Crisis Communication: A Case Study

Crisis communication by a company in trouble can help it contain the damage if handled effectively. The Indian experiences can perhaps provide some pointers to the essentials of the exercise.
India’s corporate history is littered with crisis situations, when companies found themselves unprepared in terms of communication, to face their main audiences. The need for effective crisis communication (the description given to larger moments of un-preparedness in the communication phrase book) is an absolute necessity otherwise the crisis itself can, in terms of its perception blow out of proportion.
Disastrous to the company facing the crisis, the necessity then is to curb the negative fallout through effective and timely communication. Crises could arise out of a number of factors, industrial disasters, hostile takeover bids, founded or unfounded political, social, environmental or financial allegations, are the major ones.
Of the more prominent crises in India had been the Bhopal gas tragedy in 1984, the Irish butter controversy in 1987-88, the Swaraj Paul Escorts imbroglio of the early eighties, the Asia Brown Boveri (ABB) locomotive deal of 1990, and the more recent Enron and the Thapar DuPont Limited (TDL) Nylon 6.6 controversies. How their communication was handled could provide interesting insights into the do’s and don’ts in crisis communication, albeit in a microcosm.
First the salient points of ‘must do’ while communicating in terms of crisis:
Fast, unruffled and mature response: a crisis more often than not has trigger effect. It sends management running-some for cover, pulling skimpy contingency plans around their needs: others retract into a shell; and still others go helter skelter in search of experts such as lawyers, or the crisis gurus. What needs to be done, instead is to layout the issues pertaining into the crisis, translating them into questions most likely to be raised in a hypothetical worst case scenario, and drafting answers to these questions. All this, even before the concerned public / media gets back to you.
Did TDL lay out the issues for its proposed Nylon 6.6 plant at Goa? TDL took the issues at Goa much too lightly. The project had resistance from the locals and environmental groups. The larger issue was of garnering local support. What TDL should have done was to have interacted with the locals, asked them about their concerns, and should have taken a participative approach towards local employment.
It was not to be, and as a result, the project had to be shifted out of Goa to Tamil Nadu. The cost brunt the company faced was around Rs 12 crores in land and the opportunity cost of delayed operations.
The hostile pressure groups / media are, even when their convictions are not colored by any commercial or political interests, might end up harming the company’s interest. What is needed is to quickly identify such elements, and preferable have a face to face communication to put up your side of the picture, all with an air of gentle humble and friendly aggression.
The Irish butter controversy provides an example in good light with this argument. In 1987, 1600 metric tones (MT) of butter was gifted to India by Ireland for reconstitution into milk. 200MT of this butter which was sent to the Greater Bombay Milk Scheme (GBMS) was alleged to be contaminated by the Chernobyl nuclear fallout of April 1986. There was resistance to its sale and distribution to the extent of warning to have it destroyed.
The media debate still raged on, alleging fears about the butter’s bitterness, even if after the Bombay High court’s and the Supreme Court’s judgments pronouncing the butter completely safe for human consumption. The judgment was based in tests carried by the Bhabha Atomic Research Center (BARC) and the report of the expert committee appointed by the apex court.
Roger Pereira’s who handled the crisis communication exercise for National Dairy Development Board (NDDB) and the Government of India. The media was playing up just one side of the picture to the detriment of clients. To abate the media hostility, personnel visits were made to editors and senior correspondents with copies of both judgment and the relevant background information. Moreover, a symposium to clarify issues was organized to which the members of the media were invited.
The negative reports started to decline after that and to cap the issue once and for all a television program. Was the butter bitter? Taking up the pros and cons was aired on the National Network in August 1987 attempting to allay people’s fears. The butter was then reconstituted into milk and sold, with no resistance from co-consumers.–

Designing Organizational Communication

Drive communication, instead of being driven by it: once the issues have been identified and crystallized a carefully thought out plan should be charted, primarily to minimize the impact of the crisis on the organization at large. This call for absolute consistency, integrity and tenacity, because there will be moments of self exposure, admission of collective responsibility to the crisis and a lot of brick bats to face. A spokesperson has to be identified, who is going to interface with the different publics to ensure consistency and coherence in communication. A core team should be formed to deal exclusively with the crisis, thereby ensuring that the normal working of the organization is not hampered.
Though Union Carbide India Limited (UCIL) did admit moral responsibility to the methly isocyanate leak at its Bhopal plant in December 1984, it delayed giving a direction to its communication program by as much as a year after the disaster. In fact, UCIL did not even have a public relations department in 1984. As a consequence, the house arrest of the spokespersons for the company, the chairman and the managing director for around ten days, threw all communication totally out of gear.
The company learnt its lesson. In 1985, UCIL had formed a core team to deal with the crisis, thereby ensuring a smooth functioning for the normal business of the company. This has undoubtedly held in good stead for the company, which despite the fallout of the crisis still carrying on fetched Union Corporation a handsome Rs 290 crores when it sold UCIL to Mcleod Russel.
Interface with industry / association / government: This kind of support is of immense help in times of crisis, as it can provide the right communication platforms and vehicles to reach the influences in bureaucracy of the government.
Remember the Swaraj Paul – Escorts scandal? When Paul in a hostile takeover bid, started buying over shares of escorts, major shareholders, the Nandas, fought back. What clinched things in their favor, apart from a well orchestrated communication exercise was their good offices with the powers that be in the bureaucracy, financial institutions and the government.
So much for the do’s in crisis communication. Now for the don’ts or the pitfalls:
Issues to crisis: Most crises start as smaller issues, which, unattended, snowball into major crises. The cardinal rule is to admit that there is a problem and to be proactive and nip the issue in the bud even before it can assume the proportion of a full blown crisis.
Probably the Tehri and the Sardar Sarovar dam issues would have never assumed crisis dimensions, had it not been for the callous attitude towards communication by the concerned government authorities.
Moment of silence: Make sure it is only a moment. At the time of the crisis, most organizations are too stunned by its magnanimity, losing vital time in even reaction to the crisis. Though the surprise is understandable, what the moment needs is to start thinking and acting on one’s feel even while comprehending the situation.
Had UCIL done that? Well, there was almost a year of near silence – barring some routine and uninspired media briefings before the corporation decided to come out and clarify its position and clear a host of negative perceptions from the media’s mind.
The Legal / guru rescue: Though the importance of the legal angle should be responsibly understood, its limitations should also be realized. The legal protection should not unduly hamper the communication efforts, which happens most of the time, to the company’s peril.
There is a common tendency on the part of most organizations facing crises to start taking things lying down, and this precisely acts as the final nail to their coffins. What is needed instead is the ability and willingness to be aggressive in one’s communication with those intended to harm your interest.
During the ABB crisis in 1992, wherein the company’s technology for rail engines was questioned and allegations of financial kick backs were made, written responses to negative stories were discreetly and quickly circulated to competing media to shame the hostiles in one media. The negative allegations were used to present the positive story to an interested media, according to Baig, who handled the ABB’s communication crisis. There is also a new school that lays emphasis on working out a crisis communication preparedness plan on a broader framework of what is how’s, why’s and who’s of crisis communication. Be that as it may, the first step would still be the willingness to communicate.