Facing a company crisis

Crises are expensive: according to the findings of a new study by Burson-Marsteller, the average cost of a crisis to a company is 549,000 euro. Little wonder then, that the threat of a crisis remains one of the top concerns keeping business decision-makers up at night. With respondents from France, Germany, Italy, Spain and the UK, the 2013 Crisis Survey identifies controversial company developments (such as layoffs, for example) as the most commonly encountered crisis. But here’s the rub: while three quarters of business decision makers believe a crisis plan would benefit their company, only 51 per cent of companies have one: does this suggest that communicators aren’t doing their job in ‘selling’ the need for a thorough plan?

Not that the picture is all bad: there are companies dealing with these logistical headaches by drawing on the strength of their in-house teams. According to the survey, internal teams are “primarily” responsible for crisis planning (see the graph above). However, not all of the plaudits can go to internal professionals, as the proportion hiring an outside company to deal with a crisis has almost doubled since 2009. In the event of a crisis, internal activities are the focus, ranging from ‘preparing an internal audit’  and ‘establishing a crisis team’ right down through ‘monitor issues’ and ‘prepare press statements’ to ‘engage with NGOs’.

Troublingly, companies still feel overwhelmed by online communication challenges, although 70 per cent of respondents believe that new media is playing an increasing role in driving reputation during crisis. The report offers a wealth of material on the crisis management process while inadvertently raising interesting questions about the scope of influence of the communications team in internal planning at these difficult – and costly – episodes.

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