LP Professionals Embrace Crisis Leadership

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The first bullet fired in the deadly Washington, D.C. sniper spree of 2002 shattered the front window of a Michaels store in Aspen Hill, Maryland. The nightmarish twenty-three days that followed tested the successful retailer’s crisis management and communication skills and put the company in the national media spotlight. Thankfully, no one was injured that early October evening, but the nation watched in horror over the coming three weeks as fourteen citizens were killed or injured, including a Michaels customer wounded in a parking lot in nearby Frederick, Maryland, two days later.

“At first we didn’t know if it was a disgruntled employee, or an angry customer, or what,” says Doug Marker, vice president of loss prevention and safety at Michaels Stores. “Of course, our first and primary concern was for the safety and well-being of our customers and employees,” Marker emphasized.

Based in Irving, Texas, Michaels Stores is the nation’s largest retailer of arts and crafts materials and operates more than 1,000 stores across the U.S. and Canada. The retailer’s loss prevention team immediately went into action after the first shooting and sharply ramped up their efforts as the crisis progressed.

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Most experts agree that effective crisis management is a combination of doing the right thing from an operations perspective and communications with key audiences in and outside the organization to ensure they know the organization is responding properly.

Incidents like the sniper shootings put LP professionals front and center. While many are experienced and comfortable operating in a crisis environment, the expanded role of internal and external communications can be less familiar. The reality is crisis communications today is a balancing act of quiet, pre-emptive communications and assertive and strategic communications in the heat of the emergency. This dichotomy can prove challenging, but it is a fundamental element in separating mere crisis response efforts with crisis leadership capabilities embraced by a growing number of organizations.

Events like September 11th and the northeast power blackout of 2003 have raised the bar considerably for emergency response and crisis leadership efforts. This is especially relevant to loss prevention managers who must be more vigilant than ever. While faced with the daily freelance shoplifter, the more organized shoplifting rings have become more brazen and threatening in their tactics. Further, protestors and special interest groups who object to the selling of some products, such as furs, have found the Internet a tremendous boon to organizing efforts that disrupt business. While major non-natural emergencies, such as hostage takings and armed robberies, remain the exception, the stakes are much higher and the threat to the bottom line greater than ever before. The likelihood that other voices will tell the company’s story during a crisis is real and growing.

The Need for Effective Communications

Outstanding communications skills are a requirement for effective crisis leadership. In today’s sophisticated media savvy society, the public has high expectations when it comes to crisis management. Every time an organization does an excellent job handling a crisis, the bar is raised for all other companies. Unfortunately, the bar is raised yet again when an organization is seen as doing a poor job.

How do loss prevention professionals, who generally operate in quieter and more discreet ways, contribute to effective crisis leadership?

No matter who the “face” of the organization is, it’s crucial that there be buy-in and understanding throughout the ranks of senior management for the need to ramp up communications surrounding the emergency.

“It’s key to get the right people in the room right from the start,” says Marker. At Michaels Stores that team includes loss prevention, public relations, human resources, legal, operations, and outside crisis experts. Loss prevention should play a critical role in guiding these early and formative crisis leadership efforts.

The Communications Pyramid

 

An effective crisis communications strategy can be modeled by what we call “The Communications Pyramid.” The graphic shown above illustrates the process of reaching intended audiences and shaping the “net impression” they will have of the company’s crisis response efforts.

Defining the Business Objective. The first step is to consider what the organization is trying to accomplish in the crisis. What is the desired outcome of the response and communication efforts? What is the measure of success?

When subjected to intense government, media, and public scrutiny, it is important for an organization to understand their prime directive in crisis response. Oftentimes the objective is to protect and enhance the reputation and brand, or to preserve the organization’s ability to conduct its operations. Forward-thinking organizations consider the potential of using a serious event or crisis to enhance the organization’s reputation. The leadership team needs to spell out and agree upon both the short- and long-term goals.

Understanding Key Audiences. Secondly, it’s critical for the organization to prioritize and analyze its key audiences. Given the nature and scope of the crisis, who are the most important stakeholders? Who can help or hurt the organization and its response efforts? Customers? Investors? Government regulators? Elected officials? Business partners?

In addition to identifying these constituencies, it is important to consider their concerns. What is their biggest worry? How do they feel about the crisis situation and the organization?

Appreciating the needs and concerns of the internal and external stakeholders will enhance and improve the quality of the communications efforts.

Developing Effective Messages. The next layer of the pyramid is comprised of the company’s messages regarding the crisis. The messages in large part are based on the first two layers of the pyramid—the organization’s business objective and the needs of the audience—rather than simply what the store or organization wishes to say. The organization’s key messages must anticipate and address the concerns of the audience while being faithful to the ultimate business objective. A simple four-part message model is outlined on page 72 to help you achieve this goal.

Enhancing Your “YOU” Factor. Company messages are transmitted to key constituencies via the YOU factor, which is the top of The Communications Pyramid. The YOU, or messenger, represents the strengths and weaknesses the spokesperson brings to the retailer’s communications efforts.

In most cases, the human qualities of the spokesperson have a more lasting impact than the words of the message. Studies show that if viewed as competent, credible, and compassionate, this favorable net impression will be remembered long after the details of the message are forgotten.

Even if LP professionals are not serving as the official media spokesperson, their YOU factor is still on display as they interact with senior management, law enforcement personnel, and other important stakeholders.

The Characteristics of Crisis Leadership

So how does the loss prevention professional help communicate the desired net impression that their organization is concerned, competent, and responsive? This warrants discussion of the traits of crisis leaders.

Rule Number 1—Crisis leaders provide “heads-up” communications. They reach out to stakeholders in advance.

At Michaels Stores, Marker takes the lead communicating with several law enforcement and security organizations while serving in a supporting role to the public relations department, which leads broader external communications. His team strives to develop and maintain good relationships with these organizations before a crisis strikes.

The head of loss prevention at one nationally known, high-end retailer based in the Rocky Mountains does the same. He says his team “communicates a lot in a quiet way.” Yet he emphasizes that this is a balancing act. Walking the line of sensitization versus desensitization through employee outreach can be tricky. Communications outreach should result in improved judgment and heightened sensitivity, rather than desensitization. “The big events are rare, so people become complacent,” he says, citing the fact that only two armed robberies have taken place in his organization in the last twelve years.

The importance of stakeholder outreach and pre-emptive communications is illustrated by the Concentric Circles of Influence graphic shown on page 70. An issue, risk, or threat is marked by the Xin the diagram. While the order of stakeholders in the cascading rings may change, those closest to the X are considered most impacted by or interested in the issue. Responses and communication should be driven by those in the center rings moving outward.

Stakeholders who are further removed from the incident often are most interested in knowing whether or not the organization is addressing the needs of stakeholders in the inner the rings. For instance, Wall Street investors want to know that the affected organization is taking steps to assist customers and to comply with the needs of government officials to ensure business continuity.

This concentric approach to communications can help alleviate other concerns and escalation of the problem or emergency. Loss prevention professionals play a critical role in addressing the impact on those stakeholders who are most affected.

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Special Interests and the Media

At the same time, this directional approach to communication is often disrupted by two important groups.

The first are special interest groups, such as Fur Friday, a national group that protests fur retailers on the Friday following every Thanksgiving. Their organizational mastery of the Internet gives them a mass communications tool to support their efforts.

Special interest groups can circumvent traditional communication channels and disrupt the organization’s efforts to maintain a meaningful dialogue with its constituencies. When adversarial groups begin talking to an organization’s key stakeholders, it is important for the organization to respond promptly and directly.

The Rocky Mountain retailer mentioned earlier says he looks at the Internet as the great communications equalizer. “Protestors are Internet savvy, but so am I,” he says. “Ninety percent of the time I know in advance of their plans.

”The other group that can impede the retailer’s communications in a crisis is the news media, which seeks out crises and emergencies for their product. Viewership tends to spike with breaking news, a lesson CNN and the other networks have learned countless times. Local news media have also caught on and don’t hesitate to disrupt their programming and expand coverage for breaking news.

And because of the relaxing of FCC ownership rules, newspapers, radio and television stations, and websites all cross-pollinate their operations with the same or similar stories. For example, The Tribune Company owns leading newspapers and broadcast and Internet operations around the country, including The Los Angeles Times, Superstation WGN-TV, 50,000-watt WGN Radio, The New York Daily News, The Chicago Tribune, KTLA-TV in Los Angeles, and countless others, each of these with their own dedicated website. Gannett offers the same model.

The crush of competition in the media means less time is spent analyzing and editing news stories, especially in a crisis. The result is that when a crisis hits, news media in all its forms saturates an organization’s key audiences with coverage. Competing news outlets will go directly to affected stakeholders, including frightened customers, anxious employees, competitors, protestors, law enforcement personnel, and others, to fulfill their need for information. For an organization to survive this onslaught, some equity of good will must be established with stakeholders in advance of the problem.

Rule No. 2—Crisis leaders are quick to act in spite of a lack of information. They get caught doing the right thing.

In the D.C. sniper shootings, Michaels Stores relied on well-tested procedures and existing plans to manage the company’s response. A well-defined phone tree, which is printed on the inside cover of every company phone directory, dictates who gets called at Michaels depending upon the nature of the incident or issue. Levels of notification change depending upon the severity of the situation using measures such as the number of stores affected, the potential financial impact, or the potential for extensive media coverage. Having a tested crisis communications procedure in place is critical. Marker says Michaels puts its crisis response plans to the test when coping with natural disasters such as hurricanes and severe weather.

Four-Part Message Model

Rule No. 3—Crisis leaders use few messages with many audiences. They address stakeholder concerns and exercise message discipline.

In the midst of a crisis, many organizations have a tendency to say too much or too little. A deceptively simple four-part message model can help prepare and deliver communications efficiently and effectively. These proven message themes can help guide internal and external communications. Show concern for those people and audiences most impacted. The organization, in its words and deeds, should speak directly to those most affected. Following are statements that show concern.

“We deeply regret the disruption and inconvenience this incident has brought upon our customers and neighbors. We are working hard to limit the impact and assist them in any way we can. We have activated our emergency plan, which includes…”

“This is a terribly sad day for the friends and families of all those affected by this tragedy. On behalf of every family member in our organization, I express our deepest sympathies and compassion.”

“Our primary concern is for the safety and well-being of those who were injured. We are making sure they get proper medical attention and we are hoping for their full and speedy recovery.”

Detail responsible actions. Outline for your stakeholders the many steps you have or will be taking to address the crisis situation. Keep in mind that many of these groups may not know or assume that you have a crisis response plan. Statements that detail responsible actions include these examples.

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“We have activated our emergency plan, and we are escalating our response efforts. Emergency response experts are on the scene now working to resolve the problem.”

“While we hope never to have to face an incident such as this, we do prepare ourselves through advanced training programs, emergency exercises, and close cooperation with local officials.”

“We are committed to using every resource at our disposal to mount an aggressive and effective response to this situation. So far we have [activated a certain number of emergency personnel; contracted with a certain number of specialty firms; completed certain tasks and activities].”

Describe your cooperative approach. Share the problem and the solution. In a crisis, the outside world wants to know that the affected organization is working alongside others to address the problem. Cooperative efforts enhance credibility. The following statements demonstrate a cooperative attitude.

“We are working hand in glove with local police and fire officials in a cooperative way. In fact, [titles, names & affiliation] are all full members of our emergency response team.”

“We are getting excellent cooperation and assistance from the city, county, and state emergency response organizations, including…”

“I want to express my appreciation and admiration for the efforts of the unified command team that is providing us with a great deal of help and a vast amount of resources. Working with us today are emergency response professionals from…”

Demonstrate your resolve. Former New York City Mayor Rudy Guiliani and others members of his team set a new standard of crisis leadership by demonstrating great resolve. While showing compassion over the tragedy, they also communicated a net impression that they would not be defeated nor overcome by the enormity and tragedy of 9/11. Statements that show resolve include the following.

“We can and will recover and rebuild.”

“We are committed to doing what is necessary to effectively respond to this situation and restore normal operations. For instance …”

“I am certain our organization can overcome the current situation and return to serving the many stakeholders who depend on us each day.”

Communication Goes Both Ways

At Michaels, Marker left daily voicemails for the company’s executive team throughout the sniper incident apprising them of the latest details in the investigation and the actions being taken. He also encouraged executives to contact him directly if they required more detail or had important information to share. In addition, email updates were provided to corporate personnel and each retail location.

To ensure the information flow was in both directions, LP personnel made visits to the affected stores throughout the investigation. The executive vice president of stores also recorded a message for all stores providing details on the company’s actions and concern.

Rule No. 4—Crisis leaders are good listeners. They establish and maintain feedback loops with their most critical audiences.

The loss prevention team at the Rocky Mountain retailer embeds incentives in communication with store associates. They receive a percentage of merchandise that is recovered. Because all associates are on 100 percent commission, he cites the fact that if it’s stolen, they aren’t able to sell it. He says this is a great incentive for employees to get involved and help loss prevention minimize threats to the company.

This associate feedback loop also allows him to sell the loss prevention message and keep employees sensitized. “A good deal of my job is communicating what we do and the results of the job. If nothing happens, it’s the way we want it. On the other hand, we don’t get recognized. So we have to continually demonstrate what’s being done. Cases can take fifteen months or more to resolve. LP must communicate where the case is, what steps are being taken, and what’s changed,” he says.

A Balancing Act

Externally, Marker’s team served daily as the liaison for Michaels with law enforcement officials, including the Montgomery County Sheriff’s Department, the Maryland State Police, and the Federal Bureau of Investigation. At the same time, the public relations team was in full operation addressing the alleged links between the sniper and Michaels.

Rule No. 5—Crisis leaders act responsibly while managing liability. They understand the court of law versus the court of public opinion.

Many organizations are overcome by a siege mentality in the midst of a crisis, making them hesitant to speak for fear of the legal ramifications. Unfortunately, while the legal courts may take years to grind out justice, the court of public opinion renders its verdict each night on the news.

You can take responsible action without making yourself the responsible party. Prevailing in the courts, but losing in the court of public opinion is like winning the battle and losing the war. Legal concerns must be carefully weighed, but they can’t stand in the way of keeping a company from doing what it must to sustain relationships with key audiences.

Rule No. 6—Crisis leaders share both good news and bad news. They work to be a source of timely, accurate, and balanced information.

One of an organization’s most treasured possessions is the trust and credibility it establishes with its constituencies. Maintaining trust means communicating with candor. Nonetheless, many organizations are slow to acknowledge bad news, or they prefer not to volunteer negative information. The result is that the tough lesson of full disclosure is relearned time and time again. Experience demonstrates the public is willing to accept that bad things happen to good companies, so long as the company is seen as acting in a compassionate, responsible, and forthright manner.

In hindsight, the team at Michaels Stores is pleased with the effectiveness of their response efforts. “From a corporate perspective, I think it went as well as it could have, given the tragic nature of the incident,” says Marker. “Looking back, I can honestly say I don’t think there is much we would do differently.” Most crisis leadership experts would agree.

 

STEPHANIE NORA is a seasoned executive and broadcast journalist with more than two decades of communications experience in network television, public relations, and media consulting. As managing partner of Wixted Pope Nora Thompson & Associates Chicago office, she provides strategic counsel and crisis communications training services to a wide variety of corporations. Nora is a member of the American Society of Training and Development and a member of the Chicago Council on Foreign Relations.

RAY THOMPSON is managing partner of Wixted Pope Nora Thompson & Associates Houston office. He provides individualized communications training to newsmakers around the world, including corporate executives, political candidates, government officials, and national journalists. Thompson previously served on the board of directors of the American Legislative Exchange Council and as a corporate fellow at the National Governors Association. He also served as director of issues management for a Fortune 15 global company.

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