Monday, May 20, 2002

Crises demand 3 key targets

        When companies go into crisis mode — as the Erpenbeck Co. and Peoples Bank of Northern Kentucky are now, for instance — an expert on crisis management says executives must keep three core targets in focus.

        “You have to be open,” says Wayne Hill, president of Edward Howard & Co., an Ohio public relations firm with offices in Cleveland, Columbus and Dayton.

        “You have to be honest. And you have to be timely.”

        The challenge for most firms, let alone an embattled one is this:

        Almost no company is consistently good at all three.

        Mr. Hill, leader of the longest established independent public relations firm in the country, has more than a little experience in crisis mitigation.

        The firm has advised firms facing lawsuits, companies accused of neglecting worker safety and businesses facing bankruptcy.

        “Organizations in crisis have to be a lot more open than is normal accepted operating procedure,” he said.

        “Questions get raised. Some are legitimate. Some are not legitimate but they are questions nonetheless. You must be open and honest and more so than under normal circumstances.”

        One challenge of any crisis is the speed that it gets played out. And the arena is almost always a public one. “That creates a snowball effect,” Mr. Hill said.

Communication is key

        There is at least one other maxim that companies should embrace when they find themselves in crisis mode.

        It, too, is pretty straight-forward.

        “We'll tell you what we know — when we know it,” he said.

        The biggest mistake that executives and firms make is the inverse of the three above rules of crisis management. That is, companies act slowly and hide or cover up information.

        It's the hermit crab approach to win back trust: hide in a shell and wait for the waves to settle down.

        Instead of finding out that benign indifference will not greet a company, the exact opposite happens. Hiding attracts more attention.

        “A non-answer becomes a no comment and a no comment is equated with guilty,” he said. “The ripple effect of that makes matters very difficult for companies.”

Be open, timely

        He said that while he was not familiar and would not comment directly on the Peoples' bank controversy, the rules still apply.

        Peoples Bank has come under scrutiny after the Erpenbeck Co. came under scrutiny for possible bank fraud.

        The bank has said the company deposited checks made payable to other banks into its own account. The bank pledges to cover any financial obligations it has because of ties to Erpenbeck.

        The challenge is magnified for a bank because people like customers and clients will have a personal and intense interest: money.

        “Almost any crisis situation is threatening to a company's reputation and trust for that organization.”

        In the case of a financial institution, people have immediate concerns and questions that need to be addressed swiftly and openly by the institution.

        “The experiences we have had as we have counseled clients over 77 years suggest that those really are the fundamental pieces that you need to have in place,” Mr. Hill said.

        “You have to be open. You have to be honest and you have to be timely,” he said.

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