If a company’s corporate and legal culture instinctively runs away from a crisis—instead of determining if and how it should respond and providing crisis management training workshops—it’s likely that the problem will expand significantly.

When federal agents recently staged over-night raids at 61 Wal-Mart department stores and rounded up some 300 illegal immigrants working there as cleanup crews, the corporation’s lawyers awoke to their most dreaded nightmare: a potential legal crisis affecting the company’s corporate reputation and an immediate media public relations frenzy.

A rule of thumb in the 21st century: There is always a media frenzy when a “star”—in this case, the world’s biggest retailer—is perceived as being in trouble with the law.

Today, no one is exempt from potential crisis. The collapse of Arthur Andersen LLP following the Enron scandal and Martha Stewart are cases in point. Andersen initially ignored the warning signs and lost leverage immediately by not recognizing that it had a bet-the-company crisis on its hands.

By the time it got its media act together and provided crisis media training classes—and when it did, Andersen did so much right on this score—it was proxy season. So when the Big Five firm lost some big-name accounts, including Delta Air Lines, the press presented the defections as terminal symptoms of Andersen’s problems.

In Martha Stewart’s case, her adamant denials of any wrong doing in insider stock trading have come back to haunt her. The subsequent conviction of a close friend whose company stock Stewart sold just before it nosedived has further damaged her corporate reputation and her case in the court of public opinion.

A key lesson in corporate crisis management : When appropriate, an early deal with prosecutors and giving crisis communications training seminars (even when the client is innocent) can be far less expensive, in terms of legal fees, market share, stock prices, and damaging media exposure, than a long, drawn out fight in the courtroom and on the evening news.

Being a great lawyer is about winning. Being a great in-house counsel is about protecting the brand with crisis PR. Winning a case at the expense of damage to the brand is no win at all.
When your client is dealing with a bad crisis communications situation—whether it is an event that leads to potential civil liability or potential criminal charges—the conventional advice from lawyers has been that “no news is good news.” Put differently, some lawyers have stated that their preferred method of dealing with the press is to “tell them nothing, with crisis training courses and tell it to them slowly.”

At the other end of the crisis management plan spectrum are public relations professionals, who are accused of having only one piece of advice for clients: “Get it all out, and get it out immediately.”

As with most things in life, the best course of action in school crisis management typically lies somewhere in between and must be decided based on the situation at hand.

In most high-profile and high-stakes litigation, the decision about whether to present your client’s crisis training seminar in the court of public opinion is taken out of your hands (as it was in the Wal-Mart case), either because the media is already reporting the story or they soon will be. Once the matter gets to the press, silence is usually no longer an option.

Notwithstanding the Fifth Amendment, corporations (and high-level managers and celebrities) are almost always considered to be guilty until proven innocent in the eyes of the public. In a pre-Enron DaimlerChrysler survey, more than 60 percent of Americans equated a corporate “no comment” with “I’m guilty.”

The numbers have only gotten worse since Enron. Bad press about corporate class misconduct can have an immediate and significant financial impact on a company’s bottom line, and the lawyer’s typical practice of saying nothing simply does not serve the client’s best interests.

Perhaps schooled by an ongoing sex discrimination case against it, Wal-Mart chose immediately to be perceived as acting responsibly—all the while distancing itself from the illegal immigrants themselves. Rather than a “no comment,” Wal-Mart’s spokespeople quickly said that the company was cooperating fully with the federal investigation and insisted that those arrested were all employed by outside contractors, not by Wal-Mart.

It remains to be seen how the case will play out in the press as the investigation goes forth, leading perhaps to the courts. Whether or not Wal-Mart executives knew of the illegal workers before the raids, it seems clear that their legal team was prepared for just such a media Mayday. And while few companies have the marquee attraction of a Wal-Mart, all of them should know how to minimize a media crisis by providing its staff with a crisis training workshop.

First Crisis Training Steps Toward Avoiding a Media Mayday

• Create a crisis management training course that includes representatives from in house counsel, your outside law firm, the head of human resources, the head of the division directly involved—for example, the production or scientific staff—and your in-house crisis PR team and your outside PR firm.

• Prepare three to four brief crisis communications message points that offer a clear, concise statement of your company’s crisis management plan position—and, if possible, innocence—and that affirm your cooperation with the investigating authorities. Keep them as on point as possible: the more explaining you do, the fewer opinions you sway.

• Announce concrete steps your company is taking to protect consumers, stockholders, and employees. Crisis PR message points without action to back them up aren’t credible to the news media.

• If you haven’t already done so, provide the crisis PR team spokespeople with crisis media training classes for broadcast and print interviews that includes videotaped role-playing workshops.

• Ensure that all employees, especially the receptionists, understand that the company has a crisis management plan workshop structure in place to handle the crisis and is working as a first priority to resolve it to everyone’s satisfaction.

• Create a contact system so that all members of the crisis management plan team can contact one another day or night, and be prepared to reply promptly and accurately to press inquiries.

• Consider setting up a special consumer hotline to handle inquiries from consumers or establishing a counseling center for affected employees. Your company’s Web site should also offer up-to-date seminars about the crisis.

Source: Richard S. Levick  link

Related: Crisis Training