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Managing Crises

sharing trade secrets

Though well-known in the financial world, the Cantor Fitzgerald bond-trading firm wasn't exactly a household name until September 11. Then it lost 700-plus employees and its home office in the World Trade Center atrocity, and gained worldwide sympathy. Cantor Fitzgerald undermined that sympathy, however, by removing the missing employees from the payroll four days after the towers fell, and by making other ill-timed moves in the full glare of the international media, says Vanessa Rugo Robinson '95, until recently a crisis counselor for a Boston public relations agency. Like many businesses, the firm probably had not deeply considered how it would deal with potential crises, let alone a crisis of such magnitude. As Robinson has written, "Companies often spend more time planning for their company picnics...than they do for serious events that can threaten their success or even their survival."

Though the field of crisis management dates back to the 1970s, with the Tylenol contamination scare, knowing how to manage crises is even more important now because of media expansion, especially the internet, Robinson says. For example, the names of corporate violators of food safety regulations -- information for which you would have once had to dig -- are now readily available on the web.

During Robinson's four years in crisis management, she helped businesses come up with multipronged responses to potential crises. For a food manufacturer, for example, she would anticipate product recalls, asking questions such as, How are you going get that product back from your clients? What will you tell the media? What will you tell your truck drivers? What will you tell the public? she says. "You really have to craft very specific responses."

Once written, the plan was tested in a simulated crisis. Four people from Robinson's PR firm, including Robinson herself, would show up at the client's offices on a day known in advance only to the business's CEO and president. Meanwhile, colleagues in Boston would role-play on the phones as consumers, supermarket managers, public health officials, and the media, each wanting information. "Some calls would be idiotic,"; Robinson says. "Like, 'My dog ate your company's hamburger meat, and I took her to the vet. She seems okay, but will you pay for the visit?' But you have to handle all calls professionally."

Robinson, now a food and consumer products broker, also helped clients handle crises in real time, including numerous product recalls, the indictment of executives for white-collar crimes, a corporate takeover, and a strike against a nonprofit service organization.

In the case of the nonprofit, Robinson urged the organization to stay cool, she says, despite the temptation to "come out blasting." Instead of attacking the union in public, she advised the group to talk about its own good works. "It's not going to do you any good to have your fight played out in the media," she explains. "One side is going to have to be bigger, and in the end you look better for having done so."

Of course, actions count at least as much as words in the outcome of a crisis. For the nonprofit, this meant reaching a settlement with the union. For Cantor Fitzgerald, it might have meant making sacrifices to keep those employees on the payroll. During a crisis, when caught in the glare of the media, Robinson asserts, "the company really has to do the right thing. It may cost you more, but you can't go wrong doing that. When you're looking at finances versus people's lives, there's no winning argument that favors finance." --David Reich

For more information on crisis management (or consumer products brokerage), contact Vanessa Robinson at vrrobo@hotmail.com.

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