Imagine the embers of a fire. They’re not a scorching blaze; they don’t make much noise. They can last for hours, placidly glowing along. Now imagine something catches one of those embers – maybe a gust of wind or a piece of cloth. What happens? Whoosh! Flames rage and, uncontained, threaten to burn the place down.
These embers are very like the warning signs of a smoldering business crisis. They’re likely to blow up if we don’t snuff them out.
Smoldering crises are fueled by such factors as impropriety, mismanagement, whistleblowing, negligence, scandal, and more. One real-life example of a smoldering crisis is when a faulty ignition switch caused engines in GM vehicles to turn off and prevented airbags from deploying. The defect resulted in four fatalities and the recall of nearly three million cars.
Sadly, the crisis and resulting blow to GM’s reputation and financial prospects could have been prevented. In 2001, eight years before GM filed for bankruptcy due to the crisis, the company detected the defect. Four years after that, GM rejected a proposal to fix it because it would take too long and cost too much.
Smoldering crises are typically internal to the organization and almost always the result of human behavior. Poor decision-making, bad or questionable actions, unclear communication, mixed messages, and a less than transparent office culture are all factors in the buildup of crisis. When they come to the public’s attention, smoldering crises can cause serious – sometimes irreparable – damage to an organization’s reputation, business operations, marketing efforts and financial viability.
Smoldering crises are also the most common kind; in fact, two-thirds of all business crises are this type. Unlike a natural disaster or terror attack for which a company could not reasonably be faulted, smoldering crises are largely avoidable. Therefore, they are subject to intense scrutiny and blame when they come to light.
We spoke earlier of warning signs of a smoldering crisis. Often, these signs are conditions of which employees are already aware but may be hesitant to mention to upper management. Here are some indications that your business may be the ideal breeding ground for crisis, provided by the Institute for Crisis Management (by whom the IVY team is certified in crisis communications and media training).
Fearful silence. Too often, management defaults to “shoot the messenger,” either overtly or inadvertently blaming those who bring potentially damaging issues to their attention. This creates a toxic culture of fear, rather than empowerment, among those who might otherwise be useful agents in preventing crisis.
Not my problem. It’s easy to defer and deflect responsibility, passing a problematic issue from desk to desk rather taking control of the situation once and for all.
Mixed messages. When a company creed doesn’t match its actions, messages throughout the organization become muddled and standards break down. For example, if “customers first” is the mantra but management doesn’t prioritize consumers’ needs or adequately address their pain points, the potential for crisis is great.
Groupthink. You’re in a staff meeting, and someone suggests an idea you think is a poor one – for valid reasons. But everyone else says it’s a good idea, either because they really believe it or they’re reluctant to disagree with the group mentality. Coined by a Yale researcher, that’s “Groupthink,” and it can create a culture of self-censorship and fear of ostracization. The unfortunate result is a squelching of concerns that could ultimately lead to crisis.
Scandal. Sexual harassment, embezzlement, misappropriation of funds, mistreatment…it’s the stuff of drama, but it’s also very real in the business realm. The juicy gossip that fuels social media is a giant leap on the path to crisis.
Senior housing is an industry that is particularly vulnerable to crisis. In fact, 75 percent of all crises in senior living communities are smoldering. What’s more, out-of-court lawsuits average $750,000; 95 percent of all crises are the result of human error; 75 percent of the industry is infected with Malware; one in 10 elders suffers from abuse; and 3.5 million more workers will be needed to serve the Baby Boom generation. Yikes!
The good news is, proper preparation and training can stop a building crisis in its tracks, and even if crisis does occur, reasonable response to it on the part of company spokespeople and others can do a lot to contain reputational and financial damage.
IVY Marketing Group has developed the first crisis communications solution designed specifically for senior housing. Called ResponderHub™, this cloud-based, HIPAA-compliant tool helps those employed in senior living and services prepare for, prevent, and respond to crisis.
Find out how our team of experts, trained and certified by the Public Relations Society of America and the Institute for Crisis Management, can help you snuff out those smoldering embers – before they explode.
IVY MARKETING GROUP. COME GROW WITH US.