A case study in crisis communications…

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Due to the small size of our State, a crisis can quickly gather momentum and become a real headache for organisations. The following case study provides a great example of a company that was proactive and honest in dealing with a potential crisis, turning the situation into an important and constructive organisational process.

In 2000, after working for more than a decade in the banking and corporate finance industry, Andrew Moorfield decided to launch his own business – a London-based lending ‘dot-com’ for small businesses.

As with many small start-ups, cash flow was tight in the company’s early stages. Uncertainty clouded the business’s operations and Andrew was faced with a number of tough decisions.

The first time he could not afford to make payroll, Andrew was confronted with the unfathomable task of having to decide how to divide the company’s takings between its loyal staff. In this situation, many other organisations would have chosen the path of secrecy – talking to each employee individually and deciding how much each employee deserved, before finally announcing a decision.

Instead, Andrew chose to include his employees in every step of the process. He gathered them together and asked what they thought he should do. He had originally assumed the fairest thing to do would be to pay each team member one-third of their usual salary.

His employees instead thought a better method would be to make their decision based on life situations, i.e. which employees had children, which ones had mortgages and which employees either lived at home or in inexpensive apartments. They came to the conclusion that some workers could afford to go without for a short period and make it up in the long run.

Thirteen years on, Andrew is now Managing Director of Scotia Bank in London, and the business he started in 2000 is one of the largest asset management services in Europe.

By being up front and honest with his staff, Andrew gained their loyalty and support, which helped convert a crisis into an important landmark in the organisation’s history.

This kind of openness and transparency is the very essence of effective crisis communications.

Organisations will always be faced with decisions that will leave one or more parties disadvantaged. By clearly articulating the facts behind each decision to all affected stakeholders, organisations can avoid unnecessary backlash and negative repercussions.

Corporate secrecy or vague, ambiguous communication will only serve to anger and frustrate stakeholders, whether they’re your own workforce or members of the community.

The old adage “honesty is the best policy” has never been truer than in the potentially perilous field of crisis communications, where the gap between effective and ineffective is infinitely wide.

This post is an edited version of an article written by Paul Smith andpublished on PR News.

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