Bernstein Crisis Management. Crisis response, prevention, planning, and training.

Crisis Manager Internet Newsletter about Crisis Management

© 2001 Jonathan Bernstein


In the October 17, 1967 issue of The Wall Street Journal, the following quote was attributed to Robert W. Haack, President, New York Stock Exchange:

"The public may be willing to forgive us for mistakes in judgment but it will not forgive us for mistakes in motive."

When I have worked for clients who have, in fact, done something for which they are civilly or criminally liable, more often than not it has been a mistake in judgment versus motive. A well-crafted and sincere expression of regret and remorse can do much to soften and even turn around public opinion of the offending organization. Conversely, lack of a "mea culpa" automatically leads the public to believe that negative motives are at the core of the issue.


New Year's Resolution: Engage in Crisis Prevention

In my public speaking engagements, I often compare Crisis Communications to firefighting. At one time, I actually worked on the California Department of Forestry account for a major agency and learned a lot about that profession. Any firefighter will tell you that fire prevention is one HECK of a lot less expensive, in many ways, than fighting an already burning fire.

Fire prevention:

  • Can completely prevent many fires, often detecting vulnerabilities you never knew were there.

  • Will minimize the damage caused by unavoidable fires.

Fires, on the other hand:

  • Cause direct damage which is usually extremely expensive to undo.

  • Often result in collateral damage -- not just the actual material  destroyed, but also direct and indirect damage to a wide range of people.

  • Require far more manpower, at far higher costs, than fire prevention -- not just to fight the fire, but to deal with the resulting liabilities.

  • Pull everyone involved away from their normal routine, resulting in other activities being severely neglected.

The law, at least in the United States, requires most organizations to conduct a certain amount of fire prevention, often with the assistance of their local fire department. Yet 90 percent of those same organizations will not conduct crisis prevention activities until after they've had one or more highly damaging "fires."

One of the long-recognized marks of a true professional is the ability to learn from his or her mistakes. To stop doing the same thing over and over again expecting different results. If your organization has not yet engaged in crisis prevention activities, perhaps 2001 is the year in which you can upgrade the level of professionalism -- and, ultimately, the levels of profitability and productivity.


A Painful Conundrum: Can a Company Be Too Loyal to Employees?

[Editor's Note: Most of us admire and would be happy to be employed by a company which stands behind its employees when they're under fire, providing legal and moral support, ensuring that they don't feel alone or isolated just because they're being publicly criticized. But can loyalty blind a company to the fact that, over time, it is bound to have some employees who are actually guilty of behavior which does not merit unconditional ongoing allegiance? With disastrous consequences for that firm and its other employees? The answer is "yes" and this is one such case. I wish I could say it was the only one of which I knew. Names and facts have been altered as necessary to preserve confidentiality]

The Situation

Clearwater Consulting is a very prominent engineering firm with offices worldwide. It has a reputation as a conservative, "we take care of our people for life" organization. Professional employees either use the firm as a launching point for careers elsewhere or stay with Clearwater for careers of 20-30 years, retiring with generous annuities. Professional employees are very seldom discharged for cause -- they seem either to be a "fit" for the corporate culture or go elsewhere voluntarily.

While all major engineering firms are periodically accused of improper or inadequate delivery of services, a troubling trend developed for Clearwater's Atlanta office, albeit unnoticed except in hindsight. One senior principal based in Atlanta, Jerry Smith, was the head of a team accused, in 1990, of faulty work prior to construction of a major commercial real estate development, resulting in the need for very expensive remedial action. There were some extenuating circumstances, including the involvement of other engineering firms. In response to an investigation by State authorities, and facing a civil lawsuit, Clearwater agreed to a settlement without accepting any formal blame. In 1995, and again in 1998, Jerry Smith was involved in all-too-similar situations involving other clients, yet the internal fault-finding apparatus continued to conclude that external circumstances beyond the principal's control were responsible for the mishaps.

However, the 1998 case sparked both civil and criminal investigations by the State Attorney General. Clearwater prudently brought in expert outside legal counsel, whose internal inquiries led them to believe that Jerry Smith and certain of his team members had -- either by omission or commission -- engaged in activities for which they and the firm would likely be considered liable. Certainly civilly, probably criminally.

At first announcement of the AG's investigation, Clearwater's management, for many months, made strong pronouncements denying any wrongdoing,leaning heavily on their its long-term reputation. When the local media realized and reported that Mr. Smith had been involved in previous, similar cases, Clearwater attacked the media's conclusions based again on its reputation, while refusing to actually discuss the details of the case. But the "trial by media" was clearly being lost and, privately, outside legal counsel tried to get management to understand and believe that the trial by jury would not likely go well either. Yet, based on its tradition of standing by employees, Clearwater appeared completely intent on what seemed to be "mass denial" of the situation's reality.

A crisis communications consultant was asked for his opinion. His response was "if wrong has been done, do the least-damaging mea culpa that would be believed and offer to make financial or other restitution as necessary to get the case quickly behind you." And, he advised, "if you believe, with a high degree of certainly, that one or more employees has committed a serious civil or possibly criminal act, distance yourself from any such employee by means of leaves of absence or, if conditions warrant, stronger personnel action."

He tried to point out the difference between blind loyalty and appropriate support. Blind loyalty meant assuming innocence no matter what. Appropriate support, in the wake of the new internal findings, meant creating a little distance to assure the public, clients, prospects and the Attorney General that the company isn't foolish enough to believe that no employee can make mistakes of this magnitude. He pointed out, also, that the company's stance, if eventually contradicted by facts revealed in court, could result in (a) clients concluding that the firm intentionally engaged in a cover-up and (b) staff members concluding that they would receive company support NO MATTER HOW BADLY they managed a job.

Clearwater's top decision makers did appear to understand the potential consequences. However, the consultant was basically told that there was no way the firm would consider anything but unqualified support of Mr. Smith and his team.

The Consequences

In Atlanta, some clients stopped renewing their contracts and some prospects were known to have been lost due to the negative publicity. Worse, other offices of Clearwater received inquiries they could not answer except via general statements developed in Atlanta and vague assurances that everything was going to be OK in the long run.

This was all before resolution of the legal case. After more than a year, with the AG privately presenting Clearwater with more and more damning evidence (some of which leaked to the press), Clearwater plead guilty to civil offenses and paid a huge fine, receiving sanctions and long-term conditions on its Georgia operation. Jerry Smith retired abruptly, as did one of his senior team members, both being barred from practice in Georgia thereafter.

Clearwater lost untold many millions of dollars in business and suffered long-term damage to its reputation. It's not bankrupt. Its reputation will eventually regain its former luster, if it has learned from this experience. But it did not have to be this damaged.


[Editor's Note: I received a wide variety of very supportive messages from readers following my "apology in lieu of" delivering you a 12.15.00 issue. Two of them provided fodder for this section of the newsletter, one of which I'll feature this issue, one the next. Thanks to Charles Barnett for this series of questions in one succinct email! I will try to answer as best I can while protecting client identities.]

Q: So tell us about the kind of crisis situations you faced during this holiday season. How you reacted, and what you were compensated for handling it. Were they local or long distance? Generally what did you do to respond to these crisis situations? Do you charge extra for holiday work? Were these new or old clients? As one who tries to help with such I'd like to know more about how another PR professional goes about this task. My concern is always one of pricing my help too low.

CM: In the past three months I have been working in eight states, ranging from Hawaii to New York. Most of the work has been for three clients. One responding to a variety of issues, to include a lot of activism. One prudently getting ready in case they are the defendants in what is still only a possible lawsuit. And one who's been unfortunate enough to become involved with "bad news" clients whose infamy is now affecting my client firm as well. It's not quite that simple, there are a variety of other issues, but that's the basics. All my "holiday rush" clients were ones I've worked with for some time as their needs dictated. I get most of my business from a network of long-time contacts, most of them attorneys.

What I have done is what I always do -- help assess the situation, invariably working closely with legal counsel, and suggesting both strategy and tactics for internal and external communications. When we agree on tactics, I help implement same. My assessment work has included focus group research, a vulnerability audit and a communications audit. Media training has been conducted in one case and will be for another, soon. Press materials have been written. websites have been developed or supplemented, the latter with the assistance of my "in house" Web subcontractor and wife, Celeste Mendelsohn, who's also responsible for creating the HTML version of this newsletter that's archived on my website at

I believe that being a crisis communications consultant means, by definition, that I'm available 24/7 unless I specifically tell my clients that I'm on vacation and not reachable.

Bonus Article!

[Editor's Note: I promised to bring you extra material in this issue to make up for the lack of a mid-December "Crisis Manager," and popular contributor Dr. Deborah Lowe came through with this outstanding piece for our edification.]

Creating an Online Crisis PR Campaign and Event
By Deborah Lowe

With the growth of the Internet, a crisis strategy must include a crisis addition to the company website or, in some cases, an entire website created to handle the crisis. The problem often lies in the fact that there is no pre-crisis planning for the website and, often, there is no virtual newsroom on the website to highlight the crisis information for the media. There is no notification on the home page that crisis information exists, with a clickable banner to take them directly to the page.

It is important to create a Crisis Web Action Plan in Web format ready to be uploaded before a crisis takes place. A visible action plan needs to be prepared ahead of time to create a media perception that the company is handling the situation in a positive manner.

It goes without saying that a virtual newsroom needs to be created for the company website both for regular company news and also as a place the media can go in a time of crisis. This virtual newsroom should contain a search function, press releases organized by topic and by date, as well as fact sheets, experts with contact information on a variety of topics, a FAQ (Frequently Asked Questions) company profiles, company background, and a library with case studies and information on the industry.

  1. Select An Online PR Goal

    *Pre-Crisis PR Web Goals*

    Pre-Crisis Goals: Get the media to the media area of the website just to form a relationship.

    Create an email media contact list and get them to participate in a news event.

    *Crisis PR Goals*

    Create awareness that the company is handling the crisis in a positive manner and create positive news coverage.

    Create a virtual Web based press conference (possibly a Webcast) to get them to come to the website for coverage information.

  2. Select a Key Reporter List

    Decide on traditional and online media sources to get the coverage you want from the reporters.

    Traditional Sources to send press releases about the crisis:

    • Radio

    • Newspapers

    • Magazines

    • Outdoor and Transit

    • New Media

    Online Media Sources:

    • Web Sites

    • Search Engines

    • Company Sites

    • Advertising sites

  3. Create the Key Crisis Message

    It should be a three or four step action plan to address the situation and make sure that it does not happen again.

  4. Create a Realtime and Online Virtual PR Crisis Press Conference

  5. Set up a Flow Chart with the Sequence of Work Decisions and Implementation for the Crisis PR Campaign.

    • Who is in charge of the crisis team (it should be five members with others called in as needed)?

    • What is the scope of the crisis, and how do you describe it and the end goals.

    • What does the budget appear to be (for recalls, media ads, website)?

    • What media have been selected for corporate crisis ads and how have they been selected? By monthly traffic numbers? By target market? By ad production specification acceptance (flash/java/interactive banners)?

    • How will the crisis PR response be measured?

    • Who will follow up on whether the media placements are done?

    Web Crisis Campaign

    • Will crisis information be put in the virtual newsroom or will a separate site be created?

    • What is the timeline for creating updated Web crisis information?

    • Who has uploaded the crisis information?

    • How frequently will it be updated on the website?

    • Who will have access (password protected area for reporters or open to the public)?

  6. Tracking Audiences Online

    It is important to measure the success of your online crisis PR campaign and efforts.

    What to Monitor

    • Reporter newsgroups which may be discussing the crisis.

    • Discussion forums of activist groups that have targeted your industry and your company.

    • Listserv mailing lists-pages posted about company related issues. If you find crisis issues on listservs that are related to your company concerns, you can subscribe to the mailing list for it and this will allow you to track the crisis discussion about your company.

    How to Monitor

    • Subscribe to alternative media that target your industry and which may publish critical information about your company during a crisis.

    • Outsource monitoring to agencies that provide monitoring, analyzing and even communications response services.

    • Do it internally, by monitoring news groups, publications, ordering clipping services for coverage with trend analysis.

    Methods of Monitoring--Using the Internet to Monitor the Press

    • Read the newsgroups.

    • Use search engines and directories by putting in a keyword and then finding the articles that are related to your company and products.

    • Use software which is designed to help you monitor.

    • Subscribe to mailing lists of organizations that have targeted you.

    • Establish a regular reading list to track articles posted by newsgroups directly related to your business.

One of the options you should consider is a separate website for the crisis. Metabolife chose that option in the wake of an adverse 60 Minutes story. The company took separate video that rolled at the same time as the 60 minutes crew. When it appeared that the editing was not going to present the full picture of what happened, the company put up a separate site and did extensive crisis advertising to drive traffic to that site. Creating a plan for this type of site, prior to a crisis, is also essential.

[Editor's Note: In a future issue, you'll see Dr. Lowe's outline of what should go into such a site. Dr. Deborah Lowe is a Full Professor of Marketing at San Francisco State University teaching graduate courses in Internet Marketing, Digital Advertising, Public Relations in an Internet Age and graduate Marketing. She is a coauthor of an upcoming Prentice Hall textbook, Internet Marketing In A Digital Economy, due out in Fall 2001. She does consulting on Internet Marketing and Product Tampering Crisis Communications. Dr. Lowe can be contacted by email, at".]


"Crisis Manager" now has more than 1,000 subscribers and a high "pass along" readership. It is also reprinted by a number of PR firms for redistribution to their clients. We will accept tasteful advertising from firms whose credentials will first be investigated. We are starting to look at the possibility of long-term sponsors for the newsletter. We also accept short text-based ads in the newsletter and on the website. Research demonstrates that readers click through from text much quicker than from banners, and text-based referrals are higher quality leads. Ad rates and specs available on request -- if interested, write to


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Crisis Manager and the Bernstein Crisis Management website will now periodically include book, software and related product/service reviews. To suggest items for review, write to or contact Jonathan Bernstein, Bernstein Crisis Management, 1013 Orange Avenue, Monrovia, CA 91016, (626) 825-3838.

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