By Gerard Braud, CSP, Fellow IEC
The annual wildfire season in California is presenting us with an interesting crisis communication case study. I’d encourage you to follow media reports and listen to what each expert says in those media reports. As we review this crisis, we’ll look at it through the lens of the 5 Steps to Effective Crisis Communications, especially the concept of Step 1 – Your Vulnerability Assessment. (If you are not familiar with the 5 Steps of Effective Crisis Communications, follow this link for a free video tutorial.) Additionally, this crisis is a personification of defining a crisis as an event that affects a company’s revenue and reputation.
Pacific Gas & Electric (PG&E) has been dealing with a financial crisis after facing lawsuits leading from allegations that the company’s power lines may have started past fires that destroyed homes and took lives.
The liability is so devastating that PG&E has filed for bankruptcy. This is the personification of a crisis that is affecting a company’s revenue and reputation.
Now the electric company is fighting criticism because it has been shutting off power in fire-prone areas as a way to prevent fires. This again, is affecting the company’s revenue and reputation.
If you worked at PG&E, how would you manage this crisis? From the perspective of a Vulnerability Assessment, on one hand you have to assess the potential loss of property and lives if a fire breaks out because a faulty power line starts a fire. On the other hand, you have to assess the financial hardship the company is thrusting upon all of the businesses that cannot operate because they have no power.
One farmer showed the media how $50,000 worth of produce could go bad in his farm’s refrigerator unit that was now without power. This story is multiplied in many ways by many businesses, not to mention all of the homeowners affected by the outage.
My guess is PG&E will face a new round of lawsuits from homeowners and businesses that have faced losses because of the shutdown of power.
A further root cause analysis from a Vulnerability Assessment standpoint would have to examine all of the allegations that PG&E has not properly maintained their power lines, transformers, and equipment. Critics allege that failure to maintain the system is the root cause of the deadly fires. Other critics dig deeper, saying PG&E has spent too many years trying to give money to stockholders, rather than reinvesting in their infrastructure.
What do you know about the company where you work? Is it a publicly traded company that prioritizes stockholders over customers? Are there potential crises like this on your horizon? Do you see competing interests that need to be dealt with now, before they reach a flash point?
Your immediate course of action should be to gather your leadership team together and discuss these vulnerabilities before a crisis ignites. A good Vulnerability Assessment may provide a roadmap that allows you to eliminate a crisis before it ignites. If the crisis can’t be eliminated, it allows you to develop a plan to deal with the crisis if it ignites.