Crisis Management: Tips on how to handle bad news Published November - December 2007 Preparing for, and handling, bad news about a brand or corporation’s reputation is a key public relations task. Bad news can be anything from a poor quarter that has to be reported to the ASX, to the surprise resignation of a key executive, a product recall or the loss of a significant contract. Bad news is normally a disappointment, a set back, and an occurrence which will impact on the organisation and how it is viewed. It’s something you usually initiate and the disclosure of which is your hands. It’s normally not of such significance that it threatens the company or has the potential to impact life or limb. That’s typically a crisis (although there can be a fine line between bad news and a crisis!). Here are some principles to follow in planning how to handle bad news. 1. Assume that if you know, others will also soon know. Always work on the principle that bad news travels faster than good news. Make an assessment of who is likely to know, when is the earliest they are likely to learn - and plan to give the bad news before that time.  2. Determine to tell the truth - not a version. There is no substitute for telling the truth. It doesn’t mean that you have to give every detail.  For example if a senior employee has been dismissed for improper behaviour, it is preferable to give that as the reason - rather than to say he/she is pursing other avenues.  But, having been truthful about the reason, it does not mean you have to go into the detail (unless there are mitigating circumstances!). Resist every attempt from management to try and take short-cuts or give a version that suits some internal agendas.  And beware of legal interference - the court of public opinion can be very damaging to organisations that attempt to use legal reasons for not telling the truth.  This is often a certain means of turning an issue into a crisis 3. Gather history, facts and opinions. While it’s important to get the news out quickly it’s equally important to take the time to find out whether there has been any ‘history’ around the issue and what’s been communicated to whom in the past. It’s also vital to know who has opinions and perspectives on the issue and who is most likely to say ‘I told you so’. 4. Do your messaging. Determine what you are going to say.  Then document it and test it within your own organisation by playing the devil’s advocate and trying to pick holes in your messaging. If it won’t survive this test it probably won’t stand up to external scrutiny.  5. Work out who has to be told and when. If you are a listed company chances are there will be a focus on the ASX disclosure requirements.  Sometimes this can drive the whole process.  Again, just because ASX disclosure is a legal requirement doesn’t mean corporate council owns the issue. This can be a mistake.  The ASX will be one of several audiences which needs to know. The challenge is to draw up a plan that ensures that all audiences are told virtually simultaneously.  6. Pre-empt - don’t be caught reacting. On the principle that bad news travels fast - and that media, the investment market and others always relish it when an organisation is ‘caught out’, always try and pre-empt the news. In Australia, the most classic recent example of that was when box-mogul Richard Pratt let the media know he was pleading guilty to ACCC allegations about price-fixing - in advance of the final hearing.  This re-emptive approach gave him a degree of control within the process. 7. Front up - don’t hide. Don’t resort to an announcement by email - and then say that no-one is available for further comment.  The email, media statement or notice board message should be just the starting point - it’s only the announcement.  Bad news needs to be fronted by a spokesperson who puts a human face on it. Adopt the old adage of ‘attack is the best means of defence’.  You might be surprised how well bad news can be contained, and accepted, when a confident human face is attached to it. The ultimate aim in handling bad news is to do so in a way that protects, and in some instances, enhances your corporate reputation.  All organisations face bad news from time-to-time; those that suffer the least from it are those that respond and handle it in a manner that is open, confident and truthful.  Further articles relevant to this topic: Crisis and Issues Management: Issues - are you managing them or praying? Crisis vs issues - what is the difference? Sink Or Swim: Could your company cope with a crisis today?  (April/May 2006) Network PR, publishers of PR Influences, undertakes crisis management planning. For a no obligation discussion click here

PR Influences: crisis management - tips on how to handle bad news