"We have a problem." No other words have such power to send a shiver up the spine of a manager. But it is at this very moment that people in positions of authority must rise to the occasion and deliver their best. Certainly many dramatic examples in the business world lately have shown how embattled corporate chiefs should respond to a company embroiled in crisis. Think Ken Lay, HP's Carly Fiorina and former Andersen chief executive Joseph Berardino. Leaders must acknowledge that communication is one of the critical components of an overall emergency-response plan, whether it's a matter of handling an operational crisis such as a well blow-out or underground storage leak, a kidnapping overseas, an act of war or nature, or a crisis brewing in the financial markets. During a crisis, an executive must take several high-priority actions before communicating with any public, including the media. First, get the facts of the situation confirmed internally. Second, formulate a clear, yet flexible, message-don't just react off the cuff. Don't speculate. Third, evaluate staffing needs and assign specific tasks to the appropriate people (all of whom should have been designated and trained to handle crisis situations). Finally, keep focused on those who are affected most directly by the crisis and consider the implications of the situation. How would I feel if it were me? What is the best way to present information to these particular people? When you're ready to communicate, keep in mind that doesn't always mean reaching the media first. Depending on the situation, communicating with employees, shareholders, the community or government officials may be more essential. When encountering a crisis there are a number of objectives: protecting the safety of all the people who are affected; minimizing damage to the environment and wildlife; working with officials and the emergency-response community to coordinate an effective response; and maintaining accurate, responsible communication. Typically there is a great deal of confusion, your adrenaline is running and the media and other observers are questioning and speculating over your every move. Know that you cannot stonewall the media, ever, and certainly not at this time. A good defense The best way to handle a crisis is to have two things already in place: effective, established communications links with all constituencies, and a crisis-communication plan that is part of an overall emergency-response scheme. "We are very quick, very open and transparent in all of our dealings, whether financial or operations," says Teresa Wong, manager, public affairs and corporate communications for Houston-based Anadarko Petroleum Corp. "We offer a lot of information on our company, and make it available on the web site. I think that carries over into a crisis situation. We have wonderful relations with communities all over the world; those people know us. It's important because we work and live in those communities." This "reservoir of goodwill" is especially important for higher-risk industries such as exploration and production. Planning is the most critical component, says Vince White, Devon Energy Corp.'s vice president, communications and investor relations, Oklahoma City. "It's important to already have a reservoir of goodwill established. When crisis response is at its best, you're drawing on your goodwill and replenishing the reservoir of goodwill as well. [Companies] need to have preexisting relationships and already have a basis for credibility with all constituencies: employees, investors, emergency-response teams and the community. "Being a good corporate citizen well in advance of the crisis will result in receiving the benefit of the doubt when a crisis does happen." (For details on how Devon interacts with communities in northeast Texas, see "Reaching Out to Communities," Oil and Gas Investor, March 2002.) War-room mentality Given today's media environment, successful communication in a crisis is possible if one adheres to these guidelines: be fast, be sure, and use the Internet. The executive spokesperson (or previously designated onsite field personnel) should be prepared to make a statement within the first few hours. If it's a very involved situation, as it often is, the executive can at first deliver a prepared paragraph or two explaining the situation in general terms, and advise the media, employees, and others that subsequent, more detailed briefings will be made as soon as more information is available. The second briefing should be made quickly, certainly within eight hours. Communicators should adopt a "war-room mentality" and schedule. Just like the federal government does in times of crisis, corporations should have daily morning and afternoon briefings as warranted. This is especially true today since any crisis has the potential to be a terrorist act. "With the added concerns of September 11, it's critical to have the systems in place to provide as much information as possible, as quickly as possible," says Charif Souki, chairman of Houston-based Cheniere Energy. "Our responsibility is to alleviate any concern the public might have and to comply with appropriate agencies." By responding quickly to the situation, the company takes control of it. When first communication is not done in a timely manner, speculation, rumors and mayhem can quickly result. Corporate leaders must be certain of the facts. Although it is critical to respond quickly, it is equally important to have all the information confirmed internally first. This is especially important when responding to sudden crises, when too often executives talk too fast and too soon. As with all effective communications, formulate three or four simple statements about the crisis, and use them throughout any interview, e-mail or other communication with constituencies. In today's fast-paced communications environment, it is imperative to use the Internet. It is one of the best tools for quickly spreading information to the media, investors, staff and those affected by the crisis. At the very least, all press releases and background material pertaining to the crisis need to be posted quickly with an easily spotted link on the corporate homepage. Being able to respond quickly via the Internet shows concern and care. More important, you control the story and become a valuable resource for the media and the other constituencies affected. Another advantage of a web site kept up-to-the-minute in crisis situations is that it takes pressure off corporate leaders. The human face But having an Internet crisis-communications page or site is one thing; the corporate human "face" on the situation is another, and one that needs careful handling. Devon Energy trains its field people to give very preliminary statements if a crisis happens on location. Designated spokespersons are authorized to give a very general description of what occurred and then refer the media to the corporate-communications and investor-relations team. The corporate spokesperson to be chosen depends on the severity of the crisis (and availability). For relatively minor crises, it could be the field person, or a country manager. For situations with far-ranging implications, such as a major spill, the chief executive officer should be in the front spot. Executives should work as a team and decide who are the most logical spokespersons for each of the company's constituencies. A lot of corporate leaders have difficulty expressing sadness and concern in a genuine way. But if you can do so, it can make a big difference. Remember: you need to put yourself in their proverbial shoes, the constituencies that have been adversely affected by the crisis. The CEO (or other upper management) should make an appearance on-site or at a quickly arranged press conference as soon as possible to express the views of the corporation as well as his or her personal sadness and concern. Then he or she should get out of the way. For field incidents in the E&P industry, the best spokespersons often are environmental, health and safety team members. According to Anadarko's Wong, "You need to have qualified environmental, health and safety people in every location where you operate. We have people in those areas, as well as public affairs people in Europe, Calgary and Uxbridge [a London suburb from where the company manages its Algerian operations]." It is important that the CEO first introduce the specific person with the background and experience to deal with the crisis on an operational and communications basis. In the case of a spill, the environmental, health and safety executive should speak; if it was fraud or some other fiscal problem, the chief financial officer should speak. Utilize the corporate-communications executive (if one is on staff) to field media questions. And remember, titles lend credibility and you want that in times of crisis. Use your top guns. "In the case of a severe crisis, we would activate a news media information center near the site," says Devon's White. "We would come up with a statement by the company and give updates as additional information is available on an ongoing basis. Immediately we would provide the media a trained point person even before they arrive on scene." By taking control early, corporate leaders can better manage a crisis situation, minimize damage and communicate effectively with all parties affected. What you do in the first 24 hours is crucial; what you do in the first couple hours is critical. Study how your counterparts deal with these situations. Have a plan in place and review it annually. Build up your crisis-management program now with effective public and media relations to build your reputational assets. Different answers In times of crisis, companies should be sensitive to the needs of all constituencies, including investors, who want to know the hard facts about the incident. They also have other questions. Is the company adequately insured? Will business be disrupted? How long until a return to business as usual? What are the immediate and long-range financial effects? The most common method of real-time communications with investors is by distributing press releases via e-mail, fax and the wire services. "If we thought there would be a high degree of concern among the investment community," says Devon's White, "we would hold a conference call with that community, typically a webcast. We would give advance notice to the investors, probably as part of the press release itself. A link would be set up at the [web site] home page to take participants who were not able to dial in. "In a time-sensitive situation, almost by definition, the news you're putting out is going to be material. If it requires a hastily prepared response, it's important to get it out. It's also important to follow securities laws and rules and properly disclose." White uses the web site as an ongoing source of information via posted press releases. M Susan Roush is a partner/director of media relations for Market Development Consulting Group, www.mdcgroup.com, specialists in oil and gas investor- and public relations, and based in Denver and Los Angeles. She is a former editor of multiple national consumer magazines and former newspaper reporter.