Responding to the organisational crisis facing the ALP

March 29, 2012

What can brand management and situational crisis communication theory do to help us understand and respond to the endemic crisis facing the Labor Party.

Labor in Crisis?

Firstly, is the ALP facing an organisational crisis? Certainly, most Canberra Press Gallery commentators think so.

The literature helpfully defines an organisational crisis as:

An organizational crisis is a low-probability, high-impact event that threatens the viability of the organization and is characterized by ambiguity of cause, effect, and means of resolution, as well as by a belief that decisions must be made swiftly.

This certainly looks like the dilemma facing Labor. The key is ambiguity. The uncertainty and ambiguity surrounding a crisis creates pressures for explanation of why the crisis is occurring, and makes determining the actions necessary to resolve it very hard.

Typically in an organisational crisis situation, the organisation does not know the cause, and may not be aware of that it is facing crisis for some time. Most crises of these nature happen in the context of multiple simultaneous occurrences — that is, there are lots of crises happening at the same time, and more often than not, they will set off chain reactions of other crises. These organisational crises interfere with the organisation’s normal operations, attract external, particularly media, attention, and will escalate if not handled correctly.

In the literature, there is also a thing called a double-crisis or a communications-crisis.

A double-crisis is a crisis, where the original crisis is superposed by a communications-crisis, as the organization fails in managing the communication processes that should have contributed to the handling of the original crisis.

In this context, the crisis is perceptual. It is the perception of an organisation’s stakeholders that help define an event as a crisis. If the “stakeholders believe that an organisation is in crisis, a crisis does exist.”

The collapse in polling for Labor across Australia at a state and federal level is perceived to be a crisis. Multiple events have contributed to the ongoing crisis: the Rudd-Gillard coup and counter-challenge; the Australia Day fiasco; the continuing asylum seeker boat arrivals; the failure of the Malaysia “solution”; and at a state level, the scandal-ridden NSW Labor government, and the catastrophic loss for Labor in Queensland. Etc, etc.

There is also a lot of ambiguity in Labor’s ongoing crisis. Although everyone (including me) have pet theories, the reality is that there is no single, clear cause for the crisis. There is significant pressure on Labor officials to explain the crisis, but no adequate explanation exists — which obviously makes taking action hard. Labor has defaulted to taking no action, as the recent national conference demonstrates, with the failure to implement reforms.

Even if the polling for Labor wasn’t as bad as it currently is — for example, under Rudd, the ALP’s polling was nowhere near as bad as now — the perception of crisis is real. ALP supporters believe there is a crisis. Voters do. The media certainly does. After the Queensland election, I’m sure federal Labor MPs do as well.

What is crisis management?

Luckily for the Labor Party, crisis management is a very well researched topic. Crisis management is “strategic planning to prevent and respond during a crisis or negative occurrence” with the objective of reducing risk and uncertainty. The idea is that by having the right plans in place before a crisis occurs, damage to an organisation can be minimised.

A consistent notion in the crisis management literature is that crises have identifiable life-cycles or stages. The most influential staged model, created by Ian Mitroff, consists of five phases: 1. Signal Detection, 2. Probing and Prevention, 3. Damage Containment, 4. Recovery, and 5. Learning.

Signal detection is the idea that almost all crises have early warning signals, and that if an organisation can detect and act on those signals, then the crisis can be prevented. Obviously, Labor is past this phase.

Probing and prevention takes place at the same time as signal detection, and aims to prevent the crisis from happening. Again, Labor is past this phase.

The goal of damage containment is to contain the effects of a crisis from spreading further and, hence, from infecting other uncontaminated parts of an organisation. Given the collapse in Queensland and New South Wales, the dire polls federally and in South Australia and Tasmania, Labor is at the limits of damage containment.

Recovery is the phase where the organisation tries to return to normal operations as soon as possible. This is the phase that the New South Wales and Queensland Labor parties are in (arguably, this is also where federal Labor is). Recovery is important in organisational crisis management because it is intended to reduce the number of customer loss. In politics, this roughly translates to political supporters and party members.

The last phase, learning, refers to the process of reflecting upon what was done well and what was done poorly. I suspect that political parties, as much as most organisations, find learning particularly difficult. This is exacerbated by the fact that the causes of the crisis are uncertain and contested.

(There is also another popular crisis management model, created by Tim Coombs, which goes by the broad categories of pre-crisis, crisis and post-crisis. Each category has a number of phases that broadly reflect Mitroff’s phases.)

In all versions of crisis management theory, it is crucial that organisations consider how they will be perceived and laballed by the outside world. For political parties, and the party of government in particular, this is more than crucial. Successful organisations during a crisis are those that “communicate openly and accurately to their multiple audiences immediately after a crisis occurs.”

A key part of crisis management therefore is crisis communications. The literature defines crisis communication as “the dialog between the organisation and its publics prior to, during, and after the negative occurrence”. Successful crisis management includes crisis communication that not only resolves the crisis, but also improves the reputation of the organisation. The previously mentioned Coombs states that crisis communications “is the lifeblood of the entire crisis management effort and plays a vital role in all stages of crisis management”.

The standard recommendations for crisis communications are to be quick, consistent and open; it is essential to tell your own story, to tell it all and to tell it fast.

Situational crisis communication theory

Invented by academic Tim Coombs, situational crisis communications theory is an attempt to understand, to explain, and to provide prescriptive actions for crisis communication.

StrategySubtype 
Nonexistence StrategiesDenial
Clarification
Attack
Intimidation
Distance Strategies Excuse Denial of intention
Denial of volition
JustificationMinimizing injury
Victim deserving
Misrepresentation of the crisis event
Ingratiation StrategiesBolstering
Transcendence

Praising others
Mortification Strategies Remediation
Repentance
Rectification
Suffering Strategy

The non-existence strategies aim to eliminate the crisis through trying to show that there is no link between the crisis and the organisation.

Denial is the simple statement that nothing happened, while clarification also attempts to explain why there is no crisis. Attack implies confronting those who wrongly report that a crisis exists, and intimidation involves threats to use organizational power against some actor such as lawsuits and physical violence.

Distance strategies acknowledge the crisis, publicly accepting the crisis while trying to weakening the link between the crisis and the organisation.

Excuse tries to minimize organizational responsibility for the crisis by denying intent and/or volition. Justification seeks to minimize the damage associated with the crisis. The organization attempts to convince publics that the situation is not that bad, perhaps by stating that the crisis is not as bad as similar crises. Justification tactics include denying the seriousness of an injury, claiming that the victim deserved what happened, and claiming that the crisis event has been misrepresented.

Ingratiation strategies are when organisations try to gain public approval by linking the organisation to things with positive associations.

Bolstering reminds publics of existing positive aspects of the organization. Transcendence tries to place the crisis in a larger, more desirable context. Moreover, praising others is used to win approval of the target of the praise.

The mortification strategies attempt to win forgiveness of the organisation’s publics and to create acceptance for the crisis.

Remediation willingly offers some form of compensation or help to victims. Repentance involves asking for forgiveness and apologizing for the crisis. Rectification involves taking action to prevent a recurrence of the crisis in the future.

The final strategy is the suffering strategy, which tries to win sympathy from the organisation’s publics by portraying the organisation as an unfair victim of some malicious, outside entity or circumstance.

The crisis response strategies to use are determined by the type of strategy (the situation). Coombs categorises a range of crisis types, broken into three main types or “clusters”: 1. Victim clusters, 2. Accident clusters, and 3. Preventable clusters.

Crisis clusterCrisis typeDescription
Victim clusterNatural disasterActs of nature damage an organisation such as an earthquake
RumorFalse and damaging information about an organisation is being circulated
Workplace violenceCurrent or former employee attacks current employees onsite
Product tamperingExternal agent causes damage to an organisation
Accident clusterChallengesStakeholders claim an organization is operating in an inappropriate manner
Technical-error accidentA technology or equipment failure causes an industrial accident
Technical-error product harm A technology or equipment failure causes a product to be recalled
Preventable clusterHuman-error accidentHuman error causes an industrial accident
Human-error product harmHuman error causes a product to be recalled
Organizational misdeed with no injuries Stakeholders are deceived without injury
Organizational misdeed management misconductLaws or regulations are violated by management
Organizational misdeed with injuriesStakeholders are placed at risk by management and injuries occur

The type of crisis also determines all kinds of things, reputational threat, as well as “attributions of crisis responsibility”. Similarly, “crisis history” has a strong influence on the organisation’s reputational damage — that is, if the organisation has suffered from similar crises in the past, they’re likely to suffer more damage to their reputation. Simply, a history of crisis suggests “an organization has an ongoing problem that needs to be addressed”.

Research has shown that unfavourable relationship histories and crisis histories leads people to perceive the organisation as having more responsibility for the crisis. This is called the “velcro effect” — “it attracts and snags additional reputational damage”:

The results from these studies indicated that when an organization had a history of crises or a negative relational reputation, a crisis which originally was considered a mild reputational threat moved to the moderate threat level, and a crisis originally considered a moderate reputational threat moved to the severe threat level.

Because it affects reputational threat, the previous actions of the organisation alters what kind of crisis response strategies are appropriate. The research supports the idea that a negative performance history should see crisis managers selecting strategies that accept greater responsibility and demonstrate increased concern for those affected by the crisis (the “victims”) than would normally be the case.

Clearly, the case of the ALP, there is not only an ongoing crisis, but Labor could be a poster child for the “velcro effect”. Each media crisis, whether pink batts, Australia Day or another boat arrival adds to the sense of crisis, reputational damage and a sense of growing culpability (“responsibility”).

The crisis response strategy guidelines

The standard crisis response strategy guidelines are as follows:

  1. Instructing and adjusting information alone can be enough when crises have minimal attributions of crisis responsibility (victim crises), no history of similar crisis and a neutral or positive prior relationship reputation.
  2. Victimage can be used as part of the response for workplace violence, product tampering, natural disasters and rumors.
  3. Diminish crisis response strategies should be used for crisis with minimal attributions of crisis responsibility (victim crises) coupled with a history of similar crises and/or negative prior relationship reputation.
  4. Diminish crisis response strategies should be used for crises with low attributions of crisis responsibility (accident crises), which have no history of similar crises, and a neutral or positive prior relationship reputation.
  5. Rebuild crisis response strategies should be used for crises with low attributions of crisis responsibility (accident crises), coupled with a history of similar crises and/or negative prior relationship reputation.
  6. Rebuild crisis response strategies should be used for crises with strong attributions of crisis responsibility (preventable crises) regardless of crisis history or prior relationship reputation.
  7. The deny posture crisis response strategies should be used for rumor and challenge crises, when possible.
  8. Maintain consistency in crisis response strategies. Mixing deny crisis response strategies with either the diminish or rebuild strategies will erode the effectiveness of the overall response.

Crisis response and the ALP

The ALP’s response to the organisational crisis it is facing obviously should be determined by the kind of crisis it is facing. Needless to say, this is a judgement call. For example, are the ALP victims? Are the crises policy “accidents”? Were they misdeeds? A combination? For example, the arrival of asylum seekers could be the equivalent of “product tampering”, while the pink-batts could be part of the accident cluster. Whatever the crisis, the response should be consistent. I’m sure you can imagine link the appropriate crisis response with the relevant crisis cluster.

Can all this crisis management guidelines be of any help to Labor?

I’ve argued before that a serious problem for Labor is that “our preoccupations are too often with internal organisation, with sleeker, more technological electioneering, with better spin and media management”.

Is the problem not that Labor can’t handle a crisis, but that it’s preoccupation with crisis management means that it is unable to lead?

[hr]

Key reference: Coombs, Crisis Management and Communications


Comments

  1. Walter Adamson - April 17, 2012 at 12:27 pm -

    You certainly analysed the process from top to bottom. I think that a fundamental weakness of the current ALP is that they lack any social presence and in particular the acquisition and interpretation of any social presence value, as explained here in my post:

    Why building Brand Breadth is important for Crisis Management

    http://igo2group.com/blog/why-brand-breadth-crisis-management/

    Walter @adamson

    • Alex - April 18, 2012 at 5:12 pm -

      Thanks Walter — in my view, brand breadth works to the detriment of the ALP, which has “diversified” in terms of “brand categories” (i.e. policy areas) in the last 20 years and diluted its strengths. But I agree with your point about social presence — ie. hollowing out of party membership.

      • Walter Adamson - April 18, 2012 at 5:49 pm -

        Hi Alex, we’re battling with jargon here! Brand breadth in my context is about how the core brand engages across the “new” breadth of social, whereas you interpreted it as meaning brand dilution – a different topic.

        • Alex - April 18, 2012 at 7:28 pm -

          Hi Walter — thanks again. I did take “breadth” to mean “diversification”, which in my view is a bad move.

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