Through the Fires: The Evolution of Crisis Management

Posted: March 9, 2015, 3:23 p.m.
by Ethan Wiggins.

Ludlow, Colorado, April 20, 1914: 1,200 striking coal miners and their families are attacked by the Colorado National Guard and the Colorado Fuel and Iron Company camp guards. More than two dozen men, women and children are killed. In the eyes of many, there is only one man to blame — the owner of the camp, John D. Rockefeller Jr.

Before then, such an event would be catastrophic to a company if it were publicized; but this situation is during the height of muckraking journalism, and every journalist is out to expose the horrors of industrial labor. Therefore, in order to preserve his company’s (and family’s) reputation, Rockefeller retains the help of public relations professional Ivy Lee. Lee sees things differently than most, and he uses the Ludlow Massacre to showcase his abilities.

Lee sends Rockefeller to Ludlow to gain a better understanding of the miners and their families. Rockefeller has dinner with the miners’ families and dances with their wives. All of this interaction is documented by Lee, who spreads the good news, along with positive stories on the miners, to the press, which builds a positive reputation for Rockefeller to the public.

Through this pioneering of crisis management, Lee learns several key lessons in public relations:
• He was against corporate secrecy.
• He believed in being transparent with the media.
• He did not want to suppress news.
• He found that the goal of PR was no longer to deceive the public.
• The corporation’s performance should live up to the standards that the PR practitioner set for the corporation.

“The basic principles of crisis management haven’t changed: It’s still about taking control of the situation and being a leader,” said Chris Nelson, crisis management lead for the Americas at FleishmanHillard.

The lessons learned by Ivy Lee remain the key points in crisis management today, but now, Fortune 500 company has shifted from being reactive to being proactive to any and all crises.

“Crisis containment is no longer possible through one-way communication. Crisis preparedness, in 2015, requires owning and driving your own content with four-dimensional thinking and an appreciation for the new top-down, bottom-up authority structure,” said Andrew Liuzzi, senior vice president of crisis and risk management at Edelman Chicago.

Liuzzi helps organizations prepare for all types of crises that they may encounter. He educates them on all fronts of communication, but he preaches that commitment to genuine two-way engagement is crucial during crises.

Social media was one tool unavailable to Ivy Lee in 1914. Liuzzi calls social media “one of the four buckets of communication.” It is an easy way to create and maintain communications with publics during crises, but its lack of control over the reach to target audiences and responses received creates “fragmented risks.”

“The 24/7 news cycle helps expedite the fragmentation of risk,” Liuzzi said.

In 1914, the news cycle was not 24/7 — it was very limited; therefore, public relations practitioners had ample time to prepare responses to a crisis. Now with the 24/7 news cycle, organizations are expected to respond faster than ever before to any crisis and maintain communication throughout the crisis.

“Before a company even knows what happened, crises news can spread throughout the world,” Nelson said.

Nelson has more than 20 years of experience with crisis management and has seen the field change “dramatically” in the past 15 years.

“Crisis management has changed more in the past 15 years than ever before, and that’s emblematic of the world we live in,” Nelson said.

Nelson attributes this change partly to the changing media landscape, “The biggest difference is in the early ’90s, we were concerned with radio, TV and print media — in that order. Today, we are far more concerned with a fantastically more rapid spread of information through social media,” Nelson said.

In the modern-day corporate environment, employees are much more cautious in their decision-making. Nelson said that this is likely due to the Sarbanes-Oxley Act, which was created in response to corporate scandals such as Enron. Nelson said that this is one of the most important pieces of legislation influencing the change in crisis management. This act forces corporations to comply with responsibility standards, including several sections that mandates that senior executives take individual responsibility for the accuracy and completeness of financial reports.

“As a result of Sarbanes-Oxley, companies have become far more sophisticated in how they approach risk and crisis preparedness,” Nelson said.

“The secret to a strong crisis response depends on the ability of each organization’s leadership to maneuver with agility and make decisions in uncertain conditions with less than all of the information,” Liuzzi said.

The faster and better an organization can respond to a crisis, the better the public will perceive that organization. The worst strategy an organization can take is a silent one. The longer an organization takes to give an authentic response to a crisis, the more the public begins to lose trust in the organization.

The one thing that has not changed since Ivy Lee’s handling of the Ludlow Massacre is the experiential intelligence that comes from every situation.

“Experiential intelligence is critical. By facing similar issues in the past, you’re more equipped in the future,” Liuzzi said.

After his handling of the Ludlow Massacre, Ivy Lee explored what he learned from the situation and used those valuable lessons in his next crisis. Today, crisis management professionals use their experiences, and other organizations’ experiences, to better equip themselves for the future.

“You need to go through the fires to figure out what works,” Liuzzi said.