11.15.05
ISSN:1528-3836
© 2005 Jonathan Bernstein
Circulation: 4,000+
Estimated Readership: 14,000+

• Just a Thought : About Mistakes

• Crisis Manager University : Is Your Company Ready?

• Crisis Manager Business Announcements : (Blatant Self-promotion)

• Plain English Disclosure

• About The Editor & Publisher

• Links

• Legal Disclaimer

• Other Important Stuff : Contact, Subscription, Reproduction, etc.

JUST A THOUGHT

To make a mistake is only human; to persist in a mistake is idiotic.

Cicero 106BC-43BC
Roman orator, politician and philosopher

CRISIS MANAGER UNIVERSITY

Editor's Note: This article first appeared as an Opinion piece at ECommerceTimes.com, and the author graciously gave me permission to reprint. I particularly appreciated a crisis management piece written from a CEO's perspective, something we don't see very often.

Crisis Management: Is Your Company Ready?
By Theodore F. di Stefano

Sound crisis management means being prepared for a possible disaster. If you are prepared, you'll be surprised at how smoothly you can work your way through it and, maybe, turn something that is negative into something that is positive for you and your company.

Inevitably, even the best companies do, from time-to-time, suffer a catastrophic event that can change not only the course of the company, but also its very survivability. Unfortunately, many companies do not have a Crisis Action Plan. This lack of a plan can have profoundly negative affects on the business when a disaster strikes.

Possible crises include fire, a harmful product or service, a financial crisis, service interruption of some kind, indictments against key personnel, an environmental incident, and labor unrest, especially a violent strike. The point is that these crises, though we all seek to avoid them, do occur, even to the most well-meaning companies and individuals. For this reason, a Crisis Action Plan is a must.

Some Plan Components

The following are some examples of subjects that could be addressed in your plan:

• Legal Issues
• Media Relations
• Employee Relations
• Customer Relations
• Financial Issues
• Lender Relations
• Shareholder Relations
• Supplier Relations

Immediate Response Is Critical The manner in which you handle the first day or two of an incident can have an enormous impact on your organization. Your Crisis Action Plan should have specific provisions detailing your short-term response, thereby eliminating the need to develop a response in the middle of a crisis. Here are some immediate responses that should be among those provisions:

• Immediately gather your senior management and fully describe to them the problem and how you intend to address it. Of course, it is an absolute must that you remain composed and project a calm, in-control image to your senior staff. Be sure to stress to them the importance of projecting a calm image to all involved, including your employees.
• Contact your attorneys and make them aware of exactly what is going on. Do not try to "sugar coat" the circumstances. They must know the full extent of the problem.
• Decide how you will communicate the problem to the public, your customers, suppliers, shareholders, and others. It is essential that you be proactive and communicate with all constituencies. It is absolutely critical for you to talk with the press. Your side of the story must be portrayed to them as well as everyone else involved.
• Contact other interested parties such as lenders, regulators, and organizations/associations that represent your industry. Again, be as clear and accurate as you possibly can be with the details. In some cases, your attorney will guide you through what and how much you should tell people.

Intermediate and Long-Term Response

The plan components that I mention above such as media relations, legal issues, etc., all have long-term as well as short-term elements. For example, your legal issues usually won't go away soon after the crisis erupts. In fact, they are more likely to be compounded and protracted as time goes on. Therefore, you must break your Crisis Action Plan down into time-sensitive components.

Show what has to be done in the short term. Then, taking the same elements from your short-term plan, draw up a similar list but with different actions that have to be taken over time.

For example, the legal issues component of your plan should include some things to address immediately such as which attorney you should call based upon what type of crisis you are planning for. The long-term component might have different scenarios as to what, if any, types of settlement you would agree to and the dollar amount for such settlements. Your attorney should be helpful in guiding you through this part of the plan.

How to Handle the Press

Not everyone is in agreement as to how inquiries from the press should be handled. Some, but not many, public relations firms suggest that you should have no contact with the press. They feel that anything you say to the press can only hurt you.

My feelings are quite different. Because I have owned so many companies in the past, the inevitable happened to me when one of my companies was faced with a crisis. Based on my experience, I am absolutely convinced that the only way to deal with the press is to deal with the press.

A "no comment" can only hurt your cause. It will be printed as such, and readers will inevitably think that you have something to hide. The press should be faced in a very proactive manner. All calls from the press should be either answered immediately, assuming that you have thoroughly thought out your answer, or delayed for a short period of time until you can respond in a way that will not hurt you or your company.

Also, it is absolutely essential that you be totally truthful when dealing with the press. A misstatement or an outright lie will only come back to haunt you. Certainly, depending on the circumstances, consult your attorney as to an answer that might have legal implications.

A close friend of mine is the CEO of a good-sized company. He has always avoided the press, no matter how innocuous their inquiries may be. It has hurt him and his company more than it has helped them. A reporter once wrote an article that contained a significant error in describing the stockholder base of one of his companies. Instead of talking to the reporter when she called, he refused to speak with her. Without the correct information, she wrote a totally inaccurate story.

You don't have to be like Donald Trump who is always courting the press. He is a master at using them and turning them and their stories to his advantage. On the other hand, don't avoid the press. Be proactive with them, and make sure that they hear your story and your facts about you and your company. They will at least be obliged to print some of what you tell them.

Sound crisis management means being prepared for a possible disaster. If you are prepared, you'll be surprised at how smoothly you can work your way through it and, maybe, turn something that is negative into something that is positive for you and your company.

Good Luck!

Theodore F. di Stefano is a founder and managing partner at Capital Source Partners, www.capitalsourcepartners.com, which deals in bringing small-cap companies public. He also is a frequent speaker on the subject of financial advice for small businesses as well as the IPO process. He can be contacted at Ted@capitalsourcepartners.com.

Editor's Note: Here's a few short items for you, thoughts that I'd squirreled away to include in an issue where space allowed.

Now That's Crisis Management

Unhappy that such a report could disrupt domestic industry, the Communist Party's Propaganda Department tightened controls on reports about food safety. The department said journalists would be "strictly punished" unless they check with authorities beforehand "to check facts and solicit opinions" about food safety issues, the South China Morning Post newspaper reported.

Editor's Note: Thank you to my associate Rick Kelly for calling out that tidbit from news coverage.

A Hidden Crisis

You may be in crisis and not even realize it. Your business is profitable, you might even be expanding, but you're actually losing money hand over fist and don't even know it - which certainly qualifies as a crisis.

This is YOU if you don't have any mechanism for determining why potential customers did NOT buy from you, "lost leads" who may have made initial inquiries and then disappeared. Smart companies conduct "lost lead surveys" to follow up with those individuals and learn if there is something that has to change in order to avoid losing more potential customers.

Another Hidden Crisis

Over the years, I have reviewed a number of proposals from consultants whose services complement mine or are in some way related to public relations, crisis management, etc.

Occasionally, sadly, their reputation and their bottom line were harmed by a simple inability or unwillingness to communicate in plain English. Some people seem to have an irresistible desire to use jargon and four-syllable words to show off their erudition (oops!). But no prospective client enjoys not understanding what they read. They expect those who provide service to them, whether private sector or governmental, to be able to explain themselves in language that someone NOT expert in their subject will understand.

Make it easy for your target audiences to understand you. If you have to use jargon, explain it. I can attest to the fact that making a sometimes-complicated subject easy to understand has been a critical factor in the success of my business. It can work for you, too. If you don't think your writing skills are up to it, then hire/retain someone who can help in that regard.

CRISIS MANAGER BUSINESS ANNOUNCEMENTS

Keeping The Wolves At Bay

Keeping the Wolves at Bay (available in print and PDF formats) remains, to my knowledge, the only commercially published media training manual in the world. It can be purchased at www.thecrisismanager.com, and its pages can be modified to make it YOUR "name brand" media training manual if you are an agency or organization that frequently conducts training. If the latter subject is of interest to you, write to: jonathan@bernsteincrisismanagement.com.

CD-ROM: Crisis Management & The Law
How PR Pros & Lawyers Can Work Together Effectively
Featuring Jonathan Bernstein, Richard Levick and Ed Novak

On February 23, 2005, Jonathan Bernstein played talk show host and expert commentator in a one-hour teleseminar featuring internationally renowned litigation PR expert Richard Levick and one of the country's top white collar crime attorneys, Ed Novak. This CD-ROM is a "must have" to play for the executive staff of any organization, for practice group meetings at law firms, or for the entire staff of any PR agency.

Go to www.thecrisismanager.com to read more details about and/or to order this CD-ROM, and to learn of other educational and training materials produced by Jonathan Bernstein.

PLAIN ENGLISH DISCLOSURE

Bernstein Crisis Management, Inc. has formal or informal co-promotional and mutually beneficial business associations with a number of the services we mention periodically in this newsletter. No, we can't go into details because that's confidential, proprietary, etc. But our relationship is NOT "arm's distance" and you should know that, since we regularly write about these services as we use them for crisis and issues management or other purposes. That said, you should also know that Bernstein Crisis Management sought the relationships because its staff is convinced that these services are the best of their kind for Bernstein Crisis Management's needs and those of its clients. If you have any questions about these relationships, please contact Jonathan Bernstein, (626) 825-3838.

ABOUT THE EDITOR & PUBLISHER

Jonathan Bernstein is president of Bernstein Crisis Management, Inc., www.bernsteincrisismanagement.com, a national crisis management public relations agency providing 24/7 access to crisis response professionals. The agency engages in the full spectrum of crisis management services: crisis prevention, response, planning & training. He has been in the public relations field since 1982, following five-year stints in both military intelligence and investigative reporting. Write to jonathan@bernsteincrisismanagement.com.

Bernstein Crisis Management, Inc. is located at 1013 Orange Avenue, Monrovia, CA 91016. Telephone: (626) 825-3838.

GUEST AUTHORS

GUEST AUTHORS are very welcome to submit material for "Crisis Manager." There is no fee paid, but most guest authors have reported receiving business inquiries as a result of appearing in this publication. Case histories, experience-based lessons, commentary on current news events and editorial opinion are all eligible for consideration. Submission is not a guarantee of acceptance.

LINKS

When I find a site that I think will be useful to my readers or site visitors, I put it on our Links page. If you have a site that would be of specific use to crisis managers and want to discuss a link exchange or other cooperative effort, please write to me, jonathan@bernsteincrisismanagement.com.

LEGAL DISCLAIMER

All information contained herein is obtained by Jonathan Bernstein from sources believed by Jonathan Bernstein to be accurate and reliable.

Because of the possibility of human and mechanical error as well as other factors, neither Jonathan Bernstein nor Bernstein Crisis Management is responsible for any errors or omissions. All information is provided "as is" without warranty of any kind. Bernstein Crisis Management and Jonathan Bernstein make no representations and disclaim all express, implied, and statutory warranties of any kind to the user and/or any third party including, without limitation, warranties as to accuracy, timeliness, completeness, merchantability, or fitness for any particular purpose.

Unless due to willful tortuous misconduct or gross negligence, Jonathan Bernstein and Bernstein Crisis Management shall have no liability in tort, contract, or otherwise (and as permitted by law, product liability), to the user and/or any third party.

Under no circumstance shall Bernstein Crisis Management or Jonathan Bernstein be liable to the user and/or any third party for any lost profits or lost opportunity, indirect, special, consequential, incidental, or punitive damages whatsoever, even if Bernstein Crisis Management or Jonathan Bernstein has been advised of the possibility of such damages.

A service of this newsletter is to provide news summaries and/or snippets to readers. In such instances articles and/or snippets will be reprinted as they are received from the originating party or as they are displayed on the originating website or in the original article. As we do not write the news, we merely point readers to it, under no circumstance shall Bernstein Crisis Management or Jonathan Bernstein be liable to the user and/or any third party for any lost profits or lost opportunity, indirect, special, consequential, incidental, or punitive damages whatsoever due to the distribution of said news articles or snippets that lead readers to a full article on a news service's website, even if Bernstein Crisis Management or Jonathan Bernstein has been advised of the possibility of such damages. Authors of the original news story and their publications shall be exclusively held liable. Any corrections to news stories are not mandatory and shall be printed at the discretion of the list moderator after evaluation on a case-by-case basis.

OTHER IMPORTANT STUFF

Do you know people who are Crisis Managers, whether they want to be or not? Please pass this newsletter on to them!

Articles in "Crisis Manager" were, unless otherwise noted, written and copyrighted by Jonathan Bernstein. Permission to reprint will often be granted for no charge. Write to jonathan@bernsteincrisismanagement.com.