It's the nightmare scenario (BusinessWeek.com, 8/3/07) that no business owner wants to imagine: One of your products is recalled due to safety problems or one of your executives is charged with a crime or one of your customers is attacked in your parking lot. Most entrepreneurs have never thought about what they would do in a crisis scenario, but they should, says Devon Blaine, president and chief executive officer of the Blaine Group, a Beverly Hills marketing and public-relations firm that has been in business 30 years. Blaine spoke recently to Smart Answers columnist Karen E. Klein about the unthinkable and how small companies can prepare for it. Edited excerpts of their conversation follow.
How many times over the years has one of the companies you worked for faced a major crisis?
Probably a dozen times. Most recently, one of our clients faced the FDA recall of a product they had been importing from China. What's scary is that smaller companies have never thought about something like this happening to them and they have no idea how to respond.
You recommend that every company develop a crisis communications plan. What do you mean by that?
I'm not suggesting that you have to run up huge fees with your marketing firm, or take up a lot of time developing a written plan. A plan like this can be very simple—as simple as identifying the attorneys and the other professionals with whom you will interact during a crisis, and knowing where to reach them at night and over the weekend. That could also include executives within your own company. Crisis invariably strikes at 5 p.m. on a Friday.
It also helps if you brainstorm about the kinds of things that could happen to you. Think about what could go wrong, and what you'd do about it, and even if something completely unexpected happens, at least you'll have discussed your response.
What are some of the things you'd need to decide in terms of your response in a crisis?
Who handles calls from the press? Is your receptionist going to be the public face of your company? Do your law firm and your PR firm know your company well? Do they know each other? They should at least have met each other and know your company well enough to advise you in a crisis situation.
I got a call at seven on a Sunday night from one of our clients who had just learned that the FDA wanted to recall one of his imported products from China and wanted him to issue a press release first thing the next morning. My first question was, "Do you have FDA counsel?" He did not, nor did he even know where to start looking. I called another client who's been through this, got him some contact information, and by 7 a.m. Monday morning our client had representation from a New York law firm. But that scenario should not have been dependent on my Rolodex.
What about very small companies that don't have a marketing and PR firm on retainer?
They'll wind up having to pay an hourly consulting fee to get a professional firm up to speed on their business. The same will happen with the appropriate attorneys, which obviously can be very costly. This is why it's important to have relationships with these professionals before the crisis happens.
What were some of the most challenging aspects of the Chinese product recall case you recently handled?
The FDA allowed us to make the recall announcement, so we were able to control that part of it, but we had no control over the media camping out at the company. The CEO did not want to be interviewed, so we issued a formal company statement that had to be approved by the FDA. That happened in about a day and a half, then the FDA posted it on their Web site. Still, both our firm and the company were flooded with phone calls, not just from the international press but also from concerned consumers.