When planning and preparing, crisis managers need to think about both operational and reputational crises. Operational crises are traditional crises and reflect the early definitions of organizational crises that included the key characteristic of operational disruption or potential operational disruption. Operational crises threaten to reduce an organization’s ability to generate revenues. Industrial and transportation accidents along with product harm events are common operational crises. Operational crises tend to create dangers for stakeholders such risk of injury to customers or exposure to hazardous chemicals for employees or community members. Therefore, stakeholder safety should be the primary concern during an operational crisis along with the need to maintain or to restore operations. Most risk assessments and crisis management plans will have a strong operational focus. We must never dismiss the importance of operational crises but increasingly managers are facing reputational crises.
Reputational crisis involve situations where an organization risks or experiences serious damage to its reputation. Obviously an operational crisis has implications for an organization’s reputation. However, a reputational crisis poses little risk to stakeholder safety or to operations. An example of a reputational crisis would be an activist group publicly claiming an organization is acting in an irresponsible manner. If stakeholders think an organization is irresponsible, there is a risk of damage to the organizational reputation. Social media have made it easier for stakeholders to present public charges of organizational irresponsibility. The link between social media and reputational crises has resulted in people using the very imprecise term “social media crisis” to refer to any negative information about an organization appearing online. In reality, some negative information is an actual reputational crisis (is damaging the organization), some negative information is a paracrisis (a crisis risk that can be mitigated if managed properly), and some negative information has virtual no effect on an organization.
It can be difficult to distinguish between a reputational crisis and paracrisis. Because the two are closely connected and managed in a similar fashion, I am combining the two in this discussion. The challenge facing crisis managers is sorting through the information that may or may not be a reputational crisis or paracrisis then choosing how to respond to the actual crisis or threat. Whereas operational crises require assembling the crisis team, reputational crises and paracrises can be handled by managers close to the concern. For example, managers involved with the supply chain would address a situation where the organization’s supply chain practices or suppliers are called into question. A key communicative difference between operational and reputational crises is the option of refuting a crisis. Denial is very damaging during an operational crisis. Stakeholders know the problem exists because they may see the smoke coming from a facility or own the dangerous product. Reputational concerns, however, can be a matter of interpretation. Stakeholders may disagree on whether or not an organizational practice is responsible or not. Managers must decide if they will change or defend the practice in question. When stakeholders demanded Honey Maid remove an advertisement using same-sex couples, the managers faced a choice. Honey Maid managers choose to defend their use of same-sex couples rather than to remove the advertisement from view. Managers must understand their stakeholders in order to determine which course of action will appeal to the majority of their stakeholders. What managers would defend their actions that precipitated an explosion at their facility?
Reputational crises and paracrisis will continue to increase in frequency as more and more organizations and their stakeholders gravitate toward social media. The increased use of digital channels provides fertile ground for challenges to organizational actions. Organizations should still focus on operational concerns as the core of their crisis management and communication efforts because of the safety concerns associated with such crisis. However, managers must integrate reputational concerns into their crisis management and communication thinking or risk being unprepared for the crisis threats frequently emerging in the digital world. The basics of crisis communication are still relevant today but needed to be expanded to include those demands being created by reputational crises and paracrises. I would like to end by recognizing that operational and reputational crises can overlap and are related to one another. But thinking of them as separate entities helps to sharpen the need for managers to prepare for both including when the two should be integrated.
Timothy Coombs, Ph.D., is a crisis communication specialist for the Institute for Public Relations and a professor at Texas A&M University. Follow him on Twitter @wtcoombs.