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Taking Charge: The Role Of A CEO In Crisis Management

Personal investment in crisis management by the CEO sends a strong signal to employees, customers, and shareholders.

crisis managementIt’s 9 p.m. – You’re a CEO, and you just sat down to catch up on the evening news when you get a call from your PR counsel. A video of your employee abusing a customer is on the Internet, and the number of clicks is rising. What do you do now?

The breakdown of the traditional news industry and the proliferation of social media have transformed the way Americans get our information. For news, an increasing number of us rely upon Twitter and Facebook, platforms that provide graphic impressions that can be circulated on line, easily and while leaders of the pre-digital age had the luxury of time to gather all of the facts and formulate a plan – those of today do not.

Who can forget the abominable video of the United Airlines passenger being violently removed from a flight? Within 24 hours that video was viewed more than 100 million times on Twitter, and within 48 hours another 210 million views were logged on China’s microblogging site, Weibo.

Whether you uncover a cyber-security breach, learn of a government investigation, discover sexual harassment, or see a troubling video, the enemy remains the same – time. According to a survey by Deloitte, nearly 90 percent of executives say that damage to the reputation is the most important risk they face.

“The foundation of a solid crisis management plan is transparency, authenticity, and accountability.”

So, when it comes to the reputation of a company, what is the role of a CEO?  Depending upon the crisis, the response is more effective when the CEO is visible, caring, and engaged.  Personal investment by the most powerful individual in the company sends a strong signal to employees, customers, and shareholders.

The foundation of a solid crisis management plan is transparency, authenticity, and accountability.

There are several steps CEOs may take in a crisis to help preserve shareholder confidence, mitigate brand damage, and ultimately preserve the bottom line:

Know when to step out publicly: The CEO shouldn’t be front and center on every crisis event. If another member of the corporation is designated to speak, that person must be trained nd ready to respond to issues that have been identified as high risk.

However, there are a factors that should trigger a response from a CEO, including when:

  • Many employees are impacted
  • There is litigation or disruption that causes the stock price to plummet
  • Excessive coverage in the media results in loss of confidence among shareholders or customers
  • Government scrutiny requires disclosure in regulatory filings.

Ask the right questions: what is the mission of my company, and am I acting accordingly? This may sound trite, but the mission statement actually provides a moral guidepost.

The first response matters. Whatever information is shared must be accompanied by clear steps to address the situation, and if possible, a timeline for further decision. If an apology is warranted, it is effective only if it’s honest.

Separate emotion from fact. However confident you may be within your leadership team, always look at evidence with a dispassionate eye.

Beware of social media. We live in a world of citizen journalism with ready-made platforms for instant sharing. Ensure that your leadership team keeps a pulse on the digital brand and is able to gauge spikes in negative sentiment.

PR and legal counsel should work together. Collaboration promotes success in both the court of law AND in the court of public opinion.

Finally, learn from the mistakes of others. Study the crisis response of other corporations to gain insight about what works —  and what doesn’t. Prepare, practice, and revisit your crisis communications plan. While print and television still carry greater weight, social media accelerate any crisis situation.

Every company needs a plan in place so that its management team can respond to a crisis quickly and effectively, and if the protocol is clear, assertive, and competent, then our CEO can invoke the plan and, with peace of mind, go back to monitoring the evening news.


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