The Business Insurance Plan You May Be Missing
The reputation of an organization or business is its very lifeblood. In fact, sixty-percent of CEOs would estimate more than forty-percent of their company’s market capitalization has direct ties to brand reputation, according to a survey released jointly by Fleishman-Hillard public relations and the World Economic Forum.
That reputation is always at stake. Whether it’s a customer’s interaction with a grumpy sales associate or a catastrophic workplace event, how an organization responds and communicates is vitally important to its survival.
Crisis communication plans help companies prepare for the unplanned catastrophe which could result in “sudden death” if handled incorrectly.
What is it?
Crisis communications plans identify as many business threats and weaknesses as possible. They also look at who may be impacted and address how to communicate with various stakeholders, customers and media during a crisis. The plan should be complementary to an organization’s emergency operation plan which serves as an operational guide in the midst of a calamity.
Why have one?
Warren Buffett once said “If you lose dollars for the firm by bad decisions, I will be understanding, (but) if you lose reputation for the firm, I will be ruthless.”
CEOs agree that a company’s reputation has a direct correlation to sales, attracting talented employees and increasing credibility in times of crisis.
If reputation equity is that important, then a recent report by Oxford Metrica should serve as a wake-up call. According to the report, within the next five years, more than 80-percent of companies will face a reputation crisis that could diminish share prices by 20- to 30-percent.
Just as you can’t predict natural catastrophes, terrorist events or employee misconduct, you can’t control when vicious attacks threaten to take your company down in 140 character strokes, or less. A vile “tweet” has the potential to explode on Twitter, slandering your previously good name – and you never saw it coming.
A delayed response can have devastating effects, as silence is almost always interpreted negatively by the public. A response of “no comment” or asking your lawyer to manage public questions may seem like a good idea while you sort out the mess internally, but doing so may cause more damage than good.
Acknowledgement from an internal, informed spokesperson is a positive voice for the organization. People want to know you care, and are intimately involved.
Having a plan not only means key information, templates and communiqués are in place, but that you are poised to take control of the situation and demonstrate strong leadership.
How to get one
If you do not have a crisis communication plan in place, start with organizing a crisis communication team. The team usually includes representation from the CEO, public relations, key department heads, security, and legal in an effort to gain a holistic view of the company and identify critical threats and weaknesses. Companies often hire communication consultants to help guide them through the process to gain an outside perspective and ensure no stone is unturned.
Together, this team will identify a spokesperson, develop internal and external communication plans and draft templates for various forms of communication.
Like any good insurance policy, a crisis communication plan should be tested with drills and reviewed at least once per year to ensure it is up to date and any new threats and communication tools are identified.
Risk can’t be predicted, but communication can be planned. Crisis communication plans offer a jump-start in the process, enabling a speedy response that may reduce the negative impact to your bottom line. Like any insurance coverage, its value is only known when tested, but operating without it means you may risk losing everything.