How to Maintain Stakeholder Trust in the Early Phases of a Crisis
Crises follow predictable patterns. One of the most persistent patterns is this: Most crises are self-inflicted. But even when crises are not self-inflicted, most loss of trust is. That loss of trust, in turn, leads to decline in other measures of competitive position—stock price, employee morale and productivity, operational stability, or customer demand for products.
That’s because the moment the crisis becomes public, stakeholders are looking for a sign that the organization and its leaders care about the incident and about the people potentially affected by it. That leaders need to care is the constant. What it means to care may be different from one kind of crisis to another, from the early phases of a crisis to the later phases, for one stakeholder group or another. It may also mean caring for people beyond times of crisis. But that the leader needs to care is the first expectation.
Here’s another pattern: The single biggest predictor that trust will fall is the perception that we do not care. In other words, indifference is toxic. Anything that contributes to the perception of indifference causes trust to fall and makes the crisis worse. Another pattern: It is easier to maintain trust before it is lost than to restore it after it has been lost.
So, organizations need some mechanism to determine when to communicate during a critical event. Communicate too late, and the organization loses the trust and confidence of its stakeholders; communicate too soon or ineffectively, and the organization may unleash a set of events beyond its control.
As a result, many professionals—as well as lawyers and business leaders, and others—are reluctant to communicate at all, fearing that what they say could be used by media, social media, adversaries, or critics in ways that increases legal liability or energizes those wishing to harm the organization.
But silence when there’s an expectation of caring creates an opening for others to define the crisis. That’s because there’s a powerful first-mover advantage in a crisis. If the organization itself effectively defines the nature of the crisis, its own motives, and the nature of its actions, the result is that it will likely demonstrate that it cares and will deprive critics and others of the opportunity to portray the organization as uncaring. But if the organization does not take the first-mover advantage, then others can define it in unflattering ways. The longer it takes to show that the organization cares, the more trust it will lose, and the more difficult it will be to win back that trust.
In the immediate aftermath of the crisis becoming public, as stakeholders begin to hear about the crisis and wonder what the organization will do about it, they will interpret silence as indifference—the absence of caring. As a result, trust will fall. Or worse, silence can be further interpreted or characterized by others as a tacit affirmation of guilt (“They must be guilty. Why else would they refuse to say anything?”). In the silence, stakeholders tend to interpret the organization’s crisis as an integrity lapse or incompetence, even when the organization sees the crisis as a routine operational setback.
Worse, continued silence invites the media, social media, critics, and adversaries to seize the first-mover advantage and to paint the organization as uncaring. So, the nature of the crisis gets exaggerated negatively, the company’s motives are characterized as unethical or lacking in integrity, and the company’s actions are characterized as too little, too late, or self-protective.
Even worse, if silence continues, then victims, critics, adversaries, the media, social media, politicians, and opportunists can begin to rally public opinion against the organization. This is when we see calls for boycotts, protests, pickets, petitions, investigations, lawsuits, and for leaders to be fired.
Silence when there’s an expectation of caring creates an opening for others to define the crisis.
Being Ready with a Well-Structured Stand-by Statement
It is possible to find the middle ground between self-defeating silence and self-destructive blabbering, to find the balance between keeping trust now and minimizing risk in any future litigation. The key is to identify the categories of things that can be disclosed without acknowledging blame, guilt, or liability. One of the biggest challenges is the fear of saying anything until we know everything. But it is possible to show care without knowing or sharing too many details about the crisis.
It is possible to show caring by releasing—in writing, verbally, or both—a statement in five parts. In general, even risk-averse counsel will agree that the following, in whole or in part and properly drafted, would not necessarily increase risks in future litigation.
- Acknowledgment: A statement of awareness that something has happened. This must be done without euphemism. Make a clear declaration of what occurred, such as, “There is a fire in our facility.”
- Empathy: If there are or may be victims, an expression of empathy or sympathy. Think: “Our thoughts are with the people in the building and surrounding areas, and their families.
- Values: A declaration of the organization’s values. For example, “The safety of our employees, visitors, and neighbors is our top priority.”
- Approach: A summary of actions we have already taken and the approach we will take going forward. “We are working with first responders on the scene to secure the facility, to account for our employees, and to notify family members and the community.”
- Commitment: Set future expectations, either procedural (“We will update you as we know more.”) or substantive (“We will ensure that the facility is safe before we reopen the building.”).
A clear, matter-of-fact statement that addresses all five topics in this sequence is generally sufficient in the early phases of a crisis to demonstrate that the organization cares. Those who matter to the organization will experience the statement, and their trust will be activated. Think of it as an inoculation against rumors, misinformation, exaggerations, and other inaccuracies that they will otherwise experience from media, social media, opportunists, and critics.
Helio Fred Garcia is executive director of the Logos Institute for Crisis Management and Executive Leadership. He teaches leadership, crisis, ethics, and communication at Columbia University and New York University. His most recent book, with co-author James E. Lukaszewski, is Influencing Leaders: The Seven Disciplines of the Trusted Strategic Advisor.
