While in a perfect world a trustworthy business could operate without fear of negative press and corporate crises, modern media has made it easier than ever for bad news to spread across the globe - no matter its legitimacy.
This is why crisis management needs to be a consideration for any company's PR department. The ability to quell any potentially negative stories and put a positive spin on damaging events is crucial.
No matter how comprehensive your risk management strategies, there is always the chance that an unforeseen and unavoidable incident occurs and damages your reputation in the public eye. And, unfortunately, as more and more consumers connect with businesses via digital media, the harder these incidents are to contain.
The fast and the global
News of a corporate crisis can spread like wildfire, jumping from various media platforms and being shared by consumers across the globe.
According to a study by law firm Freshfields Bruckhaus Deringer (FBD), the news coverage and publicity of more than one-quarter (28 per cent) of corporate crises spread internationally within just one hour. A further 69 per cent reach international infamy within 24 hours, across an average of 11 countries.
However, the study found that it takes an average of 21 hours for companies to establish meaningful communications to defend themselves and, in 18 per cent of the incidents, this takes more than 48 hours. This is a serious concern as misinformation and reputation-damaging stories can become widely accepted as the truth in the time between the release of news and the intervention of the affected business.
The cost of a crisis
Protecting your reputation is a vital consideration due to the ongoing cost of a corporate crisis. While the crises themselves are often temporary, they can easily result in long-term damage to your business.
A year on from the original crisis, more than half (53 per cent) of affected businesses surveyed by FBD had not recovered share prices to a pre-crisis level. Close to three-fifths (58 per cent) experienced a significant disruption to operations due to the incident, while 53 per cent suffered a loss in revenue.
Is your business prepared?
The key to managing a media crisis is being prepared. Foresight and forewarning are ideal, as this give you time to implement plans and avoid major scandals. Strategies such as monitoring social media for customer complaints and tracking news stories for brand mentions can help you respond quickly and efficiently to crises.
However, half of the communications advisors surveyed by FBD believe organisations do not have adequate plans in place to handle a crisis. Four in 10 companies have no firm crisis management strategies at all.
This demonstrates a serious lack of involvement in crisis management and prevention, which could be putting your organisation at risk. Now is the time to review your strategies and implement a plan.