Communicating the Crisis

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.