CRISIS COMMUNICATIONS: NINE GUIDING PRINCIPLES FOR THE FOODSERVICE

INDUSTRY’

FABIA D’ARIENZO’

and

WAYNE L. PINES

Received for Publication August 9, 1999 Accepted for Publication September 14, 1999

INTRODUCTION

The New Webster’s Dictionary aptly defines the word crisis as “the decisive moment” or “the turning point.” The Chinese use an ideograph for thLe word that is composed of two characters: the left meaning “danger” and the right meaning “opportunity”. Albert Einstein even stated: “Out of clutter find simplicity. Out of discord, find harmony. In the middle of difficulty lies opportunity.” Perhaps the most compelling definition of the word crisis, however, comes in the form of a visual image - a black diamond ski slope. It could be in Vail, it could be in the Alps, it could be in Stowe, Vermont. But it’s definitely the most challeinging black diamond ski slope - after an icy rain.

As you look down that slope from the precipice, there is no question that the terrain you are about to go down is treacherous - even life-threatening. But what will determine whether or not you make it to the bottom of that mountain intact is how you respond to that terrain and the amount of control you exert over your movements, actions, and responses.

A crisis is very much like that icy ski slope. It presents challenges equally great, and, similarly, the final outcome - that is, where you end up -- is highly dependent on your responses along the way. Given that comparison, an applicable definition of the word crisis, for the foodservice industry, is this: That pivotal moment when an incident and the decisions of a company come head-to-head.

‘Invited paper presented at the Food Safety Summit, March 1999, Washington, D.C

’Editorial correspondence should be directed to Fabia D’Arienzo, Vice President, SCIEhIS Worldwide Public Relations, P.O. Box 65302, Washington, D.C. 20035; fax: (540) 668-6870; phone (540) 668- 7796. E-mail: fdarienzo@sciensww.com

Foodservice Research International 11 (1999) 275-281. A l l Rights Reserved. ‘Copyright 1999 by Food & Nutrition Press. Inc., Trumbull, Connecticut. 275

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Crises: What Causes Them and How Do They Affect Your Business?

Crises affect businesses in many ways. A crisis can put a product, restaurant or foodservice company in the negative spotlight for an extended period of time. It can affect stock price or valuation. It can cost the business a great deal in lost sales and market share, or simply in remedying the situation. A crisis can affect employee morale. And most significantly, a crisis can cause permanent damage to the product, service, or corporate reputation, something that is very difficult to regain.

Many things can set off crises: food-borne illness, tainted product, media reports, product recall, consumer group allegation, product liability, government initiative or politics. Whatever the cause, there are general guidelines that can be followed to help foodservice companies navigate all kinds of crisis situations.

The Fundamental Truth of Crisis Management

The remainder of this article will review nine key principles of crisis management. But even more important than following those nine guiding principles is understanding and basing decisions on the “fundamental truth” of crisis management. Quite simply: The public forgives mistakes. But the public does not forgive how a mistake is handled. A business faced with a crisis situation therefore must always and invariably hold the health and well-being of the public as its primary concern.

Nine Guiding Principles

The outcome of a crisis can never be guaranteed. There are too many variables involved. And typically, there are too many players and too many possibilities outside the company’s control.

But by understanding and incorporating the following principles into any crisis management strategy, a foodservice company can certainly enhance its ability to navigate - and increase its chances for surviving- the storm.

Principle #1: Form an Internal Management Task Force. The formation of a “crisis team” within the organization is the first and probably most important principle for crisis management. Ideally, this team would be identified and trained in advance of a crisis. And it would consist of members from different disciplines so that in considering the situation at hand, all perspectives would be taken into account. For example, this group might include people from the following departments: (1) operations, (2) customer service, (3) communications (including a media spokesperson), (4) personnel, ( 5 ) marketing, (6) financial, and (7) legal.

For the core team to be of any real value during a crisis, however, it must be

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given the authority to make decisions quickly and independently. This would include the assignment of a committee chair who would have the ultimate responsibility for assembling, leading, and managing the team and situation. Depending on the scope of the crisis, the members may need to be isolated from their routine daily responsibilities so they can focus appropriately on the crisis at hand.

Principle #2: Gather Facts Quickly. Timing is everything - especially for a foodservice company facing a crisis. Typically, the first 24 to 48 h of a crisis is the only window of opportunity the business will ever have to effectively take control of the situation, demonstrate its ability to manage the issue, and convincingly show its concern.

The challenge, however, is that within the frrst 24 to 48 h little is known about the situation. But the fact is that information during a crisis is never complete. As soon as a company hears word of a crisis situation, then, its first step must be to gather the facts as quickly as possible and then to make the most appropriate decisions based on the information available at the time.

A company can always change its direction as new information becomes available. But waiting too long to act can lead to loss of control and put others at the helm of a situation that is likely to have very long-term effects on the business.

Principle #3: Keep Target Audiences in Focus. During a crisis a company will be in the spotlight. It will be receiving the attention of all its audiences, and not just its customers. It is important, therefore, that in addressing the crisis at hand the company keep all its audiences in mind and put in place ,systems for communicating with each of these constituency groups.

Most foodservices companies facing crises should consider the following audiences, and plan how and what they will need to communicate to each:

(1) Customers (public), (2) Government (federal, local), (3) Media, (4) Local community, (5) Employees, (6 ) Suppliers, (7) Sales force, (8) Financial community, shareholders.

It also is important to designate a specific spokesperson who will be responsible for addressing the communications issues related to that given group. One audience, one spokesperson. In addition, contact lists for key audiences should be kept on file and updated regularly so when a crisis hits the business is prepared to

278 F. D’ARIENZO and W.L. PINES

disseminate information quickly. Surprisingly, the audience that businesses most frequently forget, or neglect, is

the one they see everyday, and the one they will see everyday long after the crisis is over - its employees. Employees are a company’s natural allies. It is important, therefore, to keep the channels of communication open if it is to keep its employees “on board” and adequately educated about their roles in effective crisis management. The last thing a foodservice company in crisis should want is for its employees to find out about a situation through the local paper or gossip mill without direct communication from senior management. So often employee cooperation or “loose cannon” tendencies seriously affect the direction in which a crisis goes.

Principle #4: Handle the Media. The phone rings. Your secretary picks it up. It’s the local paper. The reporter has heard from a reliable source some very troubling information. He wants a comment from the company. One thing is for sure, that reporter won’t go away and kill his story because you don’t take the call. For good or for bad, the media wield tremendous power and influence. Media coverage or inquiries can cause crises to escalate quickly and can even become the crisis itself. So, in one form or another, a foodservice company in crisis must develop a strategy for dealing with the media. This would include:

(1) The development of clear messages; (2) Knowing what you want to say and to whom; (3) Message testing, if at all possible; and (4) The selection of a centralized spokesperson who personifies the

company and who has access to current information.

Remember, too, that for media spokespeople to be highly effective, they require advance training and rehearsals, with emergency “refresher” training, if possible, when a crisis hits. This means advance planning long before any crisis reaches your doorstep.

Media materials also should be prepared in advance, including information about safety standards, safety procedures, the company, generic holding statements, and a media contact list.

As you develop your strategy, keep in mind that the messages a company delivers will change as the crisis evolves and the facts emerge. But what should always remain constant are the messages of concern, and of the responsibility that the company is taking to address the situation appropriately.

Don’t ever forget the fundamental truth of crisis management: The public forgives mistakes, but not how a mistake is handled. Irresponsibility or lack of concern is never really forgiven. Obviously, what is said publicly is always done within the confines of legal considerations. The best approach, then, for

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communicating concern to the media, or to any audience for that matter, is the attitude: “It’s not our fault, but we’ll act as if it is.”

Principle #5: Control the Information Flow. Just like on that icy ski slope, control is paramount in a crisis. A foodservice company in crisis always should strive to stay at the helm of the situation and “stay ahead of story.” This applies to all audiences, including the media.

By leading with information rather than by trailing with responses, a business is in a better position to control the environment. By taking charge and guiding the tone and direction of the story, the company has a better chance of establishing credibility, and of being perceived by its key audiences as open, with nothing to hide.

In order to effectively “stay ahead of the story,” a company must understand the media’s goals. Reporters, after all, play such a pivotal role in (disseminating information to the public. Simply, the media are (1) looking for a good story, and (2) searching for cause or blame. A foodservice company in crisis, therefore, must always lead the information flow with the responsible actions it is taking to address the situation appropriately.

Principle #6: Convene Outside Experts. A great danger in any crisis situation is the “ t a h g to ourselves” syndrome. By convening outside experts, foodservice companies can step outside the walls of their biases and inherent self-interests and obtain valuable guidance that they could not obtain from individuals too closely connected with the company.

Outside, independent experts can (1) provide objective analysis of the situation and its impact, (2) offer fresh ideas for dealing with an issue, (3) 1e:nd credibility to the actions the company is taking, and (4) provide a credible source of information for the media, government, local community, and other key audiences.

Principle #7: Develop Third-Party Allies. A friend in need is a friend indeed. Unfortunately, in the business world, such generosity is not so cornmon. It’s in times of crisis that companies feel the most alone and the most unfairly treated. It is therefore so critical that foodservice companies establish strong, relationships with their publics and develop allies long before any crisis crosses the horizon. It’s during these noncrisis periods that foodservice companies mu:st build their credibility with these key groups and individuals. Then, when a crisis does strike, the company can call on these allies for support in the form of letters, public statements, petitions, op ed pieces, testimony at government hearings, media interviews, collaboration on educational efforts, etc.

Principle #8: Remember International Implications. First it was ships. Then it was the telegraph, telephone, and airplanes. Today it’s the Internet and CNN.

280 F. DAEUENZO and W.L. PINES

With modem technology on the fast track, the world is a much smaller place. And sure enough, publicity - and bad news ----cross borders.

In developing a strategy for dealing with a crisis situation, businesses must think about the international implications of a given situation. Will the U.S. media pick up a European tainted product story? Will that affect sales here? Will it diminish the public’s confidence in the product or service?

It’s important that in dealing with a crisis situation a company communicate with its key players worldwide. In developing any action plan, it is important that there be a single company-wide strategy, with many local implementations that take into consideration the cultural, market, and regulatory differences from country to country.

Principle #9: Constantly Monitor. The direction of a crisis can change quickly and in mid-stream. It therefore is crucial for a foodservice company in crisis to closely monitor the situation on a daily basis. Surveys, including overnight telephone polls, focus groups, and Internet polls are good ways to measure and probe the situation. But by keeping the lines of communication open with allies and key audiences, a company not only is able to closely monitor the environment, but also is better able to control the situation and flow of information. Remember, the purpose of monitoring is so companies can assess and reassess their strategies and messages as the crisis evolves.

Preparing for a Crisis

The nine principles of crisis management will certainly help foodservice companies facing crises navigate the storm. But if they want an added leg up in dealing with any crisis situation, preparation is the answer.

The four basic steps to crisis preparation are:

(1) An inventory of vulnerabilities and strengths; (2) A response and preparedness manual; (3) Crisis simulation training; and (4) The development of systems to build relationships and stay alert.

Specifically, a foodservice company should prepare for crisis situations by:

(1) Creating internal processes to manage crises, before they hit; (2) Assigning members to an internal crisis team long before any crisis rears

( 3 ) Acting to fix obvious potential sources of crises; (4) Educating government, financial and other communities on key

emerging issues so understanding is built early on and so no one is caught by surprise;

its head;

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(5) Closely monitoring the media, government, advocacy groups, and other

(6) Building ongoing relationships with key audiences and allies in times of key audiences to spot emerging crises at a distance; and

calm.

CONCLUSION

Crises can occur at any time. They can affect a foodservice company dramatically in lost sales, employee morale, and permanent damage 1.0 reputation. But systems can be set up to preempt crises and the nine principles of crisis management can help guide foodservice companies when crises do hit.

Remember:

(1) Form an internal management task force; (2) Gather facts quickly; (3) Keep target audiences in focus; (4) Handle the media; (5) Control the information flow; (6 ) Convene outside experts; (7) Develop third-party allies; (8) Remember international implications; and (9) Constantly monitor.

But most importantly, always hold the health and well-being of the public as your primary concern, for the public forgives mistakes, but not how a mistake is handled. It's your response over which you have control. And its your response to the crisis situation that will greatly influence the outcome.