corporate Crisis Communication Spring 201 4

1. Corporate Crisis Communication Spring 2014 Georgetown University Faculty Judith Muhlberg & Bruce Harrison Class #11 March 27, 2014 Georgetown University Corporate Crisis Communication

2. GM in the News … Again • http://www.clickondetroit.com/money/automotive/gm-ceo-mary-barra-releases-series-of-videos-answering-customers-questions/25172048 Georgetown University Corporate Crisis Communication

3. GM: CEO as Spokesperson • Content • 1. Information • 2. Apology • 3. Resolve • Style/Tone • 1. Employee communication, first • 2. EQ • 3. Confidence • Contexts • 1. Woman, mom • 2. There when it happened • 3. Toyota case Georgetown University Corporate Crisis Communication

4. ‘Two Crises’ AssignmentPaper Due April 10 • Choose: Two crises from ‘Damage Control’ text, or class discussions or guest lecturers. • Analyze: Cause, risk, stakeholders; BAO targets, communication strategies, climax or turning point, reputation outcome, recovery. Reference to our ANATOMY OF CRISIS. • Write, Chart: Prepare a brief 3-pagepaper and a chart (table or other graphic) that makes your comparison and analysis easy to grasp. Georgetown University Corporate Crisis Communication

5. Teams for Final Presentation – May 8 # 1 Boeing Brooke Cockrell Tatiana Daniel Bhumika Shah Erin Wiegert ElleniAlmandrez #2 Microsoft Sara Schuttloffel Yogita Malik Kaitlin Luna Andrea Garner Hayley Kropog Georgetown University - Muhlberg/Harrison Spring 2012

6. Teams for Final Presentation – May 8 #3 Honeywell Katie Spencer Emily Morin Melissa Wertz Emma Waldeman Catie Weckenman #4 JP Morgan Ritiksha Lobo Ana Maria Garzon Slgi Choi Olivia Peterson Sarah Heffern Georgetown University - Muhlberg/Harrison Spring 2012

7. Teams for Final Presentation – May 8 #5 Walmart OmogboyindeOnijala Jill Westeyn Annie Lorenzana Krystyna Barnard Austin Hansen Georgetown University - Muhlberg/Harrison Spring 2012

8. The Final Presentation Teams will: • Prepare and deliver to the class and faculty a 10-minute slide (Power Point) presentation • Describing cause, risk, stakeholders, SWOT (strengths, weaknesses, opportunities and threats) and other implications, and • Recommending to the “audience” (fellow class members and instructors, assumed to be representatives of the company or industry) a clear, focused and robust crisis communications action plan—with specifics on engaging the essential elements of crisis communications covered in this course. • This plan/presentation is worth 25 points. Georgetown University Corporate Crisis Communication

9. Our Class Definition of Crisis A Corporate Crisis is an event or condition that disrupts or threatens the daily operations, reputation, sustainability, and alters stakeholder perception and trust. Georgetown University Corporate Crisis Communication

10. Crisis Basics: “Topic A Bad News and the CCO “When one negative situation is topic ‘A’ bad news at The top of the organization.” Steve Harris, former CCO of General Motors Georgetown University Corporate Crisis Communication

11. You are the CCO, when something happens… • It stops you in your tracks • It changes what you were doing • It makes other things less relevant • It’s something you can’t fully and immediately understand • It’s something you must immediately handle • It disrupts your routine and plans, and everyone’s in the C-suite • It puts at risk the trust of your stakeholders • It is something you need help with Georgetown University Corporate Crisis Communication

12. Crisis as a ‘strategic inflection point’ Factors contributing to crisis fall within 2 categories: Those beyond the reasonable control of the enterprise or anyone in it: • Market conditions • Content and tone of a negative (perhaps totally inaccurate or rigged) YouTube video gone viral Controllable factors: • Consumer discontent that was not picked up or engaged. Georgetown University Corporate Crisis Communication

13. Andrew Grove’s Definition of Inflection Point “An inflection point, occurs when the old strategic picture dissolves and gives way to the new, allowing the business to ascend to new heights. However, if you don’t navigate your way through an inflection point, you go through a peak and after the peak the business declines…It is a point where the curve has subtly but profoundly changed, never to change back again.” Georgetown University Corporate Crisis Communication

14. Augustine’s Stages of a Crisis Augustine Key ideas Avoiding the crisis Preparing to manage Recognizing the crisis Containing the crisis Resolving the crisis Profiting from the crisis Norman R. Augustine, Former CEO, Martin Marietta, Harvard Business Review on Crisis Management, 2000 What can’t be avoided must be hedged Trailer parks cause tornadoes Noah built the ark early Perception causes crisis The one aspect of business in which a CEO’s influence is critical is crisis management. Georgetown University - Muhlberg/Harrison Spring 2012

15. Georgetown University Corporate Crisis Communication

16. CCO Purpose: Enable Effective Corporate Crisis Management • Three strengths of corporate communication: • Mastery of information flow • Intimacy and influence within the company’s culture • Active interaction with stakeholders and media Georgetown University Corporate Crisis Communication

17. Corporate Risk Readiness • Crisis management planning • Oriented to risk factors (see 10k), mission, governance… • C-suite, operations, facilities, sales… • Crisis communication planning • Integrated with crisis management Georgetown University Crisis Communications

18. Crisis Management Planv. Crisis Communication Plan Corporate Crisis Communication Georgetown University CRISIS MANAGEMENT Plan is prepared pre-crisis to guide senior and middle management in crisis/disaster response • Each operational unit will have its own crisis response/disaster plan • Steps the company will take in response to a crisis/disaster situation • Management and staff responsibilities • Reporting systems CRISIS COMMUNICATION Plan is prepared by CCO to coordinate with corporate management in engaging with media and stakeholders • When the crisis occurs, the CCO and team go into a management mode, guided by a standby crisis communication checklist.

19. Georgetown University Crisis Communications

20. CCO Role: Pre-Crisis Planning Focus on your 3 vital accountabilities Think through your most likely crisis situations Conduct pre-crisis intelligence Prepare crisis communication guidelines Contribute communication expertise to the company’s crisis MANAGEMENT plan Organize standby crisis-communication team, designate standby central work station Georgetown University - Muhlberg/Harrison Spring 2012

21. Exercise: Crisis Questions: A CCO Checklist Advanced Planning Georgetown University Corporate Crisis Communication

22. Break out into your Teams • Brainstorm the list of questions you need to ask in the first critical moments of a crisis. What? So what? Now what? • List your questions on the white boards • Appoint a spokesperson to share your team’s list with the class • We will re-group in 30 minutes for the report-outs Georgetown University Corporate Crisis Communication

23. In event of crisis: The CCO’s Entry • Ask questions What’s it all about? Who? When? Where? How? Why? Think like a reporter: • CRITICAL QUESTION: Is there death, danger? Think context, content, tone of communication • Understand level…a crisis or something less…a nuisance? Think your role in managing either. • Activate your communications team Think ‘FACE’ • Activate the communication center. Think 24/7 Georgetown University - Muhlberg/Harrison Spring 2012

24. Crisis Communication: FACE Formula FastThink: immediate mobilization of communicators, in crisis communication center; try for initial response within the first hour; if there’s a scene, send someone there NOW. AccurateThink: speed is good, accuracy is better; hold what we’re not sure of; we can always follow up; triple check every fact. Consistent – and CaringThink: If human harm, public safety is involved, that’s the #1 priority. Show we care. Tone of our communication; concern/sympathy for any harm, victims. Engagement Think: we will use every effective channel to listen, understand and deliver what stakeholders need Fast, Accurate, Consistent and Caring Engagement WITH STAKEHOLDERS Georgetown University - Muhlberg/Harrison Spring 2012

25. Crisis MANAGEMENT Team Georgetown University - Muhlberg/Harrison Spring 2012 Think through communication aspects • Who’s on team? Why is each chosen? Why is CCO at the table? • Does/should it include the CEO? • DISCUSS: Pros & Cons of CEO involved; if not the CEO, how do we get the CEO’s support, engagement, communication?

26. Crisis Management Plan Georgetown University - Muhlberg/Harrison Spring 2012 What is it? What’s in it? Who writes it? What facts or fears justify the effort? Who gets a copy? What makes it special to everybody who gets a copy? Do you think the Plan is likely to be used in an actual “crisis” event, or not? Why? How would you increase the use/benefit?

27. Plan Content…Questions Georgetown University - Muhlberg/Harrison Spring 2012 Steps the company will take in response to a crisis Specific staff responsibilities Reporting systems Stakeholder data Communication channels Can a plan prepare for every situation? What staff issues can be anticipated? Media issues, key channels? How would you plan for stakeholder engagement?

28. Spokesperson Georgetown University - Muhlberg/Harrison Spring 2012 • Who are the candidates? • Can there be more than one spokesperson? Explain. • How do you assure ‘one voice’? • When is it essential for the CEO to do it? • If there is a crisis site, who goes there? Talk about legal, other risks of a crisis spokesperson…how to deal with it

29. What the media (and your stakeholders) want to know • What happened? • Were there any deaths or injuries? • What is the extent of the damage? • Is there danger of future injuries or damage? • Why did it happen? • Who or what is responsible? • What is being done about it • When will it be over? • Has it happened before? • Were there any warning signs of the problem? Source: Crisis Communications, Kathleen Fearn -Banks Georgetown University - Muhlberg/Harrison Spring 2012

30. Special focus on internal stakeholders Whenever possible, tell employees first Use all channels to ensure employees understand the corporate position – they are your strongest ambassadors If there is action the employees should take to mitigate the crisis, tell them Advise employees to direct media questions to the designated spokesmen – and help them understand why a consistent, well-informed message is important Listen to learn what they KNOW, how they FEEL Employee perceptions can make or break communication/trust “WE” attitude is the strongest crisis message platform Georgetown University - Muhlberg/Harrison Spring 2012

31. One CCO’s take-aways* Media is key, and must be a priority consideration Government regulators and unions should be early targets of information Customers, suppliers and community leaders can serve as advocates/supporters of the company if they are equipped with the right messages 3rd party experts can be the most effective “knights in shining armor”; they validate our spokespeople Always tell the truth – and if you don’t know the answer, admit it, but go ahead and share the process you will use to find the answer *(A CCO Who Has Been in the Hot Seat: Nicholas Ashooh, AIG, Alcoa) Georgetown University - Muhlberg/Harrison Spring 2012

32. Best achievable outcomes Damage is controlled, risk is reduced Trust (in the company and brand) is protected Leadership is visible, on ‘scene’ if there is one Focus is on stakeholders, their perceptions The ‘deal’ with stakeholders is preserved Every stage of the crisis is managed, constantly, consistently; FACE is forefront Debriefings are constant, lessons are learned for future Crisis communication was part of the answer Georgetown University - Muhlberg/Harrison Spring 2012

33. CCO ‘New Model’ Leadership: Pre-Crisis Initiative • Adopt crisis prevention as ongoing vigilance to assure enterprise reach of financial, social, safety, health, and civic responsibility goals. • Tie your effort to the realities defined by the company’s SEC 10-K risk list. • Be proactive with others in the C-suite to stay aware of any risk elevation. • Build communication influence: create your own stakeholder perception intelligence systems to plug into the stakeholder systems for early alert: red flags that could grow into crisis situations. • Initiate regular, calm conversations with C-suite colleagues to assure top-level effort to prevent rumblings from reaching unplanned disruption and crisis levels. • Be prepared: lead the readiness, appoint people in the communication staff, and prepare online and operational facilities for immediate response to a real crisis. Georgetown University Corporate Crisis Communication

34. Case Studies: Damage Control Applied April 3: Your Opportunity to Brief on Classic Case Studies with Eric Dezenhall – ‘Damage Control’ Author Bonus-Points Assignment Georgetown University Corporate Crisis Communication

35. Georgetown University Corporate Crisis Communication

36. Bonus-Points Exercise • Team 1 Chapter 11: Wendy’s Chili • Team 2 Chapter 13: Exxon Valdez • Team 3 Chapter 13: Pepsi Syringes • Team 4 Chapter 15: TYCO • Team 5 Chapter 16: Browning-Ferris Industries • Each team presents 30-minute review. • Author Eric Dezenhall will give you his feedback. • Every team member receives 2 bonus points toward her final grade in this course. Georgetown University Corporate Crisis Communication

37. Briefing Format A common process Georgetown University Corporate Crisis Communication

38. You will analyze communication factors in case studies with these guides: (adapted from Dezenhall) • Who is the ‘victim’ and who is the ‘villain’? • Is the company taking the initiative? Is it on offense? • Is the company trying to change the focus? Change the debate? Rally its base? • What is the company’s main message? Or defense? • Is the company wrapping its argument in a principle? Security, Safety, Privacy, Choice, Justice, Economy…? • Has the company apologized? If so, did that help? • What will be the outcome? Will there be life after the crisis? Will the torpedoed ship survive? • Communication recommendations? What do you suggest for the company in the post-climax period? Georgetown University Corporate Crisis Communication

39. Your Case • Victims: • Villain(s): • Event or Condition: Georgetown University Corporate Crisis Communication

40. Disruption from the Event: • Threats to sustainability, reputation and stakeholder support: Georgetown University Corporate Crisis Communication

41. Impact on the Company – Short and Long-term: Georgetown University Corporate Crisis Communication

42. Additional Questions to Answer • Was the company taking the initiative? Was it on offense? • Was the company trying to change the focus? Change the debate? Rally its base? • What was the company’s main message? Or defense? • Did the company wrap its argument in a principle? Security, Safety, Privacy, Choice, Justice, Economy…? • Did the company apologize? If so, did it help? • What was the outcome? Was there life after the crisis? Did the torpedoed ship survive? • If you were CCO of JNJ in 1982, what would you have done differently? • If the Tylenol crisis happened in 2013, what would have impacted your CCO response today? • Could this positive outcome exist today? Would government regulators and the media allow J&J to go “unpunished?” • What are the lessons learned? Georgetown University Corporate Crisis Communication

43. Additional Questions to Answer • If you were CCO this company when the crisis occurred, what would you have done differently? • If this crisis happened today, what factors would have impacted your CCO response in 2014? • What are the lessons learned? Georgetown University Corporate Crisis Communication