SEATTLE -- Bruce T. Blythe got everyone's attention by posing a hypothetical situation: "Let's assume that right now your cell phone goes off, and you were just told that an explosion happened at your workplace. People are hurt. Some people were killed.… What would you do?" Blythe, CEO of Crisis Management International Inc., Atlanta, led more than 20 retailers and a small group of suppliers through the first of many sessions making up CSP's three-day Liability & Risk Forum. He explained that crises of any sort magnify small weaknesses, so it's critical for retailers to increase their [image-nocss] effectiveness in responding to emergencies beyond what he called "standard coping mechanisms." This can ultimately help companies grow the value of the company and protect their core assets.
"I'm going to make crisis management as simple as I can," Blythe said. "It's about identifying your stakeholders, whoever they may be, and addressing their needs and concerns. It's about people.… Maybe you have an IT crisis, but it's really about the people that the IT crisis affects."
He illustrated several examples of crisis leadership. Rudy Giuliani's composure in the midst of the Sept. 11, 2001, terrorist attacks in New York City, and Johnson & Johnson's ability to survive the 1982 crisis in which cyanide-laced Tylenol capsules killed seven people in Chicago, provided examples of good leadership and good decisions. The Exxon Valdez oil spill, about which Exxon waited three weeks to speak to the media, and former Atlanta Falcons quarterback Michael Vick's poor response to dog-fighting allegations, were examples of bad decisions.
"Good leadership is inside out and outside in," said Blythe. "[Johnson & Johnson chairman] James Burke did that. He made the decision to take Tylenol off the shelves in Chicago and the rest of the country. Someone said, 'What about shareholder value?' Burke slammed his hand on the desk and said, 'The next person who talks about money is out of a job'.… People expect you to sacrifice in a crisis."
Crises, according to Blythe, are more about tests of character than tests of skill. In responding, companies must have a vision and be able to communicate it while showing empathy and taking responsibility. Establishing the vision, he said, begins with writing it down: "It helps with cognitive clarity. It helps with judgment. Writing it down helps you make better decisions, especially during chaotic times."
Blythe also advised retailers to have a third-party official who may be more capable of keeping a level head when making decisions or communicating to the media. The biggest mistake any company can make comes with not preparing for the crisis, he suggested, which can leave them flatfooted: "If the house is burning and you don't have any firefighters there, it's going to keep burning."
Retailers should assemble a crisis-management plan ahead of time, to include timelines, the designation of team members and a breakout of individual responsibilities.
The Liability& Risk Forum tackled issues such as Payment Card Industry compliance, food safety, immigration issues and product liability. Steve Burkhart, vice president and assistant general counsel for BIC Corp., Shelton, Conn., underscored the fact that the "landscape has changed" considerably over the past five years. Retailers are more vulnerable to litigation than ever before, often through no fault of their own.
"Controlling who you do business with and controlling what you sell, this is a common theme," Burkhart said. "If you are selling products from a company that consumers can't even identify…then the point of contact is going to be the retailer."
Bob VandePol, president of Crisis Care Network, Grandville, Mich., who followed Blythe in talking about leadership in times of crisis, looked at crisis management more from the perspective of helping employees mentally recover from traumatic experiences in the workplace.
"Under stress, we regress," he said. "When there's a crisis, people kind of turn into little kids looking to Mom and Dad for answers.… How do you help them return to life?"
A one-size-fits-all approach does not apply here, according to VandePol, because not everyone experiences the same robbery, earthquake or workplace heart attack the same way. Each person's disaster is unique to him or her.
The good news is that most people bounce back from the bad things that happen to them. Even New Yorkers in the wake of the Sept. 11 attacks returned to some semblance of normalcy, though some people did display behavior changes afterward. The same applies to the workplace after a robbery or other traumatic event.
"People are tougher than you think," VandePol said. "Apply some psychological first aid and you'll probably be OK.… Nobody works well when they don't feel safe. If you try to create a productive work environment, would you make it as unsafe as possible? No.
"Employees are going through this with or without you," he continued. "Here's your chance to lead them and move these people or organizations past the tragedy.… There's no greater honor or responsibility than being there for someone on the worst day of their life."
He advised retailers to use the acronym ACT when helping employees respond to a tragedy: Acknowledge and name the trauma; Communicate information with competence and compassion; and Transition employees to additional care as a way to help them cope.
While the responsibility of being a crisis manager can seem onerous, the ramifications of being unprepared or making poor decisions can be fatal to a company. Therefore, retailers must plan for crises—not only in responding to the media and fixing problems but also in helping employees move forward—well before they happen.
"As a leader you have to be able to make decisions that fast," VandePol said as he snapped his fingers. "The Monday-morning quarterbacks will have days, weeks, months and even years to judge you for the decisions you made."
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