Crisis communication problem solving

The value of communication during a crisis: Insights from strategic communication research

W. Timothy Coombs

Nicholson School of Communication, University of Central Florida, P.O. Box 161344, Orlando, FL 32816-1344, U.S.A.

Business Horizons (2015) 58, 141—148

Available online at www.sciencedirect.com

ScienceDirect www.elsevier.com/locate/bushor

KEYWORDS Crisis communication; Evidence-based; Crisis response strategies; Crisis

Abstract The field of strategic communication encompasses a burgeoning crisis communication literature that seeks to identify effective and ineffective crisis communication efforts. Strategic communication has identified an array of crisis response strategies and the factors that determine when these response options are effective or ineffective. This article extracts key lessons from the crisis commu- nication research to develop a set of guidelines managers can use to inform their crisis communication efforts. The analysis includes an examination of the crisis response strategies and their desired outcomes, the timing of crisis responses, and the situational factors that have proven to affect the effectiveness of crisis response strategies. The research results provide the foundation for evidence-based crisis communication. The guidelines help managers to understand how their communica- tive choices will impact the corporate reputation and other important crisis out- comes, and will help managers to make informed choices about crisis communication. # 2014 Kelley School of Business, Indiana University. Published by Elsevier Inc. All rights reserved.

1. Crisis communication

On July 6, 2013, a Canadian Pacific Railway locomo- tive carrying crude oil derailed in Lac-Mégantic, Quebec, Canada. The ensuing explosions and fires resulted in 42 deaths, five people missing and pre- sumed dead, and evacuation of the town. Edward Burkhardt, the CEO of parent company Rail World

E-mail address: [email protected]

0007-6813/$ — see front matter # 2014 Kelley School of Business, I http://dx.doi.org/10.1016/j.bushor.2014.10.003

Inc., proved a key point about crisis communication: just because you communicate during a crisis does not mean you necessarily make the situation better. In fact, a leading business journal noted that Burkhardt’s coping tactics made the situation worse for the organization. Crisis communication should be strategic; efforts should be designed to improve the situation for stakeholders and the firm in crisis. What was Burkhardt’s Achilles heel? As this article will demonstrate, the problem was ineffective crisis communication.

ndiana University. Published by Elsevier Inc. All rights reserved.

142 W.T. Coombs

I will resist use of the label ‘best practices’ for crisis communication. Best practices implies bench- marking and uniformity in a process. While we can identify crisis types and similarities between crises, it is misleading to assume uniformity. Each crisis has the potential to create unique communication de- mands. What we can identify are lessons from the strategic communication analyses of crisis that pro- duce consistent results. The evidence-based crisis communication research provides guidance regard- ing what is typically effective and ineffective in a crisis. As a whole, this guidance can help crisis managers make informed decisions about the stra- tegic use of communication during their own crises.

The explication of evidence-based crisis commu- nication will begin with an examination of basic crisis response strategies, move on to a discussion of crisis communication outcomes, and end with consider- ation of how various situational factors affect the effectiveness of basic crisis response strategies. This final section reviews primary lessons derived from the strategic crisis communication research.

2. Crisis response strategies

Crisis response strategies represent the words and actions managers employ in dealing with crises (Coombs, 2007). We can view crisis response strate- gies as the options crisis managers have available to them when responding to a crisis. The strength of the strategic communication approach to crisis com- munication is the explication of crisis response strategies. Crisis response strategies are only part of the larger fabric of crisis communication. Broadly, there are two strategies for crisis communication: (1) managing information and (2) managing mean- ing. Managing information involves the collection and dissemination of crisis-related information. Managing meaning involves efforts to influence how people perceive the crisis and/or the organiza- tion involved in the crisis (Coombs, 2010). Crisis response strategies are primarily about managing meaning. Hence, the discussion of crisis response strategies must consider the effects the crisis re- sponse strategies are intended to have upon stake- holder perceptions of the crisis situation. Crisis response strategies can be divided into three cate- gories: instructing information, adjusting informa- tion, and reputation repair.

2.1. Instructing information

Instructing information helps stakeholders to pro- tect themselves physically from a crisis. Crises cre- ate a unique set of stakeholders: victims that are

negatively affected by the crisis. Instructing infor- mation prevents stakeholders from becoming vic- tims (Sturges, 1994) by warning people to evacuate, to not use a product, or to shelter-in-place. The strategic objective is public safety.

2.2. Adjusting information

Adjusting information includes efforts to help stake- holders cope psychologically with a crisis (Sturges, 1994). Expressions of sympathy, information about the crisis event, counseling, and corrective action are all variations of adjusting information. Crises can create anxiety (Jin & Pang, 2010) and anger (Coombs & Holladay, 2005). Information about the crisis event reduces anxiety by reducing ambiguity. Corrective action helps stakeholders by explaining how the organization is working to reduce the like- lihood of a repeat of the crisis. Expressions of sympathy help to reduce anger while counseling helps with extreme anxiety.

2.3. Reputation repair

Reputation repair seeks to reduce the negative effects a crisis has on the organization’s reputation and related assets. Reputation repair strategies can be organized into four groups: (1) denial, (2) reduc- ing offensiveness, (3) bolstering, and (4) redress. Each strategy offers a slightly different means for reputation repair.

2.3.1. Denial Denial seeks to sever any connection between the organization and the crisis, with the objective of establishing no responsibility. Simple denial argues that the organization is not involved in a crisis and that misperception links the two. An example would be a rumor (untrue information) about a crisis or confusing the organization with a similar firm that is experiencing a crisis. A scapegoating strategy seeks to shift the blame to another actor; here, the organization is connected to the crisis but lays fault upon another entity. Either way, if the organization is not responsible for a crisis, the crisis should not damage the organization (Benoit, 1995; Coombs, 1995). Less damage is inflicted on an organization if people believe the organization is not connected to the crisis.

It is important to note a critical caveat of the denial strategy. If an organization uses denial and then later is found to bear some responsibility for the crisis, damage inflicted upon the organization is intensified. Hence, manager should avoid using de- nial if they are at all unsure about the organization’s true culpability. Moreover, stakeholders generally

The value of communication during a crisis: Insights from strategic communication research 143

have a negative view of the scapegoating strategy. Stakeholders want organizations to take responsi- bility rather than try to pass the buck. Consider when a crisis is caused by a supplier. The company whose name is on the product is expected to take ultimate responsibility and not pass that responsi- bility down the supply chain. For example, when Mattel attempted to blame the use of lead paint in its toys on a supplier, customers reacted negatively. Because stakeholders assume Mattel should be re- sponsible for its final products, they wanted the company to take responsibility for the ensuing recall and crisis.

2.3.2. Reducing offensiveness Reducing offensiveness strategies acknowledge an organization bears some responsibility for the crisis. However, the organization claims it had little con- trol over the situation or the crisis was not as bad as people perceived. Arguing lack of control or minimal damage to others serves to reduce attributions of crisis responsibility (Coombs & Holladay, 2002). In reality, organizations seldom utilize reduce offen- siveness crisis response strategies.

2.3.3. Bolstering Bolstering strategies seek to add positive informa- tion to the crisis situation. Managers might remind stakeholders of the organization’s past good works or thank those who helped combat the crisis, such as first responders or loyal customers. Bolstering works by adding positive information to help offset nega- tive information generated by a crisis.

2.3.4. Redress Redress strategies include actions designed to pri- oritize victim concerns. Compensation offers money or other types of rewards to victims. Apology ac- cepts responsibility for the crisis and asks victims for forgiveness. The idea behind redress strategies is to engage in positive actions toward victims in order to offset negatives from the crisis.

3. Outcomes

Outcome variables are the second set of variables that are important to understanding the effects of crisis communication. Outcome variables represent the different factors that crisis communication strategies can influence, and reflect efforts to man- age meaning. The five most common outcome var- iables are reputation, emotion, purchase intention, stock prices, and word of mouth. Reputation is easily the most studied outcome variable in crisis commu- nication research. As defined by Fombrun and van

Riel (2004), in the corporate sense, reputation is an evaluation of an organization driven by the percep- tions of stakeholders. Crises damage reputations, and crisis communication is one resource that can be used to repair that damage (Benoit, 1997). Because reputation is a valued intangible asset, reputational damage should be avoided (Fombrun & van Riel, 2004). The two dominant emotions that emerge in the crisis communication research are anger and anxiety. Stakeholders are angry that organizations allowed a crisis to occur and to harm others (Coombs & Holladay, 2005). Crises produce anxiety because people are afraid the crisis may harm them or worry about a recurrence of the crisis (Jin & Pang, 2010). Anger and anxiety can alter how stakeholders inter- act with an organization. Therefore, crises can have direct financial costs through declines in purchase intentions and stock prices (Jones, Jones, & Little, 2000). Anger has been shown to increase the likeli- hood of negative word of mouth after a crisis, and negative word of mouth can damage an organization in many ways (Tucker & Melewar, 2005). However, crisis communication can be used to reduce the negative effects of a crisis on a range of outcome variables. The challenge lies in connecting the crisis communication strategies to the outcome variables. The question becomes: How can crisis communica- tion reduce the negative effects of a crisis? The key to addressing that question is the cluster of situational factors that shape how crises create negative outcomes for organizations.

4. Situational factors

To protect an organization from crisis harms, we must comprehend how a crisis inflicts harms on an organization. Research has identified four situation- al factors that help us understand the damaging effects of crises: (1) crisis responsibility, (2) compe- tence and integrity, (3) long-term and short-term threat assessment, and (4) timing.

4.1. Crisis responsibility

Crisis responsibility represents the amount of respon- sibility for a crisis that stakeholders attribute to the organization (Coombs, 1995). Crisis responsibility is derived from attribution theory. The more people attribute a negative event to the person involved, the more negative they are toward that person. Similarly, the more stakeholders attribute crisis responsibility to an organization, the more damage the crisis inflicts upon the organization–—including reputational dam- age, purchase intention, anger, and negative word of mouth (Coombs & Holladay, 1996, 2002, 2005;

144 W.T. Coombs

Schwarz, 2008). Situational Crisis Communication Theory (SCCT) has mapped critical variables that shape attributions of crisis responsibility.

SCCT uses a two-step process to assess attribu- tions of crisis responsibility. The first step entails determining the crisis type. The crisis type is the general frame that is being used to define the crisis situation. For example, a victim crisis frame posi- tions the organization as a victim of the crisis and thus produces minimal attributions of crisis respon- sibility, while a preventable crisis frame produces strong attributions of organizational responsibility. Examples of victim crises include workplace vio- lence, rumors, product tampering, and outside at- tacks. Preventable crises include management misconduct that knowingly places stakeholders at risk and/or violates laws or regulations. The second step entails evaluating intensifying factors in the situation. A history of similar past crises or a nega- tive prior reputation will intensify attributions of the organization’s crisis responsibility (Coombs, 1995, 2004, 2007; Coombs & Holladay, 2002). The two-step assessment allows crisis managers to de- termine if stakeholders are likely to view the orga- nization as bearing little or significant responsibility for the crisis.

4.2. Competence and integrity

Competence and integrity are two critical elements of corporate reputation (Brown & Dacin, 1997). Psychological research demonstrates that people are more willing to forgive trust violations related to competence than trust violations related to in- tegrity; this is similar to the difference between accidental acts (competence) and intentional acts (integrity). Research shows that apologies are very effective at addressing trust violations resulting from competence. However, apologies serve to in- tensify damage from trust violations resulting from integrity. The damage intensifies because the apol- ogy reinforces that the person is guilty of a moral violation. Denial was found to prevent trust prob- lems with integrity violations (Kim, Dirks, Cooper, & Ferrin, 2006; Kim, Ferrin, Cooper, & Dirks, 2004). A similar pattern has been found with organizational crises when using denial. The dilemma is that when an organization is guilty of an integrity-based crisis (has some responsibility for the crisis), denial is an ineffective option. If managers deny any responsi- bility for a crisis and are then found to bear some responsibility for it, damage to the organization will be intensified (Coombs & Holladay, 2014). This means that crisis managers must use a strategy–— or some combination thereof–—that is perceived to accept a level of responsibility for the crisis, if

indeed the organization bears any responsibility for the crisis.

4.3. Long-term and short-term threat assessment

The threat appraisal model, drawing upon Contin- gency Theory from the field of public relations, finds that long-term threats are perceived as stronger than short-term threats. If a crisis can be classified as a long-term threat, it will require greater atten- tion and a more victim-oriented, accommodative response than would a short-term crisis (Jin, 2009; Jin & Cameron, 2007).

4.4. Timing

Timing refers to timing of the release of information acknowledging that a crisis exists. This line of re- search is known as ‘stealing thunder.’ Stealing thun- der is a concept derived from legal studies and refers to situations in which a defense attorney will bring up a weakness before opposing counsel has the opportunity to do so. Being the first to address a weakness reduces damage to the legal case (Williams, Bourgeois, & Croyle, 1993). Stealing thunder in crisis communication occurs when the organization in crisis is the first entity to report the existence of the crisis. Stealing thunder research consistently demonstrates that a crisis inflicts sig- nificantly less reputational and other damage to an organization when the organization is the source of the initial report about the crisis compared to when another party, such as the news media, is the first to release the information (Arpan & Pompper, 2003; Claeys & Cauberghe, 2010). It benefits the organi- zation to release initial information about a crisis occurrence because reputational damage is intensi- fied if another party is instead the first to do so.

5. Crafting evidence-based crisis communication

Crisis communication research has been generated in public relations, corporate communication, mar- keting, management, and psychology. I reviewed a range of this research when identifying the key factors involved in crisis communication: crisis response strategies, situational factors, and outcomes. Using the research as a foundation, we can construct a fairly substantial set of evidence- based recommendations for crisis communicators. What follows is a discussion of guidance that can be distilled from the extant research. Again, this guid- ance represents not best practices but rather

The value of communication during a crisis: Insights from strategic communication research 145

insights regarding which crisis response strategies can be beneficial in a particular crisis and which can actually make the crisis situation worse. The guid- ance discussion is divided into three sections: (1) recommendations for action, (2) warnings, and (3) long-term versus short-term gain. The recom- mendations for action section is the longest and seeks to identify the best available advice about how crisis managers might communicate during spe- cific crisis situations. The warnings section discusses the dangers inherent in utilizing a denial strategy. Finally, the long-term versus short-term gain section considers the consequences of flying low or being aggressive with crisis communication.

5.1. Recommendations for action

This section identifies key situational factors and how these factors should shape the selection of crisis response strategies, as well as subsequent effects of chosen crisis response strategies on crisis outcomes. Table 1 provides a quick summary of the crisis communication guidance.

No Crisis Responsibility Crisis Situation. In this situation, the organization bears no responsibility for the crisis. The crisis could be based on false information (a rumor) or be a case of mistaken identity (a different firm is involved). Crisis

Table 1. Overview of crisis response strategy guidance

Crisis Situation Crisis Response Strategies

No Crisis Responsibility Denial

Minimal Crisis Responsibility Instructing and Adjusting Information

Strong Crisis Responsibility Instructing and Adjusting Information apology, compensation, or both

Integrity-based Crisis Instructing and Adjusting Information apology, compensation, or

Competence-based Crisis Instructing and Adjusting Information apology

Long-term Threat Instructing and Adjusting Information apology, compensation, or both

Timing Instructing and Adjusting Information

managers should use the denial strategy and provide evidence against the erroneous perception that the organization was in crisis. If successful, the denial strategy separates the organization from the crisis, thereby protecting organizational assets from damage.

Minimal Crisis Responsibility Crisis Situation. In this situation, the organization does have some link and responsibility for the crisis. The crisis will in- volve some external attack such as product tamper- ing, workplace violence, or terrorism. Instructing and adjusting information are necessary to address the needs of victims or potential victims. When there are victims, crisis managers must emphasize what is being done to help the victims. Public safety and welfare must be shown as the organization’s top priorities. Victim focus is what will help limit dam- age to organizational assets.

Strong Crisis Responsibility Crisis Situation. In this situation, the organization is the source of the crisis and could have taken actions to reduce the likelihood of the crisis. Examples include man- agers knowingly sending an unsafe product to mar- ket or purposely violating laws or regulations. Instructing and adjusting information is the initial response, as these crises produce victims. Crisis managers must determine if they will add compen- sation, apology, or both to their response. Given the

Outcomes

� Protect reputations and purchase intention � Reduce anger and likelihood of negative word of mouth

� Protect reputations and purchase intention � Reduce anger, anxiety, likelihood of negative word of mouth

� Protect reputations and purchase intention � Reduce anger, anxiety, likelihood of negative word of mouth

both

� Protect reputations and purchase intention � Reduce anger, anxiety, likelihood of negative word of mouth

� Protect reputations and purchase intention � Reduce anger and likelihood of negative word of mouth

� Protect reputations and purchase intention � Reduce anger and likelihood of negative word of mouth

� Protect reputations and purchase intention � Reduce anger and likelihood of negative word of mouth

146 W.T. Coombs

high level of crisis responsibility in this situation, crisis managers–—if interested in maximizing the reputation repair potential of crisis response strategies–—must go beyond instructing and adjust- ing to enact the most accommodative strategies possible. Simply using instructing and adjusting in- formation is a viable response, but less optimal than adding an accommodative strategy. By seeking to help the victims, crisis managers can lessen damage suffered by the organization.

Integrity-based Crisis Situation. In this case, the crisis situation will be similar to the attribution of strong crisis responsibility crises. The two crisis situations are very similar but not isomorphic. In integrity-based crises, managers demonstrate little regard for morality. Examples include knowingly sending a dangerous product to market or embez- zling. Instructing and adjusting information is the initial response. Crisis managers then must deter- mine if they will add compensation, apology, or both to their response. Again, a victim focus is what will help to reduce the amount of damage an organiza- tion suffers from the crisis.

Competence-based Crisis Situation. In this situa- tion, the crisis will reveal a problem arising from an error that stems from the organization’s lack of skill. The organization exposes a competency gap be- tween what is required of its duties and how the organization performs those duties. Industrial and transportation accidents can be competence-based. Instructing and adjusting information is the initial response if there are victims. An apology is strongly recommended because of its ability to rebuild trust for competence violations. The addition of an apol- ogy should significantly help to repair damage done by the crisis.

Long-term Threat Crisis Situation. In this situa- tion, the crisis has staying power and can inflict harm on an organization for an extended period of time. Instructing and adjusting information is the initial response if there are victims. An apology should be added to quicken the end of the crisis. An apology is an effective way to end media interest in a crisis and shorten attention span regarding the crisis (Hearit, 2006). The combination of strategies should provide some level of repair to organizational damage created by the crisis.

Timing Crisis Situation. In this situation, the crisis manager has the opportunity to be the first to release information about the crisis. It is not always possible for the firm to be the first source of infor- mation: the news media or some social media source might be the first to report the crisis, or legal requirements might dictate that a government agency is the entity that must report it. For exam- ple, most product harm events in the United States

must be reported first by the federal government. As part of the organization’s initial statement, it is still useful to provide instructing and adjusting informa- tion. By stealing thunder, crisis managers can sig- nificantly reduce the damage a crisis inflicts on the organization.

Except for No Crisis Responsibility, the seven aforementioned crisis situations are not mutually exclusive. Crisis managers may face crisis situations that entail a combination of the situational factors, such as an integrity-based crisis that produces strong attributions of crisis responsibility and presents the opportunity to steal thunder. Table 1 demonstrates overlap in the optimal crisis response strategies; hence, overlaps between the crisis sit- uations are easily accommodated. In other words, there is a consistency to the pattern of crisis re- sponse strategies that will help crisis managers repair organizational damage caused by crises. That central pattern is a base response of instructing and adjusting information–—when there are victims–— and then a decision as to whether or not to include an apology, compensation, or a combination of the two. The unique features of each crisis will help to guide the final crisis response strategies crisis man- agers employ.

5.2. Warnings

In addition to actions that should benefit the orga- nization during a crisis, two warnings should be heeded in order to avoid creating additional prob- lems. First, avoid scapegoating, even if another organization bears some responsibility for the crisis. Crisis managers can mention involvement of another firm (share blame), but should not shift all or most of the burden to the other party. Crisis managers must indicate that they understand the situation is theirs to deal with. Second, denial represents a major risk. If any evidence emerges linking an organization to the crisis after a denial strategy is used, damage will be intensified (Coombs & Holladay, 2014). In fact, researchers have identified the ways in which de- nials can trigger additional damage to an organiza- tion as a type of ‘double crisis.’ A double crisis occurs when the crisis response is so ineffective or inappropriate that it appears to create a second crisis for the organization (Frandsen & Johansen, 2010; Grebe, 2013).

5.3. Short-term versus long-term gain

A crisis can inflict damage on an organization’s reputation and its stock price. ‘Fly low’ approaches can help minimize initial damage to both reputa- tions and stock prices. The fly low approach is when

The value of communication during a crisis: Insights from strategic communication research 147

crisis managers say little about the crisis (Moran & Gregory, 2014). However, the fly low approach is risky in that it seems to suppress the ability of both reputations and stock prices to rebound. Aggressive responses can intensify initial damage to reputation (Moran & Gregory, 2014) and stock price (Raithel, 2014), but also seem to produce a quicker rebound. An aggressive response involves immediately talking about the crisis and may even include the use of an apology. Crisis managers need to decide if they want a short-term or long-term gain from their crisis communication efforts.

6. Limitations

One criticism of crisis communication research is that it forgets about the actual constraints manag- ers face in crisis situations. Financial and legal concerns can limit how crisis managers respond to a crisis (Fitzpatrick & Rubin, 1995; Tyler, 1997). That is why it is important to address the crisis response strategies that crisis managers should avoid. While constraints might prevent the selection of optimal crisis response strategies, crisis managers should know how to avoid making the situation worse and which strategies provide a minimal amount of repair potential.

7. Conclusion

Crisis communication is an applied discipline be- cause it seeks to find solutions to real-world prob- lems. The earliest publications in the crisis communication body of knowledge were based on practitioner advice; practitioners who underwent crises wrote about their experiences and con- structed lists of what to do and what not to do. These lists appear in practitioner-oriented publica- tions (Coombs, 2010). The early and foundational crisis communication research publications re- flected personal experience rather than systematic knowledge (Erez & Grant, 2014). In the United States, crisis communication emerged as a practice in the late 1980s. However, serious research on crisis communication did not appear until the 1990s. As is a common pattern, the practice of crisis communi- cation was ahead of research. The early research was predicated on subjective analyses of cases, not evidence produced by rigorous systematic research. Some 30 years later, crisis communication should be heeding the call of evidence-based management and seeking to use systematic research to guide the practice of crisis communication.

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