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Crisis Or No-Crisis, Communicate!

Communication during a crisis situation becomes the most important tool to take things to normalcy and sometimes also helps strengthen current positioning

Communication during a crisis situation becomes the most important tool to take things to normalcy and sometimes also helps strengthen current positioning. On the other hand, active communication during positive events amplifies its impact which is much needed for differentiation.

2015 was a landmark year in the history of Nestle, a Global Fortune 500 company. Not everything was good. Nestle has been present in India for over 100 years now and has a series of brands under various categories like Milk Products and Nutrition (Everyday, Milkmaid), Beverages (Nescafe, Nestea), Prepared Dishes and Cooking Aids (Maggi Noodles, Sauces, Masala) and Chocolates and Confectionery (Kit Kat, Munch, BarOne).  An undisputed market leader in Rs. 4000+ crore noodle market, Nestle's Maggi noodle is a household name. Yet an event shook the market leader when Maggi was declared unsafe and hazardous by the food regulator when some samples revealed excessive lead content. Not only Nestle suffered a massive loss after taking Maggi off-shelf from across India but the entire category sales went down resulting in collateral damage to the industry.

A few years back, Cadbury which has become synonymous to Chocolate and an undisputed market leader suffered a similar fate. The FDA received the complaint about the infestation in Cadbury Dairy Milk bar. What followed was criticism and negative media coverage which brought down the sales drastically.

Communication is the key tool in the time of crisis or otherwise
These two case studies make one thing clear - even if it is a market leader, the crisis can strike anytime and can bring the company or the product brand to its knees. There is no scope for complacency and it is important to build a resilient organization which will be able to withstand such crisis. In both the above cases, Nestle India and Cadbury India, not only overcame the crisis but were also able to strengthen their current positioning. Both of them used communication as the key tool other than taking multiple measures. These case studies were widely covered by media and one can go through them.

Communication not only helps handle bad news but also helps amplify good news
It is important to use communication as a key tool for stakeholder engagement. Irrespective of whether it is a B2B (Business-to-Business) or B2C (Business-to-Consumer) scenario, it is important to have a solid stakeholder engagement and make communication, a continuous process rather than a one-off event. Key stakeholders include customers, shareholders, partners and employees along with various other industry players like regulators, media, advisors etc.

Figure 1 explains the typical journey of stakeholder engagement along with various possibilities resulting from different communication strategy. Every company has a base level of engagement with stakeholders which it is able to keep alive through a communication strategy as appropriate. Yet when a crisis strikes or if there is the major positive event, companies typically take one of the three possible paths.
 

Path A) In a crisis situation companies often go in a state of denial and make defensive statements. They are often scrambling to save their reputation rather than alleviating the concerns of stakeholders. Hence, this leads to disengagement. It is only after they realize that such stance is further damaging the situation, they define a recovery strategy and communication plan and then execute it which may lead to heightened stakeholder engagement.

Path B) Companies are often not prepared in spreading the good news to its stakeholders in a systematic way. They often reinvent the wheel and due to the bureaucratic chain of approvals, the speed of information flow reduces quite a lot. This delays the whole process of heightened stakeholder engagement which can positively impact the company.

Path C) Resilient companies will often be prepared with a communication strategy irrespective of a crisis situation or a positive event. When the blueprint of communication plan is ready, it is the speed of execution which matters. Speedy execution may lead to a heightened stakeholder engagement much earlier than Path A or Path B. This helps yield higher value in case of a positive event as well as early damage control in case of a crisis situation.

 While most companies come back to the base level of engagement, it is the preparedness and speed of execution which makes the company more resilient and agile and makes it a better brand in the eye of stakeholders.

There are 3 things every company need to be ready with to be more resilient

1.    Keep Stakeholders Engaged: Identify key stakeholders who need to be nurtured. Keep a base level of engagement going through continuous communication.

2.    Define a Communication Blueprint and Execution Plan: Define templates/tools that would be leveraged during communication especially during special events. Define scenarios, identify stakeholder behaviour expectations under various scenarios and an execution plan for every scenario. This will increase the speed of information flow and faster and effective communication.

3.    Build a Communication SWAT team: This team should be the front face of the organization in various scenarios and should be trained to execute the communication plan leveraging the blueprints. Identify the key skills needed and ensure this team is accountable for the base level of stakeholder engagement and can quickly transition to a SWAT team in case of an event.

Richard Branson in one of his blogs has quoted Brian Tracy, celebrated public speaker and self-development author - "Communication is a skill that you can learn. It's like riding a bicycle or typing. If you're willing to work at it, you can rapidly improve the quality of every part of your life". This quote can be easily extended to the context of an organization.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Rahul Gupta

Rahul is passionate about Strategy and Change Management. He has around 15 years of experience in Management Consulting, Business Transformation and driving Strategy and M&A across multiple industries, business domains, technologies & geographies. Rahul holds an MBA from XLRI and is a Gold Medalist in Engineering from Jadavpur University

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