Companies aren’t prepared for today’s crisis landscape

New data reveals a startling disconnect.

Are you prepared for a crisis?


Businesses are navigating an unprecedented set of business and societal challenges.

From the lingering impacts of the global pandemic to supply chain disruptions, the rippling effect of Russia’s invasion of Ukraine, the energy crisis, rising costs of living, to new expectations around racial justice and diversity and debates on abortion rights, companies are grappling with a non-stop barrage from every angle, and executives are feeling the pressure.

With everything executives are facing, it is hardly surprising that crisis management has become the fastest-growing area of responsibility for chief communications officers (CCOs) and chief marketing officers (CMOs). Our 2022 Edelman Connected Crisis Study reveals that half of the CCOs and CMOs surveyed say that their crisis responsibilities have increased amidst the rising pressure for hyper-transparency and immediate action on issues.

 

 

Unfortunately, our data shows that despite this increased focus, companies are still unprepared to navigate today’s issues landscape, respond to a growing number of stakeholder groups, and protect trust in a crisis.

Companies underestimating expectations around their role in society

Societal leadership is now a core function of business. However, the sheer volume of societal issues is overwhelming companies. Across each of the 22 societal issues we examined, more than half of CCOs and CMOs are concerned about their potential impact on their brand or company.

The deluge of issues is leading to reticence among executives who face the daunting challenge of navigating the important, complex debates over when and how to engage.

One CCO recently commented to me about the “game of gotcha” that ensues within their organization as they face questions from employees on why the company is taking a position on some issues and not others. Another client reflected on the “hair on fire” decision-making process that they went through on pressing decisions.

Meanwhile, despite the prevailing view of the general public being overwhelmingly supportive of businesses working to solve societal issues, we’ve seen a recent wave of backlash against companies who have done so.

No company should feel compelled to take a position on every issue, nor should these expectations alone drive decision-making. But these dynamics do exist.

As the function tasked with building trust across all stakeholders, communicators have both the opportunity and the imperative to guide company leadership through these situations. This means treating it as part of ongoing business operations — implementing a purposeful approach to decision making, the governance to enable it, and the right data both on the issues themselves and the insights required to enable informed decisions.

Until this happens, the gap between societal expectations of companies and their readiness to navigate this landscape presents a growing risk for those who fail to deal with this tension.

Gen Z changing the crisis game

Gen Z is driving major changes in the crisis landscape.

It’s tempting for some companies –- particularly those who don’t serve Gen Z with their products or services –- to dismiss this cohort. However, we must remember that Gen Z increasingly includes people who are graduating from school, entering the workforce and making purchasing decisions. This group has immense purchasing power, and it’s only increasing.

Gen Z is throwing companies off balance. Almost two-thirds of CMOs and CCOs believe that, more than any other generation, Gen Z has the power to disrupt the role of businesses in society today. They are challenging companies to maintain higher standards in their response to crises and in their role in society. For those that don’t, more than half of Gen Z says they have already taken action – starting or stopping their purchase of brands based on their approach to societal issues.

Companies are struggling to deal with the dynamics Gen Z is introducing. This group is outflanking companies through new approaches and new channels that challenge long-standing corporate approaches to crisis management and force companies to examine their ability to move quickly in new ways.

Simply put, what worked in yesterday’s playbook may not work today – with consumers and with your own workforce.

Businesses misjudge how to protect trust in a crisis

Our study also revealed that CMOs and CCOs need to close the gap with between their perspective and the expectations of the wider public when it comes to their response to crisis. The two most important traits that people expect companies to demonstrate during a crisis are integrity (being honest) and dependability (keeping your promises). However, this is not in line with the way that businesses are managing these moments.

Only 1 in 4 executives are consistently prepared to meet stakeholders starting with their point of view, and not the company position.

Actions matter. No matter how important values alignment is, when a company is in crisis that alignment matters little if the company is not honest and dependable.

Today’s crisis landscape is one of innumerable challenges; one that communicators of all levels are challenged to navigate. Given all of these challenges it’s hardly surprising that sixty per cent of CCOs/CMOs told us they don’t have the right skillset on their staff to manage this range of issues. Companies need to recognize importance of equipping the organization with the appropriate focus and resources to develop a proactive plan to protect itself from today’s risks.

Ultimately, managing crisis is no longer just the domain of corporate communicators. Today’s landscape requires the whole business to commit to creating a culture of resilience.

Dave Fleet is managing director and head of global digital crisis at Edelman.

COMMENT

3 Responses to “Companies aren’t prepared for today’s crisis landscape”

    Ronald N Levy says:

    Edelman is a counselor at the top of the mountain in crisis PR counseling, and this writer gives two words of advice that can avert all kinds of Crisis PR grief.

    Edelman’s wisdom: “Actions matter.”

    Like defendants who plead not guilty, sometimes correctly, companies and countries often believe with all their hearts—and express with anguish—we’re NOT GUILTY. But that’s what the public expects an accused to say so there is time urgency in the Edelman wisdom that actions matter.

    WHEN the actions that matter are taken can have a big effect on how a
    company or country threatened by a PR crisis makes out. When is the best time to take actions that will matter most? BEFORE the crisis when possible or as soon as possible once you can see the peril of a PR crisis..

    HOW will the public judge whether your actions should earn you public favor? Not, as many CEOs suppose, by “fairness” because what seems fair to a CEO may be very different from what a company’s accusers are yelling about fairness. Instead, the public repeatedly decides “what’s fair” and picks a favored outcome in a crisis by public self-interest. Which side will be better for the public?

    WHAT can you do to give your management the best chance of victory in a PR crisis? Do something early—like now or soon—so 100 million or more Americans will love you. Right now well over 100 million are concerned about two diseases that will eventually kill over half our population: heart disease and cancer. Most of us know someone who has or may have died from heart disease or cancer. We are each personally threatened.

    So look at the love you can win from over 100 million Americans if—named for your company—you donate a huge Anti-Heart-Disease Research Center to the famed Weill Cornell Medical Center in New York. Or a towering Anti-Cancer Research Center with Memorial Sloan Kettering Cancer Center.

    Even if this costs a company a billion, much more than this may be saved by averting Washington action that could cost many times as much. Political leaders rarely attack companies widely recognized as heroes, public benefactors.

    Your CEO can at Weill Cornell do press briefings with some of the greatest cardiologists who have ever lived—Drs. Geoffrey Bergman, Steven Markowitz, Steven McCullough, Stephanie Mick and Shing-Chiu Wong. At MSKCC are similarly world-famous leaders in radiology, Dr. Jason Lewis, lymphoma, Dr. Andrew Zelenetz, plus many in surgery, pulmonology and cardiology.

    Your CEO and the doctors can at the first press briefing present how many Americans now alive are likely to die of the disease. Then what the
    Institute and doctors will be trying to do, what they have already done,
    and how many millions of American lives they hope to save. Every three months you may get worldwide media coverage by announcing your the latest breakthroughs.

    You add to your coverage if you get one of your doctors to offer helpful tips on how to avoid the ailment and how to spot early signs if it. Your CEO tells how proud the company is to work with the world’s greatest doctors. The doctors tell how they are grateful for the generosity of the company that may help save millions of lives.

    When a crisis arises as it does at most large companies, which side will over 100 million Americans be more likely to favor—your CEO and the doctors? Or the angry accusers?

    Edelman’s Dave Fleet wrote this PR wisdom and no one can deny it: Actions Matter. They may matter most if you take actions early and have a great PR firm to increase public awareness of what actions you are taking, how many millions of Americans may benefit. Your actions matter.

    Ronald N Levy says:

    You could add to Edelman’s “actions matter” guidance this equally important wisdom: PR inactions may matter even more and threaten to destroy you.

    Your company’s actions can help get you what you deserve but your company’s inactions may cause you to lose what you have and deserve to keep.

    Having a PR crisis, just as having a health crisis like appendicitis or a stroke, can be not just painful but cause death. So if a CEO’s response to a crisis is yeah let’s just watch this and see what happens, the CEO’s tenure and economic life may end before a successful response to the PR crisis begins.

    What can a CEO actually DO once a crisis seems likely or has begun? Two choices:

    .1. Do nothing that costs money because “these things blow over” but money spent doesn’t turn around and blow back.

    .2. Get the company’s ass into a PR emergency room because PR surgery or a clot-busting shot may save the corporate patient’s life but no amount of cursing “those radical bastards” who are demonstrating will get them to stop or get millions of people to not believe them.

    Even if you’re the youngest and least experienced person in the room when there’s talk of what can be done, you may help protect your company and your management–and zoom your PR career way up–by raising these questions born of recognizing PR reality.

    .1. What could we actually lose if the activists win?

    The danger is not just media coverage and public outrage that seems unfair and that may BE unfair because media may tell the sensational charges that are newsworthy rather than also telling your case for “innocent” or at least “partly innocent.”

    .2. What would losing cost us?

    It’s not just management’s embarrassment but—much worse—the peril that political leaders will say “we’ve got to teach a lesson to these bastards who put profit before people.” What comes next may be extremist laws that can cost a company literally billions a year. Billions! For the largest companies, billions a quarter.

    .3. What big PR blunder should we avoid while under attack?

    One of the biggest and most common PR blunders is to say “we’re not NEARLY as guilty as those cursing activists say, not even 10% as guilty.” The PR tragedy is the company making this response is ADMITTING guilt—less than charged but admitting guilt!

    .4. How can we avoid admitting what’s true?

    By showing the truth in the POSITIVE OPPOSITE. If accused of endangering the public or costing the public too much money, show how we PROTECT the public in many ways and SAVE the public money. Truth: every major company helps the public or would be out of business. We can remind the public “why you married me,” what we do—often better than thousands of other companies—to help public safety, economy, convenience or all three. The PUBLIC elevated us to where we are today and the PUBLIC deserves the benefits we supply.

    .5. What more can we do?

    This is a big one: show the PERIL OF THE ALTERNATIVE. (A sometimes great observation when you’re in a meeting.) Activists point out that “if we punish these bastards the way they deserve,” the public will get such and such benefits. Activists tell how the public would gain but not how the public would LOSE so that’s the PR job, show the peril of the proposed alternative.

    Medical care is not a job for amateurs nor is electrical work nor is PR. Edelman is one of the greatest PR teams that ever lived but so are others. Bring in six or 12 and let them pitch. Then pick as if your life depended on it because corporately, your life may. Take the PR Daily courses and read the newsletters
    because–as Edelman counsels and as experience shows–actions matter.

    Ronald N Levy says:

    Notice your PR opportunity if you point out the “positive opposite.”

    If you DON’T do this, your media coverage may be over HOW GUILTY your company is—as bad as critics say or less bad as company defenders say.

    But if you DO assert the positive opposite, media coverage is more likely to be on WHICH SIDE is better for the public—activists who say “they’re guilty because look how much money they’re making,” or defenders who say “they’re a blessing to the public because look how they protect us.”

    Your pick.

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