Recent corporate scandals in 2017 have reinforced the importance of having a robust crisis management plan.
From United Airlines’ treatment of one of its passengers, to the behaviour of Uber’s CEO in one of his employees’ taxis, incidents involving high profile companies continue to damage and devalue corporate reputation.
In the last few days, Tesla has announced a major product recall of over 50,000 of its electric cars, and it remains to be seen if this issue could transform into a potential crisis for the company.
So far, Tesla has handled the situation well. Despite only 5% of cars being affected, a full product recall is taking place and a Tesla spokesperson made a statement very quickly, pointing out that the recall was a ‘technical’ rather than ‘safety’ concern to owners. Despite this, a well-managed issue can snowball into a full blown crisis with just one wrong move, so it will be interesting to see how the issue pans out.
Warren Buffet famously once said:
“Lose money and I will forgive you. Lose even a shred of reputation and I will be ruthless. … Wealth can always be recreated, but reputation takes a lifetime to build and often only a moment to destroy.”
What is clear is that reputational risk isn’t going away. This provides communications experts, PR agencies and corporate affairs firms alike with a tremendous opportunity to add significant value to clients by developing authentic crisis simulations.
But what are the key elements to an authentic crisis simulations?
Authentic ‘fake news’
Participants in the simulation need to feel like they are involved in a real crisis. Similar to the current media landscape, artificially generated ‘fake news’ should be a realistic as possible. For instance, if the company’s twitter feed is inundated with complaints, it should include believable logos, branding and layout. If they receive an email from a shareholder, it should look like a real email and be in the name of an actual shareholder. Finally, let’s say a negative news story is running about the company in the financial media, it should reflect the editorial style and tone of the publication.
Decisions that have consequences
During a crisis, every action has a reaction and an effective crisis simulation should convey this. Crisis scenarios should be planned out and have sufficient complexity so that every decision the participants make leads to a new scenario. For instance, the group should be faced with tough choices throughout the simulation (e.g. – to make a statement in the press or not, or align with an investigative/legal body) that directly affect the next stage. There should be different paths participants can take with varying implications. Participants should also be able to view the route they took at the end of the session.
Scenarios work best when they overlap a company issue, a wider industry issue, as well as a societal concern. Scenarios should be based on real facts and reports, as well as include key topics that Special Interest Groups and Non-Government Organisations (NGOs) are monitoring.
Trainers that can push
Finally, it’s vital that consultants running a simulation have an acute knowledge of the business, and aren’t afraid to push participants along the way. Much of crisis simulation is roleplay, and trainers must have the ability to adapt and evolve as the simulation develops. Although many crisis specialists are former journalists, they must also be comfortable at playing the part of multiple stakeholders – from customers, to the company CEO, to the receptionist!
A crisis simulation can provide huge value to multinational organisations. Rather like a flight simulator, it allows employees of companies to build experience of a crisis situation in a safe environment. The more bespoke and sophisticated the training programme, the more value it will add, and the more likely you will be able to protect your reputation.