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When becoming part of someone else’s crisis is the right business decision

July 18, 2012 by Jonathan Hemus

When you’re affected by a major crisis, but not at the heart of it, you may be tempted to keep your head down and hope that no one notices that you’re involved.  So I was interested to read in IR Magazine how GE took an alternative approach when responding to the Fukushima nuclear disaster.

GE built and supplied the nuclear reactors for the plant and after the initial focus on the human tragedy of the event, attention quickly turned to how GE’s business might be affected.  As well as providing technical and humanitarian assistance to those affected in Japan, GE decided on a crisis communication strategy designed to fill the information vacuum.

Trevor Schauenberg, GE’s head of IR, quoted in the article said: “We were very responsive and stayed up all night whenever we needed to, to respond to our global investors”.  The company also enlisted third party experts to confirm GE’s limited vulnerability and continued to issue its own regular updates.  Soon, GE’s messages were being repeated by the likes of Citigroup and Barclays, and value which was lost in the immediate aftermath of the incident began to return.

GE’s successful crisis communication strategy once more demonstrates the value of a swift and expansive response (and echoes the findings of Oxford Metrica’s latest research into the impact of crisis communication on business value).

But it also highlights the judgement that must be shown when deciding whether or not to engage in a crisis which is not entirely your own.

Major crises like Fukushima are rarely one day new stories, and days two, three and beyond will be when the media – and other stakeholders – explore the broader ramifications.  If your organisation could be part of this follow up, the least you should do is gear up to respond to incoming questions and provide your staff with the means to do so.  And if you’re as directly affected as GE, then a decision to go pro-active will almost certainly be necessary.

Handling your own crisis requires fine judgements: deciding when and how to become involved in somebody else’s crisis can be even more challenging.  But as GE showed, communicating more rather than less can be the right thing to do, however uncomfortable it may feel at the time.

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