10.1.1 Establishing the Issues Management Function

A formal issues management function involves establishing a multidisciplinary issues management team consisting of all major business functions.

Every company’s issues management structure should align with its business operations, marketplace realities and leadership styles. But as a general principle, the most effective issues management structures have several elements in common. They adapt these elements to their unique circumstances and needs.

Figure 10.1 is a diagram of a typical issues management structure.

The elements of a typical issues management structure are:

1. 1. Governance. There needs to be some senior body to whom the standing issues management team reports. That governance structure is responsible for review and approval of major recommendations and plans; identification and assignment of resources to manage issues; and supervision of the work of the issues management team.
2. 2. Issues management team. This is a standing group of people who represent core functional areas across the organization (e.g., legal, manufacturing, human resources, public relations, marketing/advertising, sales, security, administration, information technology). It meets on a set schedule, and also whenever a pressing or breaking issue warrants.
3. The duties of the issues management team include:
   • Establishing procedures for consistent assessment of issues, planning for managing the issues, and communicating about events or decisions regarding those issues.
   • Serving as the eyes and ears within the company and among stakeholders outside the company.
   • Developing an issues agenda and working through that agenda in a systematic fashion.
   • Naming individual issue champions to have authority to develop plans and documents on particular issues, to then be reviewed by the entire team. Each issue champion heads a topic-specific task force (see later).
   • Serving as a central clearing house for any issue that may threaten the company’s reputation.
   • Managing the approval process for communications about any particular issue.
4. 3. Topic-specific task forces. Topic-specific task forces are groups of employees tasked with developing understanding of a particular issue or set of issues. The task forces are typically led by a member of the issues management team who has been designated the issue champion for that task force.
     The task forces can be assigned based on geography, on functional area, on kind of threat (e.g., litigation) or by any other criteria that the issues management team determines. Each task force reports to the issues management team.
5. 4. Issues resource team. The issues resource team serves as a group of predesignated experts in particular functional areas who can be harnessed by either the issues management team or by the topic-specific task forces as needed. They may include lawyers, communicators, IT professionals, administrative personnel or members of particular business units. They are not a standing structure, but rather a group of individuals who may be brought into particular issues as needed.

Initial tasks for the issues management team include identifying issues that matter to the company. Typical issues are:

• Possible legislative activity impacting the company, its competitors, its products, its pricing or its marketplace.
• Regulatory events and changes to the business climate. For example, between 2001 and 2005 there were significant changes in the regulatory climate in the United States for the public accounting, investment banking, pharmaceuticals and insurance industries. After the 2008 financial crisis, there was a new round of legislative and regulatory activity affecting companies in a broad range of industries.
• Changes in social trends that make previously accepted practices unacceptable. After a number of prominent men were discovered to have sexually harassed, assaulted or otherwise abused women with whom they worked, the #MeToo movement arose. This dramatically changed the expectations of appropriate relations among genders in the workplace, and caused many organizations to review their own procedures, practices and vulnerabilities.
• Competitors’ activities, both positive and negative.
• Lawsuits, including class action lawsuits where a large number of people claim to have been harmed by a company’s products or business practices.
• Product quality and safety issues, especially issues that require the recall of defective products or put customers’ lives, health, safety or financial condition at risk.
• Internal problems, such as the need to restate earnings or change accounting treatment of previously disclosed earnings.
• Activities by groups, public officials or candidates for public office with agendas that pose a risk to organizations.

10.1.2 Prioritizing Issues

Once an issue is identified, it is important to understand how significant it is and what corporate resources will be needed to manage the issue effectively.

The two critical factors in assessing the importance of an issue are likelihood (how likely is it that this issue will play out to the company’s disadvantage) and magnitude (if it does play out to our disadvantage, how significant could the harm be).

Any given issue can be measured on a magnitude/probability matrix (see Figure 10.2).

The farther up and to the right on the chart, the more compelling the issue. The upper right contains issues with high magnitude and high likelihood; the upper left, issues with high likelihood and low magnitude; the lower right, low likelihood and high magnitude; and the lower left for issues where both magnitude and likelihood are low.

Multiple individual issues can be plotted on this matrix, which functions as a tool to allocate resources and management attention to a given issue. High likelihood/high magnitude issues would get primary attention. Various scenarios of how a single issue might play out can also be plotted on the matrix to help give a sense of the relative resources required to manage an issue in dynamic circumstances. Multiple issues, represented in Figure 10.3 with individual letters, can be plotted to help the issues management team prioritize its work based on the relative magnitude/probability of each issue.

If an issues management team considered a range of issues plotted on the graph in Figure 10.3, it would focus most of its attention and resources on the two issues in the upper right portion, issues g and d. Second, it would appraise the single issue with high likelihood but low magnitude, issue a; and the two issues with moderate magnitude/probability or high probability but low magnitude, issues c and f. The two issues where both magnitude and probability are low, issues e and b, would be put on a watch list and periodically reviewed.

For each issue identified, the issues management team would next develop a plan to analyze it, allocate resources to influence events to lessen its impact and engage stakeholders in support.

10.1.3 Issues Management Planning Process

In general terms, the planning process for issue management is similar to the public relations process described by Grunig and Hunt and others.⁵

Typical steps are as follows:

10.3.1 “Issue” versus “Event”

Following is a quick summary of the Issues Management Analysis and Planning Template, followed by a detailed description of each element. Note the template is similar to the actions mandated in handling crisis communications. The major difference is that an “issue” is more typically a situation played out over a period of time instead of a singular event.

10.3.2 Introducing the Template

The Issues Management Analysis and Planning Template provides a structured way to think about solutions to a problem. It provides an ordered, outlined overview of a basic, viable, and strategic issue-management approach. It is a predictable, goal-oriented process that clarifies actions and messages in support of business goals.

10.4.1 Issue Analysis

Issue analysis is descriptive. It answers the question what. It addresses what happened, and what could happen if the issue is not handled properly. It helps to establish both self-awareness and situational awareness.

This establishes the context in which an issue is to be understood and the challenges it presents. It leads management toward a crisis response action plan and communication plan calibrated to the magnitude and likelihood of the event or threat. The analysis is intended to provide management, internal and external staff, and other company employees with a common understanding of the nature of the threat and the possible consequences. The subsequent action plan should be crafted to neutralize damage resulting from the threat identified in the analysis.

The key elements of the analysis are:

Threat Assessment: The analysis begins by naming the problem: It presents a clear description of the threat and the various ways it could play out. The threat assessment should avoid euphemism and name the threat clearly.

There are many kinds of threats:

• A negative event within the company, such as termination of key employees, discovery of malfeasance, abrupt departure of key leaders, filing a lawsuit or the verdict in a lawsuit.
• A negative event outside the company but directed at it, such as litigation, a competitor’s triumph, or legislative or regulatory activity.
• A routine business process or decision that risks being misunderstood or will be the subject of opposition.
• An accepted business practice that becomes controversial because the political, social or business environment has changed.
• An event or change in the business environment that affects the company’s competitiveness, financial stability or operations. These could include natural disasters, new legislation, acts of terrorism, or similar issues not directed at the company but from which the company suffers collateral damage.

Risks: In addition to naming the threat, the analysis should address why the threat is something to be managed.

• What is the likely impact on the organization? On its financial condition, financial and, operational health, its relationships with stakeholders?
• What is the likelihood that the issue, left unmanaged, will cause harm?
• What is the likelihood the company can minimize or prevent that harm?
• What is the likelihood the company will make matters worse?

10.4.2 Sample Threat Assessment: An Embezzlement

The threat assessment should assess the specific business processes, business relationships and elements of the business environment that might be affected. For example, a company discovering employee embezzlement might identify the following as areas of concerns. Reasons existing control structures did not detect the embezzlement earlier:

• Facilitation by or participation of other employees
• Vulnerability of other areas (financial reporting, physical property theft, accuracy of pre-employment data, etc.)
• History of similar events
• Advisability of involving law enforcement
• The need to dismiss the employee; and what to say internally upon the employee’s dismissal
• Desirability of investigating via internal or external legal and accounting resources
• Likelihood of news of the embezzlement leaking
• Advisability of proactive disclosure of discovery and steps taken to identify scope and prevent recurrence
• Materiality of the dollar amount and the need to disclose into the financial markets
• Connections between the embezzlement and seemingly unrelated problems that might become public in the same timeframe
• The probability that competitors, adversaries, activists, regulators, or others may use the event to agitate against or embarrass the company

In addition to the business processes, relationships, and environmental challenges, the threat assessment should also identify the likely visibility that the threat represents, either left to itself or if mishandled, including visibility in the news media and likely public comment by investors, adversaries, regulators, legislators, ratings agencies, securities analysts, employees, and others.

To the degree that the issue is caused or may be inflamed by an adversary, the threat assessment should also anticipate the adversary’s likely plan of attack and its next moves.

10.4.3 Alternative Scenarios

It may also be useful for the threat assessment to include a number of possible scenarios, particularly when the threat is outside the control of the company. For example, if a regulatory investigation is underway, there may be several scenarios including:

• The investigation concludes that there was no malfeasance on the part of the company or its officers.
• The investigation concludes that there was malfeasance on the part of a single or limited number of employees of the company.
• The investigation concludes that malfeasance was widespread and endemic within the company.

Similarly, in the case of a pending verdict in litigation, the scenarios could include:

• The company has a major victory.
• The company has a major defeat.
• An ambiguous verdict that finds for us in some elements of the case, but against us in others.
• The company settles on favorable terms that are publicly disclosable.
• The company settles on confidential terms.

For each scenario, there would be a corresponding list of considerations, including an assessment of the likely response to each outcome among those who matter to the company, and the company’s and adversary’s likely next steps (appeal, settlement discussion, initiation of new litigation, etc.)

10.4.4 Magnitude Analysis

The magnitude analysis assesses the threat’s relative impact on the company’s reputation and operations. If the threat could play out according to several scenarios, the reputational and operational impact of each scenario should be assessed. This assessment involves the same process as was described earlier, in the discussion of prioritizing various issues.

10.4.5 Likelihood Analysis

The likelihood analysis assesses the relative certainty or probability that any particular event will take place and will cause operational or reputational damage. As with the magnitude analysis, the likelihood analysis should take account of different scenarios.

The likelihood/magnitude matrix described earlier in this chapter should be used to plot the relative impact of an issue or set of scenarios.

10.4.6 Affected Stakeholders

The stakeholder analysis creates an inventory of the groups likely to be most affected by the issue and their likely attitudinal or behavioral predispositions. These stakeholders could include internal groups such as employees, specific internal functions or departments, or affiliated groups who function as internal resources, such as contractors, brokers, or an independent sales force; or external groups such as regulators, customers, investors, allies or adversaries.

For each stakeholder group named, the analysis should inventory what is known about the group and how it is likely to interpret the issue in question:

• Which people and groups matter in this situation?
• Which will influence, be influenced by, or form expectations about the outcome of this issue or event?
• What do we know about them?
• What else do we need to know about them?
• What would reasonable members of those groups appropriately expect a responsible organization to do in such a situation? (See Chapter 11 for more on this concept.)

10.4.7 What Additional Information or Research Is Required?

The analysis should also identify additional specific information that needs to be obtained in order to either fully assess the threat or to begin the planning process. It also identifies the internal and external resource persons who need to be consulted or involved in the planning process.

10.5.1 Business Objectives

Business objectives describe what will be or what ought to be done if the company’s management of the issue is effective.

These objectives define the business goals that the actions and communications will accomplish. They are formulated as desired outcomes: the resulting status or change in the business environment that action and communication is intended to create. Typically, the business objective is the mitigation or prevention of the major risks identified in the issue analysis.

For example, for each of the following risks, the business goals could include:

• If the risk is loss of market share, the goal would be to maintain market share despite a product recall or pricing pressures.
• If the risk is adverse action by regulators, the goal would be to prevent regulators from taking action against the company in the wake of discovering problems.
• If the risk is legislative action that would restrict a company’s activity, the goal would be to prevent legislation from being introduced that would restrict a company’s ability to operate in its marketplace profitably.
• If the risk is the loss of workforce productivity, the goal would be to sustain productivity during a management shakeup.
• If the risk is that investors would stop investing in the company, the goal would be to preserve the ability to raise capital in the wake of a financial scandal.
• If the risk is that the company could go bankrupt, the goal would be to avoid involuntary bankruptcy.

10.5.2 Issue Management Strategies

The issue management strategies describe how the business objectives will be achieved. They delineate the conceptual frameworks that a company will use to organize its energies and deploy its resources to influence the business environment, and protect the company’s operations and reputation, and to remedy any damage. They further describe ways the problems identified in the analysis will be fixed.

Strategies are not actions to take. It is easy to confuse the two, and the difference between strategies and actions to take (tactics) is described in greater detail next. In general terms, though, strategies will be the constant processes to be employed using many changing tactics.

10.5.3 Actions to Take (Tactics)

Actions to Take describes the specific business decisions that need to be made or steps that need to be taken. These are the tactics to implement in order to reduce vulnerabilities, mitigate harm, or to restore trust or confidence quickly. The actions could be changes to an operating process, convening of a team of people designated to handle the company’s response to a crisis, articulation of steps to take to reach various stakeholder groups or any other concrete step. For the plan to work well, the actions to take should each put into operation at least one of the issue management strategies. An action that does not derive from one of the issue management strategies is likely to be counterproductive in at least three ways: First, it may not help solve the problem and could even make it worse; second, it expends resources that could otherwise be directed to solving the problem; and third, the misguided action makes management believe that it is taking effective steps to solve the problem.

The Actions to Take section could also include a menu of possible actions to be considered under various scenarios, as well as timelines of events known or expected to take place in the future, or targets for certain company-initiated activities to take place. The timetable may also prescribe regularly scheduled meetings or conference calls for the core team, its advisers, and management to review progress and facilitate decision-making.

10.5.4 Secure Area

Depending on the scope and duration of an issue, a company may consider establishing a secure room or suite of rooms (known informally as a “war room” or “operations center”) to serve as a location for the issues management team to work. Such a facility usually has restricted access and robust technological capability including phone lines, conference call capability, secure computers, printers, fax, and copiers, plus cable television, presentation slide projection capability, and a shredder. Much of the work product generated by the team can be produced in the room, and meetings of the core team can take place there, which will reduce distraction and curiosity in normal operating areas of the company and diminish the flow of rumors.

10.6.1 Staffing

The issues management plan should designate the team or teams who will work on issues day to day. Most plans identify a core team that is accountable for results. That team is often empowered to prepare the plan for management review and approval, and to implement the plan once approved.

Some plans identify both the core team and a governing group of managers to whom the core team will report and who can quickly facilitate the allocation of resources.

The plan should also identify other resources, both internal and external, that the team can draw upon or who may be asked to join the core team. These can include legal counsel, accounting or investment banking counsel, crisis communication counsel, operations, security, human resources, and other functional experts who can contribute based on the company’s needs and the specifics of the issue.

Part of organizing the core team is developing a complete and up-to-date working group list of all the people involved in the issue. This should include names; titles; assistants’ names; and all relevant addresses, phone, mobile phone, email, pager and other contact information.

The staffing section of the plan may also describe the frequency of core team or management team meetings, conference calls, and other contact, as well as an expedited process for review and approval of documents.

10.6.2 Logistics

The logistics section of the plan, which is optional, identifies the operational details that need to be addressed for the plan to work. The logistics section covers everything from who will be responsible for what work product; to the number of desks, printers, photocopiers, phone lines, etc. that will be required for the secure war room; to ensuring access to the building after hours; to making certain that teams working late are fed and have transportation home at night or a place to sleep.

The logistics section of the plan can range from a single piece of paper to a large three-ring binder to a computerized database. This helps the core team or its leaders understand how to operationalize the tactics they recommend and the day-to-day procedures of the crisis team.

10.6.3 Budget

The budget section is also optional and addresses the costs of managing the crisis, including the retention of outside experts, out-of-pocket expenses, and remediation of the underlying crisis, including possible costs of litigation, medical care, reconstruction of facilities, etc.

Very often cost is the least important consideration in managing an issue. But it is useful to have some accountability and predictability in cost; at the very least to have a mechanism to ensure that resources are properly allocated and to understand the consequences of assigning additional resources to a crisis. But in general terms, responses are not driven by a budget, and certainly should not be held up while a budget is being developed and approved.

10.6.4 Communication Planning

Because most issues are or could become public, and because much damage to an organization’s operations and reputation are based on public reaction and criticism of the company, each issue management plan should include a communication section.

The communication section is intended to support the business strategies and actions to take. It should be written following the establishment of the business strategies and specification of the actions to take. Because speed is sometimes a factor in issues management, it may not be necessary to wait until the logistics and budget sections are fully completed before beginning communication planning. Ideally, the communications plan should be written as an integral part of the issues management plan.

10.6.5 Communication Objectives

Communication objectives answer the “conceptual what” questions. What will be the end result of our communications efforts, effectively implemented? Objectives describe desired outcomes, not the processes by which these outcomes will be accomplished. Communication objectives answer these questions:

• What do we want those who matter to us to think, feel, know and do?
• What are the changes we seek in what they think, what they feel, what they know and what they do?

Whereas business objectives describe the desired change in the business environment, communication objectives describe the attitudes, emotions or behaviors to be exhibited by your stakeholders as result of your communication program. Communications objectives could include:

• Changes in knowledge, awareness, understanding, support or feelings
• Steps we expect our audiences to take, such as approving a course of action, supporting a point of view or trying a new product
• Neutralizing or minimizing the impact of negative visibility on audiences’ thinking

For example, if a business objective is to maintain the company’s stock price, the communication objective may be to maintain investor confidence in the company’s management team and prospects for future success.

10.6.7 Audiences

The audiences section lists the stakeholders to whom the communications will be directed. While not every communication plan needs an audience section, it provides a reality check in the form of an inventory of the groups who matter and to whom communications will be directed.

The audience inventory, in turn, informs the balance of the plan. In general, the tactics section ought to include at least one mechanism for reaching each audience, either directly or indirectly.

It is common for audiences to be prioritized in a number of ways. A typical prioritization order is:

• Internal: board of directors; all employees; departmental, regional, or specific-level employees; senior management; etc.
• External: current shareholders, the market as a whole, governments, academics, activists, etc.

It’s also common to differentiate ultimate audiences, those you ultimately want to reach and who matter directly to the success of the organization, and indirect or influencer audiences, who are not necessarily your stakeholders but through whom you reach your stakeholders.

Examples include:

• Ultimate audiences: employees, shareholders, regulators, the general public
• Influencer audiences: media, investment analysts, academics, consumer advocates, etc.

10.7.1 Messages

Messages are the critical thoughts we wish the audiences to internalize; the core themes we wish to reinforce in all communications.

The word “message” has many possible meanings, but for the purposes of developing an issues management plan, it should be understood to mean what you want those stakeholders who matter to the company to think, feel, know or do—and what you need to say in order for those groups to think, feel, know and do those things. As a general rule, the messages can be determined by focusing on the communications objectives: The desired attitudinal, emotional or behavioral outcomes among ultimate audiences.

One way to determine the messages is to undertake the following process:

1. 1. Assume your ultimate audiences. What do you want them to know, think or feel about either the company or the issue in question? What is the strongest credible thing you can say that, if believed, will cause them to know, think or feel this way? This becomes your first message.
2. 2. Assume that your audience has fully internalized the first message. What is the second thing you want them to know, think or feel about either the company or the issue in question? This becomes your second message.
3. 3. Assume that your audience has fully internalized the first two messages. What is the third thing you want them to know, think or feel about either the company or the issue in question? This becomes your third message. As a general principle, three messages are the maximum you can expect any audience to internalize.

These three sentences become the three topic sentences that drive all substantive communication about the issue. Just as tactics may change but strategies usually will not, the factual support to a particular message may change as the crisis unfolds, but the message usually will not. And different support statements may be used with different audiences, or with the same audience at different times, while the message remains unchanged.

10.7.2 Using Core Messages

The three core messages stand by themselves, and should be included in each communication the company makes regarding the issue: These three messages become the quote in the press release; they become the topic sentence in employee meetings; they become the outline of presentations to the investment community; they become the three themes in letters to regulators or to customers; they serve as hyperlinks on the company’s website, driving a visitor deeper into the supporting detail of each. The three messages need to be repeated every time the company communicates about the issue, requiring a very high tolerance for repetition.

The ability to consistently articulate the top three things a company wants its stakeholders to know is a critical attribute of leadership and essential to effective management of issues.

It is only at this point in the planning process that attention should turn to the tactics.

Paradoxically, most companies reflexively default to tactics as a first resort: “We need to hold a press conference” or “We need to send out a press release.” This is the rookie’s mistake in issues management and crisis avoidance. It is impulsive, unthoughtful activity, and it is often both self-indulgent and self-destructive. But once the plan is in place, a framework for using the tactics effectively can be established, and the implementation of the plan can be accomplished in a flexible, effective and cost-effective way.

10.7.4 Documents

The documents section of the plan is optional. It is intended to serve as an inventory of specific pieces of writing necessary to execute the communication tactics.

The document section identifies each individual communication required to implement the tactics. Since each piece of communication needs to be drafted, and since all need to be consistent and mutually reinforcing, this section constitutes a work list of documents to be produced before tactics can be executed.

These documents will include:

• Press releases
• Media Q&A
• Employee emails
• Employee Q&A
• Call-center scripts
• Call center Q&A

Note three different Q&A documents are called out. Since each is a Q&A format, a document inventory makes it clear that a separate Q&A is needed for three separate audiences. The three Q&A’s will provide different emphases and different levels of detail, but all three will be consistent with and mutually supportive of each other.

10.7.5 Communication Logistics

The communication logistics section identifies the resources and tools necessary to implement strategies and execute tactics. Like the documents section, it is optional. Like the documents section, it serves as a kind of reality check against tactics. It may include timeline of preparation and execution of tactics. It may also include the resources necessary to prepare the tactics for execution, or the individuals tasked to draft documents, seek approvals, or perform other tasks.