Risk Managers: What's Your Plan for a Public Relations Crisis?

​Companies have no shortage of business risks to avoid, with the COVID-19 pandemic, a labor shortage and rising consumer costs all at the top of this year's management ticket.

One risk that may supersede them all, however, is damage to a company's reputation.

Case in point: According to a recent survey from Willis Towers Watson, 75.5 percent of the risk managers surveyed said their C-suite "was either somewhat or very committed or invested to managing reputational risk." Nearly 80 percent said their company would be more committed to brand protection in the next five years than it is right now.

Facing Down Reputational Risk: An Action Plan

If a public relations crisis does occur, companies need to address it quickly and decisively, before events spiral out of control and consume the company.

Corporate decision-makers looking for guidance on handling a public relations crisis can take these steps.

Brace for impact. In August, Delta Airlines announced it was going to charge employees an additional $200 per month for health insurance if they didn't get the COVID-19 vaccine.

Since Delta announced the vaccine-related insurance premiums, its stock price has fallen over 5 percent.

Feelings on COVID-19 vaccines run hot, so public relations experts say company leaders need to be prepared for the backlash if they insert the corporation's brand into a heated national health policy debate.

To address a controversial decision that could negatively impact a big consumer brand like Delta, be direct with the public, advised John Millen, managing partner at Millen Group, an employee benefits advisory firm in Richmond, Va.

"Act quickly and decisively," Millen said. "This may go against the instinct and guidance of hired consultants, but … own the issue and take the hit."

Delta did wind up keeping the insurance premium intact, but major media companies have pointed out the uphill climb companies face by getting directly involved with employee health decisions.

Reflect and collect before reacting. While quick and decisive action is important, try to gather as much information and as many facts as possible before reacting.

"Recklessness will make the situation worst," said Courtney Quigley, a reputational brand consultant with Rize Reviews, a brand management consultancy in Arlington, Texas. "Assign one spokesperson to avoid inconsistent messages or statements. Create a statement and distribute it to all employees. Also, be transparent with your employees on what is happening. Ensure they know how to react to the situation, and [advise them to] steer any inquiries to the assigned company spokesperson."

Build a brand management team that's ready to go. The primary goal of any executive in a crisis should be to limit the damage and control the problem.

"That's why it's important to have a communications team—whether in-house or contracted—[that] can handle media relations during a crisis while the executive leadership team works to end the problem as soon as possible," said Stephanie McCay, director of U.S. communications for PCL Construction, a construction company in Denver. "Media training is critical in the event your executive does have to address the media."

Get the cameras rolling. McCay also recommends conducting on-camera media training with executives, complete with interview questions, so leaders can practice delivering a statement under pressure. "At PCL Construction, we've traveled to offices across the country to provide crisis training and prepare managers to speak to the media in the event of a crisis. We believe that preparation is key."

Issue a holding statement. One of the most effective tactics a company can use to address a crisis quickly is to issue a holding statement to the press and public, McCay said. "A holding statement acknowledges the crisis without providing too many details. It can buy your team valuable time to gather information and plan your strategy."

Once you have the details, enact a three-pronged strategy. Maria Gonzalez, a senior partner at the Gonzberg Agency, an integrated-marketing agency in San Francisco, offers a three-step action plan when dealing with a brand reputation crisis:

1. Admit there is an issue. Gonzalez agrees with Millen that owning up to a big mistake is always good for a company looking to get ahead of the issue. "Even if the firm is not to blame, they need to get in front of the issue and show that the company has the integrity to take this on and not hide," she said. "If not all the facts are available, the statement needs to say so, along with the steps being taken to get those facts."
2. Explain how the company handled the situation. Show that company leaders are doing what is needed to re-establish credibility and confidence, Gonzalez advises. "Actions will speak louder than words," she said.
3. Lay out what leadership will do if the same situation, or a similar one, happens again. This move shows that, more than anything else, company leaders are taking the situation seriously.

"The media needs to get that statement ASAP," Gonzalez said. "Company decision-makers will also have to rely on the core message for other necessary communications," such as social media responses.

The Two-Decade Rule

Company leaders need to understand what's at stake when a crisis threatens to blow up a company's reputation.

"There's a quote from Warren Buffet that says, 'It takes 20 years to build a reputation and five minutes to ruin it.' If you think about that, you'll do things differently," McCay said. The longer a PR crisis is allowed to go unchecked, the more potential there is for irreparable damage to your company's reputation."

Brian O'Connell is a freelance writer based in Bucks County, Pa. A former Wall Street trader, he is the author of CNBC Creating Wealth (John Wiley & Sons, 2001) and The Career Survival Guide (McGraw-Hill, 2004).