What is Crisis Management and How to Recover from a Crisis

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Crisis management is the systematic approach an organization takes to an unexpected event, with the intent of minimizing any negative impact. Managing a crisis — whether it originates from a pandemic, natural disaster, data breach or other cause — requires having a coherent response plan in place, one that spells out how teams will coordinate their public-facing communications and actions.

Two people strategizing with documents

Public relations (PR) is a central component of crisis management. By creating a detailed plan for how public relations professionals should respond under pressure and on a tight timetable, organizations can minimize reputational and financial damage when a crisis occurs. The stakes for effective crisis management are very high, making such in-depth and ongoing planning critical to institutional survival.

The purpose and importance of crisis management

When an organization is confronted with a crisis, it must respond quickly yet carefully to avoid amplifying any damage already done or losing control of the narrative. The difference between a well-planned and impromptu response can translate to millions of dollars in sales, stock price fluctuations and/or earned media.

Overall, the primary goals of crisis management are to:

  • Communicate clearly and confidently with the public about the situation in question
  • Respond as accurately as possible, with assiduous fact-checking before going public
  • Relay any critical information about public health safety, e.g., related to a product recall
  • Reach audiences on the communications channel(s) they use, from email to social media
  • Shape and control the narrative to show an organization is acting in the public interest
  • Follow any crisis management plans in place, for maximum consistency across teams
  • Learn from incidents and use those lessons to anticipate and form plans for future events

Let’s look at some real examples of crisis management to see the difference between adept and suboptimal PR responses, the specific actions taken by crisis management teams and the concrete effects associated with each situation.

Effective crisis management: The Tylenol recall of 1982

This episode is the gold standard for swiftly and decisively handling a major PR crisis, and in turn rebuilding trust with the public. In 1982, seven people died after taking Tylenol capsules that had been contaminated with potassium cyanide. In response, Johnson & Johnson recalled more than 30 million bottles of Tylenol in the U.S. with a total retail value of $265 million in 2019 dollars. It also offered to exchange any existing capsules for solid tablets. Ultimately, it worked with the U.S. Food and Drug Administration to pioneer tamper-resistant packaging and caplets that became industry standards for safety, and Tylenol sales rebounded to normal within a year with some help from concurrent discounts.

Effective crisis management: American Red Cross and the accidental hashtag

Social media crises are a constant risk to organizations, as the velocity of communication and massive audience size on platforms like Facebook and Twitter mean that events can quickly spiral out of control without proper crisis management. However, the American Red Cross showed how these situations are navigable with the right plan. One of its social media managers accidentally posted content about drinking from a personal account to the firm’s Twitter page, including a memorable hashtag. A timely deletion, along with a humorous retraction message — “rest assured, the Red Cross is sober” — and resharing of the hashtag by the beer maker Dogfish Head resulted in a rise in donations.

Ineffective crisis management: The 2017 Equifax incident

The 2017 data breach of Equifax was one of the largest in history, compromising sensitive information about 170 million people. Although the initial incident was damaging enough, the subsequent response to it was also detrimental. The credit bureau struggled to communicate its actions to those affected and ultimately take responsibility to improve the situation. The website it set up for customers to check their status was quickly overwhelmed, and company leadership took a long time to make public statements about what had happened. The eventual FTC settlement was also an issue, as the promise of a one-time cash payment evaporated following higher than expected demand.

Between them, these four examples offer a representative cross-section of the types of crises organizations can face, ranging from product-specific problems (Tylenol) to one-time major incidents (Equifax) and social media snafus (Red Cross). In addition, there are a few other common types of crises worth examining.

A PR manager reviews emails during crisis response.

What other situations can cause a crisis?

PR crises, including the four above and many others, often stem from problems in one of more of the following categories.

Technological breakdowns

Have you ever visited a website or opened an app, only to find that it wasn’t available at that time? Such outages happen all the time, and they are as damaging to an organization’s public relations strategy as they are to its bottom line. According to IT research firm Gartner, downtime can cost thousands of dollars per minute. Additionally, it frustrates the public and seeds the perception of the organization as unreliable. Apologizing for an outage and keeping the public continuously updated on when service will resume is often a smart general strategy in such cases.

Recalls and product issues

When products aren’t safe to use or are utilized in unexpected (and unsafe) ways, all the ingredients are present for a PR crisis requiring a rapid response. Indeed, navigating a recall or similar product issue necessitates a precise combination of speed and tone. PR crisis management teams tasked with responding to these incidents often need to immediately take responsibility for any perceived errors by the organization. They should also exhibit an apologetic tone while describing the specific steps that will be taken to keep the public healthy and safe.

Personnel matters

An unexpected resignation or scandal is a common trigger for PR crises. For example, a story about a company executive shown to have ethical conflicts or to have engaged in illegal activities can generate multiple major media cycles that, left alone, can cause long-lasting reputational and financial damage. Issuing timely press releases and social media updates, among other actions, is critical for keeping the public informed about such fast-moving events and exerting control over the narrative surrounding them.

Natural disasters

A hurricane, snowstorm, earthquake, flash flood or other natural disaster will often necessitate PR crisis communications so the public knows how an organization is responding to the event. The possible responses here include everything from a school system announcing closures or alternate schedules due to heavy snow or rain, to a company describing the effects of a storm on its primary manufacturing and logistics facilities and what customers should expect in terms of resulting shipment delays.

Problems on social media and other comms channels

News spreads quickly on social media, such that the number of people who see a post can easily be in the millions before an organization’s official account even has a chance to respond. For this reason and others, it is important to have high-profile accounts professionally managed and to be careful about what types of content are posted to branded channels. In incidents like the Red Cross’s example discussed above, something meant for a personal profile can make its way into an organizational account, creating an instant problem. Engaging with commenters, for instance to answer a question about a current crisis the organization is involved in or help with a customer service inquiry, is also a key PR function when working with social media.

Financial difficulties

A decline in sales or donations can cost more than it initially seems, after accounting for all of the negative impact from the ensuing bad publicity. A company’s stock price might fall, or its brand become associated with financial stagnation and struggle. That leads to a damaging wave of bad PR that fuels even weaker financial results and in turn to additional PR woes, in a destructive cycle that can be difficult to control without a proper crisis management plan in place. Such cases show how PR crisis management isn’t simply about shaping perceptions and building relationships — it’s also preserving an organization’s long-term viability.

What does a good crisis management plan look like?

We have outlined some of the most common types of crises in PR, along with how a few firms have responded. Now let’s turn to what should go into a crisis
management plan. A crisis plan helps anticipate, respond to and minimize the damage tied to a PR crisis.

Although the exact details and structure of any plan will vary considerably from one organization to the next, the following components are essential:

1. A multi-member, multi-department team

PR crisis management is too big a task to fall only on one person or a single department. Crises affect the entire organization and as such require a team with a variety of expertise. Departments including PR, legal, HR and sales may be enlisted into acting upon the crisis management plan (CMP). This CMP should be regularly updated, ideally at least once a year, to reflect the most relevant and probable scenarios and how teams will tackle them.

2. A broad and realistic set of planned scenarios

It can be difficult to predict the exact shape and scope of a PR crisis, but it is still possible to map out some of the most likely events, including technical/IT difficulties, natural disasters and the other categories discussed earlier. It is a good idea to plan for as many scenarios as possible so that at least some protocols are set up and the crisis management team is not starting from scratch. These scenarios should be matched to specific response actions that have also been formulated in advance.

3. Pre-written modular responses and other documents

A well-designed CMP won’t leave PR professionals needing to come up with everything on the fly in the hectic moments after a crisis emerges. Instead, it will include pre-written modular components that can be matched to scenarios as needed in appropriate instances. For example, a press release might be pre-drafted to discuss the evacuation of a company facility. Some incidental details like time, place and specific cause of the event can be filled in later, but overall the idea is that the modular components can be pulled right off the metaphorical shelf when a crisis hits.

4. Integrated risk management

This component goes hand in hand with the pre-written documentation and scenario planning. A risk management assessment will involve identifying an organization’s biggest vulnerabilities (e.g., outdated tech infrastructure, lingering reputational issues that could be reignited, etc.) and describing actions to mitigate them. Learning from past crises and the experiences of other similar organizations leads to better risk management.

5. A definitive, agreed-upon chain of command

Who will run point during a crisis? Having a clear answer to this question is essential for avoiding confusion and additional problems during crisis response. No organization wants the public to hear conflicting messages from its spokespeople and leadership, which can turn into a crisis on its own. Make sure that the CMP designates who will deliver official communications and through which channels those messages will be delivered.

6. A multi-channel response

PR crisis management has moved beyond simply issuing a press release. A multichannel and multicultural response is critical to reach as many people as possible on the channels they use, whether that is social media, print, TV, email or something else. Management of social media response in particular is important, due to the fast-moving nature of the platforms and the risks involved.

7. Ongoing training and reevaluation

A CMP won’t be set in stone, even if many of its components will prove to be durable parts of the crisis management strategy over the long term. Crisis management teams should be continually trained on the latest best practices and on any revisions to the CMP itself. As mentioned earlier, it is worth regularly revisiting the CMP to make sure that it still covers relevant scenarios, contains clear details on who will perform which tasks and includes modular components that can be matched to scenarios.

What Does Someone in Crisis Management Do?

On the PR side, someone specializing in crisis management will perform many of the same functions as a PR specialist or manager. Indeed, either of those job specs may include core components related to managing crisis situations.

The U.S. Bureau of Labor Statistics has outlined the following general responsibilities for a PR specialist:

  • Creating press releases and other official communications for distribution
  • Helping clients strategize about how they will interact with the public
  • Tracking opinion and sentiment on social media channels
  • Identifying opportunities to work with advertising and marketing agencies or departments
  • Managing the overall image and identity of the organization

These activities can all be done within the context of a crisis. PR professionals should have the ability to translate their general skills as writers, communicators and collaborators to the unique pressures of managing crisis situations, ranging from a social media backlash to a bad customer service experience to a sudden outage in the organization’s IT services.

The prospects for PR specialists are relatively good for the near future. The BLS expects 6% growth in employment from 2018 to 2028, which is about as fast as average for all occupations. In 2019, PR specialists earned an annual median pay of $61,150.

PR managers perform many of the same tasks as PR specialists, only at a more senior level. For instance, they may be responsible for creating a CMP, selecting members of the crisis response team and leading crisis-related training. In addition to those responsibilities, they may also write key documents like press releases and advise on how to communicate with the public.

PR managers were expected to see 8% employment growth from 2018 to 2028. Their median annual compensation is much higher than PR specialists, at $116,180.

Earning an online Master’s in Strategic Public Relations from the George Washington University can prepare you for a career in PR crisis management. Learn more by visiting our main program page today.

Recommended Readings:
Overcoming PR Crises: 3 Examples
PR and Crisis Response

Harvard Business Review | A Bad Reputation Costs a Company At Least 10% More Per Hire
PBS | How the Tylenol Murders of 1982 Changed the Way we Consume Medication
The New York Times | Tylenol Made a Hero of Johnson & Johnson: The Recall That Started Them All
Federal Trade Commission | Equifax Data Breach Settlement
Alva | How to Measure the Cost of a Bad Reputation?
The 20 | The Cost of IT Downtime
Bureau of Labor Statistics | Public Relations Specialists
Bureau of Labor Statistics | Public Relations and Fundraising Managers