Crisis management is an essential organizational function. Most businesses, at some point, will face a crisis, and failure to respond can cause serious harm to the company’s bottom line, stakeholders and public image.
As an L&D or HR leader, you’re likely to be responsible for training the people who deliver crisis communication when it counts: the crisis team and the spokesperson who faces the cameras.
In the age of social media and the internet, news goes viral almost instantly, so your organization needs to respond to PR crises quickly and effectively to minimise damage.
According to a 2023 Capterra survey of U.S. business leaders, fewer than half (49%) have a formal, documented crisis communications plan.
In this article, we’ve outlined the best practices, case studies and resources you can use to prepare your crisis team and spokesperson before a crisis hits.
Best Practices for Crisis Management and Communication webinar, with John Bailey, Senior Vice President of GoCrisis.
What is Crisis Management?
“The actions that are taken to deal with an emergency or difficult situation in an organized way” – Cambridge Dictionary
For the purpose of this article, we’re defining a crisis as a significant threat to operations that can have negative consequences if not handled properly. In crisis management, the threat is the potential damage a crisis can inflict on an organization, its stakeholders and reputation. A crisis can create three related threats: Public safety, financial loss, or reputation loss.
Severe crises, such as industrial accidents, can result in injuries and even loss of lives. Crises often create a financial loss by reducing purchase intentions, disrupting operations and possible lawsuits or pay outs – and all crises can tarnish an organization’s reputation.
A 2020 Oxford Metrica and PwC event study of major corporate crises at publicly listed companies found that companies which responded slowly or poorly lost around 15% of their share value over the following year, while those that responded well added roughly 10%, with management responsiveness cited as the deciding factor.
Effective crisis management handles the three threats successively. The primary concern in a crisis has to be public safety, as a failure to address this intensifies the damage from a crisis. Reputation and financial concerns are considered after public safety has been confirmed.
Ultimately, crisis management is designed to protect an organization and its stakeholders from threats and reduce the impact felt by these threats.
Crisis management can be divided into three phases:
- Pre-crisis: prevention, preparation, and training
- Crisis response: management response to a crisis
- Post-crisis: Ways to better prepare for the next crisis and fulfilling commitments made during the crisis phase.
The Role of Social Media
The biggest change for crisis management is the revolution of social media. During a crisis, it’s a threat to organizations as it allows the public to spread information much faster and to a wider audience. The public can voice their opinions, propagate rumours and experiences in a highly visible manner.
Edelman’s 2024 Connected Crisis Study found that 8 in 10 communications and marketing executives worry about AI-driven misinformation, and fewer than half feel prepared to manage it.
All Stories Are Now Global
There’s no such thing as a local crisis if you’re an international brand. Thanks to the internet and social media, a crisis in one market will become news at some point in others. Be prepared to address the crisis in all markets.
A single approach to social media won’t work. Media, customs and cultures vary in different market, and what works in one may intensify the problem in another.
Pre-Crisis Phase
Prevention involves seeking to reduce known risks that could lead to a crisis. This is part of an organization’s risk management program.
Preparation involves creating a crisis management plan, selecting and training a crisis management team; conducting exercises to test the crisis management plan, and drafting crisis management messages and templates for statements.
How to Create a Crisis Communication Plan (Step by Step)
Use these seven steps as your working outline. We’ll take a look at each step in more detail below.
- Understand your key stakeholders
- Assemble and train a crisis team, then let them practice making decisions.
- Write the crisis management plan (CMP) as a reference tool.
- Choose the communication channels you will use during a crisis.
- Pre-draft message templates for likely incidents.
- Train your spokesperson to handle the media under pressure.
- Test and update the plan at least annually.
The Importance of Preparation and Planning
Communication is crucial during a crisis. If you don’t prepare for different crises and how to communicate during them, you’ll likely incur more damage to the business. Building this readiness ahead of time through a communication skills training library like VirtualSpeech’s means your people practice before the pressure is real.
Internal and external communications planning is critical. Without it, your organization’s response to a crisis will be disjointed and disorganized, meaning that:
Stakeholders won’t know what’s happening and quickly become confused or angry, the organization will receive reputational damage and possibly be seen as criminally negligent, the amount of time required to find a resolution to the issue will be extended; and the impact to your business’s financial bottom line will be more severe.
In short? Crisis preparation and planning is a non-negotiable.
Understanding Your Key Stakeholders
Understanding the audiences that a business needs to reach during an emergency is one of the first steps in the development of a crisis communications plan. There are many potential audiences that will want information during and following an incident, and each has its own needs for information.
Potential stakeholders include:
- Customers and clients
- Survivors impacted by the incident and their families
- Employees and their families
- News media
- The local community
- Company management and directors
- Investors and shareholders
- Board members
- Government organizations and regulators
- Suppliers
- The general public
Once you have your groups listed out, identify the owners of each of these relationships. Map these out with your team and form a central communications office, which is in charge of managing the information flow. Ready.gov recommends this approach in its guidance on crisis communications plans. The central communications office takes inquiries from customers, suppliers, the news media and others, and should be properly equipped and staffed by people ready to answer requests for information.
Crisis Management Plan
A crisis management plan (CMP) is a reference tool, not a blueprint. A CMP provides lists of key contact information, reminders of what typically should be done in a crisis, and forms to be used to document the crisis response. A CMP is not a step-by-step guide for managing a crisis. A CMP saves time during a crisis by pre-assigning some tasks, pre-collecting some information, and serving as a reference source.
Crisis Management Team
Usually, a crisis team will consist of these members: public relations; legal; security; operations; finance; human resources. However, it’s important to note that the composition will differ based on the nature of the crisis. For instance, your IT department would need to be involved if the crisis involved a hack of a company database.
Training is needed so that team members can practice making decisions in a crisis situation. Each crisis is unique, demanding that crisis teams make decisions – and practice improves a crisis team’s decision making and related task performance.
L&D teams can build custom crisis scenarios with VirtualSpeech and assign them for the team to practice before a real event, helping them be prepared and build muscle memory in the event that a crisis should really occur.
When building crisis-related training, you should also consider covering how to manage the PR aspect of a potential crisis, planning and implementing PR strategies, to releasing statements to the media, and communicating with the local community.
Spokesperson Training
Ideally, your spokespersons are trained and have practised media relations skills before any crisis. As an L&D team, your role is to give them scalable, repeatable practice so those skills are ready when it counts. Spokespeople and crisis-team members can rehearse media interviews and high-pressure Q&A repeatedly through AI-powered roleplay practice with instant feedback, so their skills hold up under pressure.
The focus during a crisis should then be on the key information to be delivered rather than how to handle the media. Your chosen spokespersons must have the right communication skills, a senior enough position to carry weight, and the right training, which might include personal media training or coaching.
Communication Channels
Company Website
Your organization’s website is a means for you to present your side of the story, and not using it creates a risk of losing how the crisis story is told.
Organizations can create a separate website for the crisis, or designate a section of their existing website for the crisis. It’s worth designing such a section before a crisis, anticipating the type of information it should contain, so that it can be quickly activated should a crisis occur.
This type of site is called a dark site. Given the extreme time pressure inherent to crisis management, there’s usually no time to construct a new website from scratch so instead, this prebuilt dark site can be quickly turned on as and when it’s needed.
Social Media vs. Traditional Means of Communication
People tend to think about social media when it comes to crisis communications, and while social media is an important channel for crisis communication, only sharing to social media isn’t enough.
Social media is a strong crisis communications tool when you need to reach a large group of people or communicate quickly and briefly, but if the goal is to communicate and connect with your stakeholders in a way that is personal, then interviews can also be impactful by highlighting the faces behind the “faceless” organization. And if you need more depth than a single social media post can offer, a full press release or statement might be appropriate.
Of course, it’s also worth remembering that private communication with board members or major shareholders will also need to take a different form.
How to Identify the Appropriate Communications Channels
With those factors in mind, you should sit down with leadership and the heads of each department and answer:
- Which key stakeholders do we need to communicate with directly?
- What is the best way to communicate with them directly?
- Do we have legal obligations to notify any stakeholders in a particular way?
- Which channels do we engage our stakeholders on regularly?
- What apps, platforms and technology do our stakeholders use daily that may present a unique means of communicating with them?
Answering these questions honestly will help you build out a crisis communication plan that actually speaks to your key stakeholders.
Crisis Response
The crisis response is what management does and says after the crisis occurs. Public relations plays a critical role by helping to develop the messages that are sent to various people and organizations.
Initial Response to the Crisis
The initial crisis response should focus on three points: be quick, be accurate, be consistent.
First, provide an early response, aiming to provide get something out within the first hour after the crisis occurs. This timeline puts a lot of pressure on crisis managers to have a message ready in a short period of time, but it’s critically important. An MIT study found that on Twitter/X, false news reached 1,500 people around six times faster than the truth, which is why a fast, accurate first response matters.
The news media will attempt to fill the information vacuum and be a key source of initial crisis information. If your organization does not speak to the media, other people will, and they may have inaccurate information or try to use the crisis to attack the organization. An early response may not have much new information, but the organization positions itself as a source and begins to present its side of the story.
Secondly, be accurate. People want accurate information about what happened and how that event might affect them. If mistakes are made or incorrect information is shared, it should be corrected as soon as possible. Internally, the crisis team needs to share information so that everyone can convey a consistent message and not provide mixed signals to stakeholders.
Third, be consistent across different communication platforms. Websites, social media, internal communications to employees, and press releases add to the media coverage and help to provide a quick response, so it’s important to remain consistent across the different platforms, as confusion will only make the situation worse.
Reputation Repair Strategies
Crisis managers need to assess the reputational threat to the organization and determine the type of crisis being faced, as this will determine the company’s responsibility and response.
- Victim crises (minimal responsibility): natural disasters, rumours, workplace violence.
- Accident crises (some responsibility): challenges, technical-error accidents, technical-error product harm.
- Preventable crises (strong responsibility): human-error accidents, human-error product harm, organizational misdeed
Preventable crises naturally result in more reputational damage, and therefore need a different approach to reputation repair (such as apologies and financial compensation to those affected) than a victim crisis, for instance.
Post-Crisis Phase
In the post-crisis phase, the organization is returning to business as usual. The crisis is no longer the focal point of management’s attention but still requires some attention.
Important follow-up communication is required: crisis managers often promise to provide additional information during the crisis phase and must deliver on those promises; the organization needs to release updates on the recovery process, corrective actions, and investigations. Intranets are an excellent way to keep employees updated.
Acting on the Lessons Learnt
Crisis managers agree that a crisis should be a learning experience. The crisis management effort needs to be evaluated to see what is working and what needs improvement. The same holds true for exercises. The organization should seek ways to improve prevention, preparation, and the response.
Case Studies and Examples
PepsiCo’s Can Tampering Rumours (1993)
A famous case study when it comes to crisis PR, Pepsi was involved in a strange backlash where a syringe was allegedly found in a drink in Washington. The following week there were over 50 reports of Diet Pepsi tampering, which all turned out to be a hoax.
Pepsi managed to work with the FDA, which was satisfied that the story was fabricated, staunchly denying any accusations. In response, Pepsi produced four videos throughout the crisis to gain people’s trust of the canning process, and CEO Craig Weatherup appeared on news channels armed with evidence of bogus reports.
Sales did fall by two per cent, but Pepsi’s aggressive defence was vital and proved a much better tactic than staying silent.
Germanwings Disaster (2015)
The story of a Germanwings (owned by Lufthansa) plane crashing into the French Alps was everywhere in 2015. The event was not caused by corporate negligence, but a deliberate crash by pilot Andreas Lubitz.
A media spotlight was cast onto the airline and people demanded answers. CEO of Lufthansa, Carsten Spohr, was an immediate and compelling spokesperson, vowing to ensure pilots are fully checked in all aspects of health and delivered his sentiments to all families involved.
Spohr was quoted as saying “Safety in aviation is no given” and PR experts applauded Lufthansa’s crisis communications approach
Toyota’s Recall Fiasco (2010)
Toyota recalled a total of 8.8 million vehicles for safety defects, including a problem where the car’s accelerator would jam, which caused multiple deaths. Toyota initially couldn’t figure out the exact problem, but it sent out PR teams to try and stop the media backlash anyway.
The upper management was invisible in the early stages of the crisis, skewing public perception further against the company. Toyota’s response was slow, with devastating results. PR specialists analyzing Toyota’s response outlined what they should’ve done differently.
But it served as a wake-up call for the company, which turned it around in the months following the debacle. The company offered extended warranties and pumped up marketing, drawing on its long-term track record and reassuring consumers about safety.
Johnson & Johnson’s Cyanide-Laced Tylenol Capsules (1982)
Seven people died after taking extra-strength Tylenol capsules that had been laced with potassium cyanide.
The company put customer safety first. It quickly pulled 31 million bottles of Tylenol ($100 million worth) off the shelves and stopped all production and advertising of the product.
It also got involved with the Chicago Police, FBI, and FDA in the search for the killer, and offered up a $100,000 reward. Post-crisis, the company reintroduced Tylenol with new tamper-resistant packaging and $2.50-off coupons.
Tylenol’s response to the tragic 1982 Chicago murders is regarded as one of the most successful sequences of crisis management in history.
Crisis Management Checklist
Forbes provide a list of useful rules for crisis management, and we’ve picked out the ones we think every crisis response team needs to know below.
- Take responsibility. Don’t try to cover up the crisis; manage it by taking responsibility, reacting immediately, and responding to feedback.
- Be proactive, transparent and accountable. Acknowledge the incident, accept responsibility, and apologise.
- Be ready for social media backlash. Don’t ignore the possibility of backlash; customers will vent on those platforms when something goes wrong.
- Remember to be human. Say you’re deeply saddened by what happened and will work on making things better, then share how policies will change.
- First apologise, then take action. Following a public apology, offer a call to action to show you are changing your ways.
- Monitor, plan and communicate. Have your social team on high alert; if they notice spikes of negativity, use the crisis plan to respond with prepared materials.
- Seek first to understand the situation. Communicate relevant details to key stakeholders and never reply with “no comment”.
- Be prepared. Anticipate potential crisis scenarios and establish internal protocols for handling them.
Conclusion
We’ve identified best practices, case studies and useful resources for crisis management teams. While crises begin as a threat, effective crisis management can minimise the damage and in some cases allow an organization to emerge stronger than before the crisis.
No organization is immune from a crisis, so all must do their best to prepare for one. This article provides a number of ideas that can be incorporated into an effective crisis communication plan.
Want to prepare your crisis team and spokesperson before the pressure is real? Speak to our team and find out how VirtualSpeech can prepare your team for intense communication moments.
