Corporate crisis? Call the PR firm

09 Dec,2011

 

By Johnson Napier

 

(With inputs by Tuhina Anand)

 

Murphy’s Law states, “If anything can go wrong, it will.” And adversity has a way of striking when least expected. From individuals to small establishments to large corporate houses and even celebrities, many have been at the receiving end of the turmoil unleashed when bad times arrive. Often it is expected that the individual will pull themselves out of the crisis, but not many are successful in fighting their way out of the mess as well as later avoiding being consumed by the negative aftermath.

 

Ajay Sharma

Enter public relations. Crisis PR, to be precise. From being a dormant activity within an agency and playing minnows to their bigger counterparts, crisis PR today is emerging as a critical and strategically important unit for most agencies. Such is the need for handling crisis situations that a few big players have gone ahead and launched separate divisions to handle crisis-related affairs. Recent examples include Hanmer MSL that went ahead and launched Crisis Network last month while Ad Factors already has Crisis 24×7 that has been functional for a couple of years and more. According to Ajay Sharma, Managing Partner, Ketchum Sampark, it would be fair to say that 15-20 per cent of the time spent on PR programs for across the industry would be dedicated to crisis. When analaysed in numbers, this would easily mean revenue in excess of Rs 100 crores given that the size of the organized industry is around Rs 500-600 crores.

 

What is important to understand here is that PR should not be brought in after a crisis hits. In fact, given today’s media speed and its impact it is prudent to have a robust PR edge at all times. Take the case of Cafe Coffee Day or CCD as it popularly called which was embroiled in a sudden crisis when a customer complained of service at one of its outlets on a social media platform. Now it’s a case study on how CCD handled this criticism. K Ramakrishnan, President Marketing, Cafe Coffee Day, emphasized, “I believe that you can’t just wake up one day when crisis strikes and get your PR machinery active. There should be a consistent conversation with all medium of influence and media and not just when tough situation arises. It should not be crisis PR but consistent PR and if a situation arises it’s better to come clean. Anybody can make mistakes but its important to accept the mistake, correct it and try not to repeat it.” CCD has been using the social media effectively to listen, nurture and even co-create with its consumers.

 

While the origins of crisis PR could be traced not only to corporate misconduct or accidents or natural disasters as it used to be, increasing conflicts with different pressure groups, rising customer activism, customer fraud and regulatory changes among others are some of the frequent causes of crisis for most organizations today. A quick dive into history and we won’t be surprised as to why crisis PR has emerged to be what it is today. Imagine Nira Radia walking unscathed for a long time when major telecom players and a few famous personalities were being hauled up for their role in the alleged 2G scam or Vijay Mallya going about his everyday chores with the same flair and exuberance despite Kingfisher Airlines, seeing red or even the case of telecom operator Vodafone attracting more subscriber base despite facing on online backlash for wrongly promoting its 3G services a few months ago… Even celebrities – who come under flak more often than not, often emerge victorious after a few days of bashing by the media et al (Shiney Ahuja being the most classic example of them all).

 

“Crisis PR is a super specialised function that needs a certain attitude of being able to partner with clients during such demanding situations. It is a combination of expertise, experience and above all a dependable team that can make good on its advice and planning. The agency believes that the testing time of a crisis is the best time to showcase the agency’s capabilities, reach out and stand by the client at the crucial time. A well managed crisis situation will go a long way in forging relationships and improve the agency’s acceptability and utility amongst the clients at the top level which is relatively lower in routine times” said Venkatesh Somayaji, who heads Crisis 24X7, a specialist crisis communications unit of Adfactors PR.

 

Asserted Ajay Sharma, “Anticipating the kinds of crisis that an individual or an organization may face, given the nature of the industry and the specific stakeholders/issues, crisis is an important part of planning for any client PR program. At Ketchum Sampark, we believe that Reputation Risk Management is as important as building reputations. Crisis communication if not handled effectively can ruin years of good work put into building reputations.”

 

According to him, to meet up to the challenges organisations of today now work towards putting in a) crisis preparedness training among key managers at the head office and location levels b) crisis scenarios planning c) internal systems and processes to get early warning signs for crisis and d) proactive communication with media and other constituents to reduce speculation and any snowball impact.

 

Varghese M Thomas, Director – Corporate Communications – India & SAARC, Research In Motion India Pvt. Ltd in fact goes to say that crisis communications is probably the most challenging part of this role and it keeps the adrenalin pumping, brings all your training and knowledge to the fore (sometimes exposing embarrassing gaps in your capabilities!) and has the ability to save businesses and reputations. He said, “As a professional, when you think of creating an impact, there is nothing like a crisis to test your mettle. But this is something we pray, that it doesn’t happen too frequently. There is always some learnings from such situations, it is important to keep your ears and eyes open to feedback and more importantly to ensure you learn from the past mistakes.”

 

When asked on the need for his agency to float a new vertical for crisis management, Jaideep Shergill, CEO, Hanmer MSL said, “We’ve only now started calling it by a separate name. Actually we have been doing it for a long time. The reason we have decided to package it and launch it like this is because we see that the world is changing very quickly and crisis and issues is becoming an integral part of people’s and companies lives and futures. 10-15 years ago nobody cared as such when a crisis broke out as there was no social media – digital was largely undeveloped. So something would happen in the US and we in India wouldn’t know about it until later. But today the rate at which it spirals is a matter of concern.”

 

Pascal Beucler

Citing the emergence of digital and lack of trust as the core reasons for the surge in crisis PR, Mr Shergill remarked, “People don’t trust companies as much as they used to. So when there is a lack of trust, an issue or crisis can become much bigger.” According to Pascal Beucler, SVP & Chief Strategy Officer, MSL Group said that “it is mostly as a consequence of the Social Media revolution, I believe, as this is where it all starts, and spreads very fast. In recent cases we could see in Europe, it took only hours for a crisis to go mainstream media after having emerged on a blog or on a forum.” Echoing Mr Beucler’s sentiments, Ajay Sharma remarked, “An important factor is also the rapid growth of media, especially electronic and internet that picks up such issues more quickly than ever before and then transmits it across wider audiences almost in real time, creating a snowball impact. Such rapid transmission of news means that organizations frequently risk losing control of the opportunity to present the true picture and avoid any speculation.”

 

On claims that doing PR in crisis situations could also mean hiding the wrongs of the client in concern, Mr Sharma replied, “No extent of crisis PR can defend the guilty, but effective crisis PR can certainly help an organization’s reputation not being damned as guilty even before it has a chance to state its side of the story.” Mr Shergill retorts that the best thing one can do is have a point of view. “If there is a negative sentiment floating around a company, it’s their job and that of the PR agency to correct that and give the right perspective or message. But that doesn’t mean that media or people can be gagged or stopped from writing; I don’t think that should be the approach.”

 

And what about claims that agencies inflate their budgets to get the client out of their miseries? After all, a client would go the distance in splurging huge sums to be portrayed in a positive light or risk being shunned by the market and media. Says Mr Shergill, “I wouldn’t say that clients are over-charged; it’s just that we charge them the right amount of money. What happens is that because it’s a crisis, the PR agencies and clients are willing to invest more time in more people and more money because they have to make it work. I am not saying that they would be overcharged but that you will have to spend a certain amount of money or resources or people to make the crisis work in your favour.” Presenting a more scientific stance, Mr Sharma states, “Crisis PR needs resources with substantial experience in issues or crisis on hand, some of them even outsourced for the duration of the crisis. Costs of managing a crisis are significantly higher and hence the outlays on a crisis PR program are higher than usual client engagements.”

 

On the future for crisis PR in India, Somayaji of Crisis 24×7 explained that Crisis PR is emerging as a strategic tool for clients to safeguard from uncertainties that are routine as well as unexpected and ward off actions of competitive forces. It is also gaining acceptance for providing competitive edge by bringing ability to address issues more effectively. “Eventually we foresee Crisis PR to become a critical partner to clients,” he concluded.

 

What is clear is that crisis is no longer the prerogative of only the client – the victim of a circumstance. It’s now become the mandate for PR agencies to step into the shoes of the clients and do everything to rid them of their miseries. So what if a few egos are hurt and questions are raised on the ethics of the approach? So long as the damage is being plugged.

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One response to “Corporate crisis? Call the PR firm”

  1. S Kumar says:

    Good!