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August 16, 2010
Why HP’s Crisis Response Missed the Mark
 
As I wrote last month, BP's handling of the public relations disaster it was faced with following the Deepwater Horizon disaster surely won't be taught to students as a template for crisis communications. However, when it comes to crisis response, it's important to note that a balanced approach is key to minimize damage.

This month's crisis revolving around a major business brand involves Hewlett-Packard's decision to fire former CEO Mark Hurd following a sexual harassment claim from a woman who worked as a contractor for the company. Seeking to counter the notion that boards of directors are often asleep at the wheel and slow to respond, the company's board pressured Hurd to tender his resignation, which he did Aug. 6. While the company certainly hoped Hurd's departure would make the issue disappear and allow the firm to return to normal, in some ways, it's been anything but that.

The New York Times reported last Tuesday the company followed the advice of its PR counselor, APCO Worldwide, which told the company's board the best stance would be to fully disclose all elements of the case, ranging from  the unsupported allegations of sexual harassment to Hurd's alleged falsification of expense reports -- itself grounds for termination. One would imagine both APCO and HP were calculating, and certainly hoping, that in the end this would be the best course of action. However, in the ensuing days following Hurd's departure, the company has endured a mixed bag, with corporate governance experts saying the board acted appropriately, while many others see Hurd's departure as an event that could harm HP's long-term performance and its ability to transform itself into a services company along the lines of IBM.

While most PR pros won't be called in to handle a crisis of this magnitude, take note this situation also is one that can serve as a template of sorts because it perfectly illustrates how crisis response involves making tough decisions that involve alternatives that all look dangerous. Generally speaking, crisis communications pros do recommend companies to take swift command of a situation because you don't want to appear oblivious to a crisis, à la
BP. However, that doesn't mean that a swift decision on big issues should be an immediate reaction. If you recall, what got BP so much negative press was the fact that many executives were seen as viewing the disaster as an intrusion into their lives. Certainly, no one was happy that it took as long as it did to cap the well, but on the whole, that wasn't the key fact that made it such a crisis for the company.

Likewise, many believe HP should have taken the time to conduct a more thorough investigation of the alleged harassment. If, following an investigation, the evidence showed that Hurd did act improperly toward the former contractor, then HP's board would have been on firm ground to dismiss him. However, if an investigation determined that there was little or no evidence of harassment, then shareholders, customers, and most other influential groups probably would have supported the board's decision to keep him.

What both of these cases show is that it's often the mishandling of information during a crisis, and not necessarily the decisions made in its wake, that bring the most harm to a company's reputation. Influential audiences want a company to conduct a thorough investigation so that all the key facts can be unearthed because this will likely result in smoother sailing for the company later, regardless of the specific circumstances. These cases show that what companies involved in a crisis need to do quickly is communicate all the information they know about a crisis and provide regular updates to key audiences. Also, they should ensure that the company's CEO, or another high-ranking official, quickly assumes the de facto post of crisis czar and always appears in command of the situation.

Finally, it's important your messaging remains consistent. In other words, don't give one set of messages to one audience and a separate message to another based on what you fear their reactions might be. It's better to be open and honest from the get-go rather than risk the chance that the attempt to over manipulate the message will come back to bite later.

The last, and sometimes most important, piece of the crisis communications puzzle is the crisis response plan. This plan lays out the procedures that must be taken in the event of a crisis and designates the individuals who will perform key tasks, such as communicating with employees or the media. Every organization that faces the prospect of dealing with a crisis, even if that crisis at first seems mundane, should have a crisis communications plan. In addition, you should make sure that every key employee is aware of its existence and clearly understands his or her responsibilities should a crisis occur.

Remember that every organization, no matter how large or small, faces significant consequences from improperly handling or responding to a crisis. Given that, it's important to make an investment in planning now to avoid a big problem down the road.

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Cyrus Afzali is president of Astoria Communications, a New York City-based PR consultancy serving clients in financial/professional services, technology and real estate. Before opening his PR consultancy in 2004, Afzali worked at several New York agencies managing accounts for real estate, technology and legal clients. He started his career as a journalist, working as an editor and writer for nine years at outlets ranging from small, daily newspapers to CNN Financial News.

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