On this episode of Consulting Success, I’m joined by Jonathan Bernstein of Bernstein Crisis Management. Jonathan is the author of “The Manager’s Guide to Crisis Management,” a great book that provides the basic skills and knowledge to deal with the crises that inevitably occur in any business, no matter the size. At first I wasn’t sure if crisis management really applied to consultants, but Jonathan quickly proved otherwise. He describes crisis management as the “art of avoiding trouble when you can, and reacting appropriately when you can’t.” This wisdom doesn’t only apply to big businesses — crisis mode can hit anyone at anytime. On this episode you’ll learn more about the benefits that come with preparing ahead of time for any crisis that may come — and how to handle it smartly.
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Preparing for crisis before it hits can protect your consulting business from everything from criticism to collapse.
A Consultant’s Guide to Crisis Management with Jonathan Bernstein
I’m really happy to be doing this interview with Jonathan Bernstein of Bernstein Crisis Management. Jonathan is also the author of the recently released Manager’s Guide to Crisis Management published by McGraw-Hill. Jonathan, welcome.
Thank you very much, Michael.
You’re the President of Bernstein Crisis Management. What is crisis management? To me it sounds pretty serious, but what does it actually mean?
There are actually a number of different types of crisis management. This type I work in is a specialty of public relations that’s focused on helping organizations ideally to prevent crises from happening, or in the event that they haven’t been able to help and then respond to crises in every way, both operationally in terms of business continuity and the ability to continue to maintain your organization’s function, and also in terms of communication with all of your stakeholders, internal and external. The best analogy really is firefighting which everybody’s familiar with. There are really two major elements to fire departments where part of it is prevention and the fire inspector will go around and say, “If you move this barrel over there, you’ll have a lower thread.”Then of course, there’s the firefighters who go out and put out the flames and do their brave work. The people who actually save the most money are the fire inspectors who quietly go about and help prevent crises from happening in the first place.
Are you more the inspector or do you deal with all of them?
My business is pretty much 50-50 between those two. Sometimes the phone call is, “The fire’s burning, help us put it out.” Just as often is we’d like to do crisis vulnerability assessment, we’d like to do planning, we’d like to do training. The plethora of crises in the news in the past ten years in particular have really woken up organizations, boards of directors to the need for crisis management. The demand for prevention services which used to be very low, say, fifteen years ago has really rocketed in the last five years.
Who actually needs crisis management? Is it only for large companies or do crisis affect consultants and independent professionals as well?
Ironically, it’s the organizations who often probably have the hardest time coming up with a budget for it that need it the most. If you’re a $5 billion or $100 billion corporation, even with those horrendous crises they had with the Gulf spill, they have the deep enough pockets to weather. A smaller organization does not. A significant crisis can just knock it out of business. A crisis is anything that is serious. It can be one of several things or a mixture of them. It can be a serious threat to your reputation. It can certainly be anything that’s a threat to life, land and property, anything that in any way undermines the value of the organization financially. All of those things or any combination of things like that can happen, and they interact with each other because, for example, the fourth category is serious business interruption. If you have a serious business interruption but you communicate effectively, you’ll have less of a crisis. If you don’t, you’ll have more of a crisis. The different components of what constitutes a crisis interact with each other, and how you respond makes a difference as to whether you have a two-day crisis or a two-year crisis.
A crisis can affect a company of any size, whether it’s a sole person or a few employees or hundreds or thousands or tens of thousands of employees. It’s not so much the number of employees or the size, it depends. The more people you have, the more potential risks there could be. Any business that’s connecting or has an interaction with customers or different industries or whatever it might be has the potential to face some sort of a crisis. Is that correct?
That’s correct. My business just faced a five-day power outage here in Southern California due to high winds. If I don’t have contact with my clients, I don’t make any money. As a crisis manager, I would be expected to be able to have backup plans. Imagine what would’ve happened if I had not been prepared and then not been able to continue business in some way despite the lack of power.
Did you have a good backup plan? You always hear that analogy of the children of the shoemaker, how they go without shoes. Did you have good planning for yourself?
I did but I also identified the vulnerability in my planning. I have redundant Wi-Fi access. I’ve got mobile hot spots. As long as I can power up devices, I’m good. I have the ability to power devices from my car. You can go outside of the affected area and go to a coffee shop and plug in and charge up there. That’s for the most part what I did. What I realized I should have had and didn’t, and I recommend this for anybody, is a device that allows you to plug in to a car, and then charge any AC device. Any device that has a plug in can be charged directly from your car. I’m looking right at a lovely device from Duracell that I paid $50 for at Amazon that will allow me to do just that. There’s 175 watts of power.
You’ve said crisis management is more of an art than a science. Can you tell me why? My initial instinct would put me to think that handling a crisis and crisis management is very much a science. There must be some formula and steps that you take. You said it’s a bit of an art, so what’s the thought on that?
If it was a science then there would be concrete steps that anybody could follow. If you just do these steps, you’ll produce the correct end product, like putting together a medication or putting together a batch of hydrochloric acid or whatever you’re going to do in a science lab. If that was so, nobody would need me. There’s a tremendous amount of intuition and creativity involved in effectively managing a crisis. While there are certain steps that need to be followed, being able to both anticipate what’s going to happen next and properly prepare for it is an intuitive process. That’s where I draw the analogy with what an artist does. It is a creative process as well as a step by step methodology or process. If you tested people in my profession on one of these standard psych testing, you’d find very high scale of intuition score.
It’s not a cookie cutter, straight forward process all the time. You have to be open to a lot of other things and be creative in your approach depending on what the crisis might be. How did you get into this business? Was it right out of school? Did you decide in university or high school, “I want to be in crisis management?” How did you get to where you at?
In hindsight, synchronicity. I had three careers. First of all, I was a child of the 60swhich was absolutely directionalist at that point. In 1969, high school graduate, I went to university initially because that’s what my parents expected me to do, but I was lost. I change my scholastic majors four times in a year and a half. I just didn’t know what I wanted to do and dropped out of school. I didn’t start out with a particular direction. I ended up getting married very young and started my first career just in my late twenties in the US Army. I was an oxymoron. I ended up in military intelligence. I ended up spending five years doing it because I enjoyed the work. It’s where I learned initially how to assess vulnerability. In this case, we were assessing the vulnerability of the enemy which was the Big Red Machine. It was the Soviets and the Chinese and so on at the time in the Cold War days. I also learned how to anticipate our own vulnerabilities and how to plug the holes in our vulnerabilities .
How did you go from being in the army to deciding that you wanted to be in the field of crisis management and public relations?
While I was in the service, I was a great fan and reader of a very famous investigative reporter and columnist by the name of Jack Anderson who worked out of Washington, DC. I decided initially how I wanted to become an investigative reporter. I contacted him and landed a job with him immediately coming out of the service. I’d also completed my degree while in the service in speech communications, but I thought at that point what I wanted to do was journalism and in fact that’s what I did for another five years. How a lot of people got into the field of PR back then was out of journalism. I got a PR job at ’82 that threw me into crisis with my first employer who was Playboy Corporation. They had a lot of bad news in their first year and I found myself adept at handling that. I can volunteer for that type of work when I went over to PR agencies after Playboy laid me and half of their workforce off. By 1989 at PR agencies, all I was doing full time was crisis management and then I ran the international firm head on and meet a way to start their first crisis communications group at ’89 and I ran that to ’94 and decided I wanted to start my own consultancy.
You’re in the army and once you decide to leave the army, you contact this guy. This was Jack Anderson you mentioned?
Did you have any contact with him before or were you just reading his stuff and decided to contact him? What transpired here?
I got a hold of this unlisted home number because being an intelligence, I had access to information like that. I called him up and I said, “Jack, I am Jonathan Bernstein with the US Army Intelligence Agency and I’d like to speak to you confidentially.” He thought I had a leak for him so we then met in his Potomac, Maryland home and I said, “Jack, actually I don’t have a leak for you though my knowledge of the Intelligence will be helpful to you. I’m getting out of the service in three months and I’d like a job.” He said, “You’re hired.” That’s how that happened.
It sounds almost like you scared this guy into meeting you or maybe excited. That’s a big step and that’s wonderful because I’ve always been someone that when I have someone that I view as a mentor or look up to or I believe that I can learn from, I reached out to them and I always encourage other people to do that as well. There’s a level of fear that a lot of people face when they consider contacting someone. They might read a book, an article, or see something on TV and think, “That’s great. They’re amazing. I wish I could learn from them, but obviously I can’t. They’re too busy, successful, whatever it is for me.”
I had people reach out to me like that professionally, young people interested in getting into the field or related field, and if they do it with a combination of chutzpah and politeness, I respond. I have taken lunch times and times on the phone to talk to people because I believe it’s part of my responsibility to pass on my knowledge. I’m 60 years old now. I don’t need to do this full time the rest of my life. There is another generation coming up behind me, including my son. I’m interested in passing it on. You have to approach people. You have to study your subject and know what will work for them.
You’re not as open to someone saying, “Connect with me on LinkedIn, no personalization. Let’s just get to know each.” That doesn’t work. They need to actually spend a bit of time learning about you, reading your website, showing that they care and that they understand.
It’s the same thing pitching a reporter for a story if you’re pitching at FDR 101. You have to research the reporter and know something about them. Nothing impresses a reporter more than being pitched on to something they obviously had no interest in covering. Customizing the pitch, whether it’s a job pitch or immediate issue is always critical. I encourage people to do your homework. In this part of crisis management, too, I need to study if my client has an opponent that’s causing them problems, criticizing them online or whatever. I need to study the opposition and understand what pushes their buttons.
You mentioned that you were working for Ruder Finn, Inc. which is a very large public relations firm and that they tasked you with the job of creating their crisis management division. In 1994, you left that company to start your own business. You now pretty much act as a consultant, as an advisor to other firms. What made you choose back in 1994 to go out on your own to leave this world-renowned company to start your own business?
I concluded both from my military experience and from my PR agency experiences that at the end of the day, I don’t play well with others. That’s just me. I can do it very well for a limited period of time, hands on, client contact, and so on. I don’t do well in large organizations with bureaucracies and reporting requirements and so on. I’m not cut out for it. I recognized that I was going to, at some point or another, step in it more than usual and cause myself problems in that environment. Also the fact that I had an almost three-hour round trip commute everyday to go to work motivated me to want to commute mostly from my bedroom to my office, which is what I’ve done in the last seventeen plus years. That was the motivation. I was willing to take the risk. I did ask my existing clients, “Are you working with me because you want to work with me or you’re working with me because we’re Ruder Finn?” Their answer was fortunately it was because you’re you and I didn’t have a non-compete. Some business but the nature of crisis management work is while you may have ongoing clients, they only have active work for you periodically. I did come out with some business, but I had to learn how to do business development.
When you went out on your own, what was the biggest challenge that you faced? You had some clients that you’re able to get started with, but what was the biggest fear or challenge that you first encountered? I know we’re going back now a few years, but if you think about that time, what was the biggest challenge for you?
I already had a good network, but I knew I needed even much bigger and much better network in order to guarantee a steady enough stream to pay the mortgage, so getting that going effectively through a combination of internet-centered activity. I’m a proudly a nerd. In fact, one of my clients is great in the market crisis. He calls me an Alpha nerd and I’m very pleased with that title. I’ve been online for a long time for over 30 years. I was one of the earliest people in the PR profession actively using the internet for business development and research as of 1982.After browsers came around for business developments, I put a website up and started a newsletter very early in my own consultancy. I also started providing a virtual business before that term was coined, meaning that I’m eighteen. I’d take my deck of cards of great consultants and I call on the right consultant for the right job. I put together teams of people as opposed to the agency approach, and we have one top person at a bunch of less experienced people on the team. As the internet developed, that just became easier and easier to do expansion to social media. In fact, the expansion of the internet enabled me to pretty much stop doing some of the things I used to have to do a lot which was go out to conferences and do speaking engagements, for example. That isn’t nearly as effective for business development as a strong internet presence.
Crisis isn’t always predictable. Generally, when you think about doing business development, it’s around selling a service or a product that people have a need for currently. There’s obviously life insurance and things like that, but how do you actually sell your services to a client if they don’t know that they are going to need those services?
95% of my new business comes from my website. If you do a crisis management assertion, I’m doing it as we speak. One of my blogs just do the search top crisis management and there’s 24,900,000 results for the terms “crisis management.” One of my two blogs has the number three position on page one of Google. My website has the number five position. They find me as the answer. They’re looking for somebody and the first consultancy they find is mine. I got a call and even if they end up going calling others, at least I’m included immediately for consideration.
The majority of your business isn’t necessarily pitching to people that don’t know they need crisis management services. It’s people already have identified that they need those services or they may need some assistance or they’re assessing it or evaluating it and they’re doing the research. They’re coming to you because you’re taking the time and you’ve done so much for many years to build your credibility, to build your authority, to establish yourself as a thought leader in that area. Some people just find you.
Partially, yes, and actually, most of the case. However, I do use outreach through my education. My newsletter constantly talks about different crisis management principles and practices. It has a good subscription base. My blogs constantly talk about it. They have a good viewership, and my publications, my original Keeping the Wolves at Bay and the newest one, The Manager’s Guide to Crisis Management. If you’re under somebody’s nose and constantly educating and then when their threshold of awareness raises to the point of, “That’s a good idea. We should do plan and training,” who are they going to call? They’re going to call a person who raised their wants.
That’s something I always recommend as well and the whole focus on education through marketing as much more effective than just marketing through pushing anything with that.
When business had been slow, I’ve done cold pitching to various industries and so on. It wasn’t a really good list sometimes but the rate of return is extremely well.
How is your business doing right now? Has your business been able to provide you with what lifestyle hasn’t been able to provide you with?
I live in one of the nicest communities in Los Angeles County, a good size home on a good-sized piece of property. We just came back from a two-week Costa Rica vacation which, when you’re self-employed, taking a two-week vacation without working is a luxury. If the answer is very good one, that said there had been tough years. There has been this ups and downs. If you had to chart it, certainly a line would go upwards on a curve. This last year was 50% better than the previous year and the best year in my seventeen years in business.
How many years back would you have to go to hit one of those years that was really challenging?
At that point you were in the business for twelve years, but you had a really tough spot.
We upgraded our home. We moved to a more expensive home, and we needed more space. Just one of my son moved back in with me from a previous marriage. We moved at the top of the market here in California and at the tide of the economy. We bought a fairly expensive place with a bigger mortgage. Then the economy tanked in the real estate market, both of course related to each other. During that one to two year period, there were definitely months where I thought I was going to have to call a mortgage company and say, “We can’t pay this month.”Our credit card bills got way up. It’s like that. It was tough. Also my client base cut off what they perceive to be elective work which is the preventative work, the training and the planning, and so on. A breaking crisis was still a breaking crisis and I would still get those calls. I took about a 30% overall reduction in income for almost two years. My lifestyle had been keyed to the higher level. That combination of circumstances was a lesson necessary pin prick to my ego or my over-optimism because I tend to lean towards being overly optimist.
What were the lessons?
It’s better to live below your means which everybody knows is common sense. Everything had gone so well for a number of years. Like everybody else, I thought was going to continue to go that well. Lesson learned, I won’t do that again.
What type you’re going during those times? When things were tough, it sounds like there must’ve been some sleepless nights and some very stressful situations.
I think a lot of people out of my generation have come to, by whatever source, a new-found sense of spirituality. I have a sense of a higher power in my life. I’m not a religious person in any way, shape or form. I knew that at the very worst, I have a roof over my head and food on my plate and my family will be cared for. The worst case would be I’d have to give up this house and move to something smaller. There are people around the world who don’t have anywhere to live and don’t have any food. All of my problems are what I call luxury problems. They were not surviving across over luxury problems and I recognize that. I didn’t lose a lot of sleep over it. I did my best every day. I didn’t work extra hours because it just stress me out. I’m not a workaholic. I like to take time off and if I did my best every day, the results weren’t up to me.
When I was doing an interview with Ilise Benun from Marketing Mentor, she mentioned something similar that’s when times get tough, you just have to put things in perspective and look at yourself, look at the world around you, and how bad are things. When we put it in perspective, often they’re not as bad as you first think you ever saw.
North Americans tend to be very spoiled, and in the US and Canada. My dad was a Korean Foreign Service Officer, so I was raised largely in two third world countries, in Nigeria and also Korea. Korea nine years after the Korean War was still very much a third world country. You saw the kids with the swollen bellies and starvation and disease. While you’re rolling by in your air-conditioned diplomatic limousine, there’s an eight-year-old staring out the window, looking at these kids and saying, ”I knew what you were told.” Very few Americans or Canadians get to see that unless you travel to countries like that. Once you’ve seen that or if you choose to go down to the inner city in a lot of our major metro areas, you don’t appreciate what you got, even when power went out here five days. Power outage is a routine happenstance in second world countries much more in third world countries.
It’s quite clear that in North America, a lot of things are taken for granted and aren’t really put into perspective. You mentioned one thing about having to adjust your pricing or be a little bit more flexible during those tough times. How do you approach pricing? What rates do you charge and how do you set up your pricing structures with clients?
Traditional PR agencies have to price to cover the cost to their infrastructure. I would discuss it with personnel and they’re paying for brick and mortar. I recognize that it’s actually a competitive point for me in some cases was I didn’t need to charge what are charged for me. It didn’t take too much research online to find out whether it’s regional or even by word of mouth to find out what Ruder Finn or any major agency somebody would charge for somebody with my experience at any given point in my career. For example right now, I know that a major agency would charge no less than $425 or $450 per hour for my time up to 600% or 650%.If my billing rate to a corporation is $325 an hour which it is,$250 to a non and for profit, that’s very competitive rate. That’s really how I reached my decision, and then like any organization if you’re doing projects, you figure out the number of hours it’s going to take you and multiply it by an hour late and come up with a figure for them.
Do you often do work on an hourly basis or is this the majority of your work project? How does that work?
Breaking crises was five consulting just a quick phone call. That’s all hourly. Stuff like media training, that’s a fixed amount of hours. I know how long it’s going to take that project work or I’m creating a plan which can be a little variable than ours. We might agree on a not to exceed ceiling. Those three options usually.
You’ve just published a new book, A Manager’s Guide to Crisis Management. This is published by McGraw-Hill. How has the writing books helped your business? Have you seen any direct impact from publishing books?
My first book, Keeping the Wolves at Bay, I self-published and yes, I’ve seen a very direct impact. It’s been much better for revenue to my business, and revenue from all of the books has made that revenue. I use it two ways. One is if somebody has a book in their hands and they paid for it, if they’re going to need media training, who are they going to call or if they’re going to need me, they already know the way I am. The other is I’ve used both this book and the new book as a business development tool, so I will send it to somebody free because it doesn’t cost me very much as the author for either the books. I’ll send it to them and say, “I enjoyed meeting you,” or “If you’d like to see an example of my thinking, here it is.”That’s landed me a lot of work. That’s the biggest value of it as a business tool. In both cases, it’s the revenue that I’m never going to be able to retire revenue from books even though the self-published one is a real nice product margin built. With major publisher like McGraw-Hill, the amount I actually make as an author with a major publisher is very tiny. It’ll take a long time before the royalties exceeded the advance.
Can you share us some tips from your book? When a crisis occurs, what are a few things that you should definitely not do?
First thing you shouldn’t do is shoot from the hip. There’s a tendency to, or the other extreme from that put your head in the sand, the ostrich syndrome. Particularly the ostrich syndrome because people put their head in the sand, they forgot what part of them are still sticking out and so I like to put it. I think one of the images since we produced in my first book and in my newsletter is called Ono the Ostrich. He’s got a big target on his rear end because that’s what happens. The other is you just tend to come out, someone criticizes them and they just come back and fight it saying on a blog where they’ve been criticized. They’ll come in and make a nasty comment right there. What all that does was optimize that post so it’d be found more easily.
What do you mean by that? You’re saying that if someone posts a comment or writes a post the boat, let’s say they purchased a product from you and they’re not happy with it and they write a negative review, then you as the owner of that product come in and attack their review. Is that what you’re saying that can help to increase the search rankings for that?
Yes, because a key thing for search engine optimization is relevant search terms. If your name is mentioned once, that’s one relevant search term. If it’s mentioned twice, then it’s twice. You just optimize that site further for your name which means that ultimately in a Google search, that site will show up higher than a site where your name is mentioned only once. There are some strategic considerations involved like there are certain sites that allow businesses formally to respond and they do it in a way that can actually help you, but you have to know the peculiarities in each. If it’s a formal complaint site as opposed to somebody’s blog. If I have a disagreement with my air conditioning company and I started a blog called AirConditioningRipOff.com which by the way I threatened to do once, there were parents who showed up right away when I did that. I don’t know why that was, but if I did that and they posted a comment in response on my blog, the one that I own, I would say thank you because they just further optimize that blog for their name.
I remember actually reading an article about this exact issue , but one the web sphere, a web 2.0 type business I don’t feel a group on. It was some company that did this and there was a lot of negative publicity that went into it and that helped increase the searching. I’m familiar with what you’re saying, but it’s also important to mention or to clarify what you start off by saying, which is you do not recommend that people go and do and try and add more gas to the fire.
With great intention, there’s a whole chapter in the book an online reputation management. You cannot do effective crisis management in year 2011 without understanding the role of the internet on crisis prevention and crisis response. It’s absolute can think better outcome in webinar and that subject as well. It’s absolutely critical that people understand that topic. Without that, everything else is lost because the internet played a role in every crisis, not just some. Every single crisis to which I responded for the last five years at least the internet has played a role.
Page 91 of your book is the Role of SEO and Online Reputation Management.
That’s well into chapter nine which is the chapter on online reputation management. The number one thing is the organization has to stay. If you don’t already have a plan in place for responding, if you have a breaking situation and you don’t have any plan in place, you don’t have trained personnel in place, then the first thing you need to do is get somebody who knows what to do. It doesn’t have to be me, but pertaining to somebody who knows what to do because they don’t teach this in business school.
From looking at your book, there are some things even a small firm or a consultant can do to prepare or continuing on with this idea of a crisis has occurred, how to respond to it. We’re not talking about how not to respond to it, but can you give us a few tips that a small company or an individual can do? Let’s say a crisis does occur with their business, how to respond to it, or what to keep in mind?
I call it doing-an-out-of-body experience. You have to think about who’s being affected by this and what are they going to think about. The communication is probably the core function in a crisis, whether it’s your employees, your customers, if you have any investors, whoever your vendors, what do you need to say to them to reassure them. There’s five tenets of effective crisis communication no matter who you are. The reason of five rules is because I have a list but you need to be prompt because in the absence of communication, rumor and innuendo fill the gap. You need to be compassionate. You take into consideration the feelings of those who were affected by the crisis. They’re not going to listen to the facts. You need to be honest and that includes not exaggerating, not understating, not lying by omission as well as not directly lying by commission.
Need to provide some means people talking back to you and giving you feedback, you need to be interactive and you need to provide them with a list of minimum necessary information. What I’m asking the media to assess how any crisis had been managed, I use those five categories. Prompt, compassionate, honest, interactive and informative. I used to be very involved in a small chamber of commerce. Most of businesses were under five people. You can team up together in advance. You can get together with other businesses and reach agreements with each other that’ll help you continue your business in the event of, let’s say, power outage. You can agree that, “If we’ll watched out by a play over here, can we use your back room, Joe? Joe, if something happens to you, a fire in your building, you can come over and use our backroom.” You can reach cooperative agreements on buying emergency supplies together so that they’re cheaper. You can even reach cooperative agreements with other small businesses for both emergency response and for communications. If your business goes down maybe you can use their space for your businesses as they can use yours. You can cooperate in buying emergency supplies, you can even cooperate hiring a small PR firm to help you out. I call it the crisis management coop, small businesses can gain more of the strength acquiring a business.
I’m just looking at your book here. There are sixteen chapters, anyone who’s reading this feels they want to learn more about the business of crisis management. There’s a whole Chapter 14 called Crisis Management Consultants looking at how crisis management consultants operates. You can learn a lot from there as well as the book itself, Manager’s Guide to Crisis Management. Jonathan, where can people find out more about the book? If they want to learn more about it, if they want to buy it, where should they go?
That’s The Manager’s Guide to Crisis Management by Jonathan Bernstein. If people want to reach out to you personally or have questions or whatever it might be, what would be the best way for them to do that?
Your website is BernsteinCrisisManagement.com?
Right or they can just do a little search of Crisis Management. They’ll find it easily.
Jonathan, thanks so much for taking the time to do this interview. It’s been really informative and you’ve offered a lot of value that they will have to think about. I really appreciate it.
Appreciate it myself. Thank you.
Mentioned in This Episode:
- Bernstein Crisis Management
- Manager’s Guide to Crisis Management
- Ruder Finn, Inc.
- Keeping the Wolves at Bay
- Marketing Mentor