The Corona Crisis in 5 Phases. See What Awaits Your Company
We are at the tail end of the third phase of the crisis caused by the coronavirus, when – amid full-blown internal storms – companies are slowly forced to communicate their problems externally. This is when the fate of many of them will be decided. Communication will play a key role here. These are the conclusions of analyses carried out by the crisis communication agency Alert Media Communications.
According to an analysis by Alert Media Communications (based on recent weeks of the agency's work for companies preparing for the corona crisis or already affected by it), from the moment information about the Wuhan virus appeared in the media, a crisis has been growing which can be divided into five phases. Currently, most companies face phase four, in which the efficiency of management and communication will be critical for the course of phase five, filled with strong consumer emotions, likely layoffs, and even bankruptcies, but also the strengthening of those companies that demonstrate unique management efficiency.
Corona crisis is a term used by Alert Media Communications since February of this year to describe the communication earthquake that began in January in the Far East and within just a few weeks swept into the lives of even the smallest companies in the UK.
“This is already the biggest crisis of the current century. Its specificity is that it is based equally on – if not even more on – perception than on immunology. It is perception, fear, and emotions that trigger facts that strip store shelves bare and leave service establishments without customers,” said Adam Łaszyn, president of Alert Media Communications, adding: “The first companies seeing the growing threat approached us quite early, already in February. The measures implemented across several different industries allowed us to systematize and observe mechanisms of a universal nature. That is where these 5 phases came from. We predict that two of them – although still ahead of us – are in practice certain, in line with the regularities that have governed crises for years. Understanding these mechanisms can be very helpful – especially in avoiding mistakes, which are the main fuel of crises. Because the more companies cope better in this situation, the smaller the impact on the national economy – so this is in all our interests.”
PHASE 1. – DAWN. January 2020.
Companies learn that there is a problem. They do not yet know whether it affects them. So they merely absorb information, usually with little attention: “Something in China, something in the media.” Some of them introduce the first adjustments to their current operations, resulting directly or indirectly from the destabilization of the Chinese market (raw materials, supply market, financial market reactions). The first signs of an economic downturn appear, along with “pandemic” emotions stemming from media reports of dramas on cruise ships. Towards the end of the first phase, anxiety grows due to the already evident destabilization of the markets in China, Japan, Korea, and other Southeast Asian countries.
PHASE 2. – THE BEGINNING. January/February 2020.
In parallel with infecting the European economy, the coronavirus reaches our continent. Polish companies too must make their first corona-crisis decisions – limiting business travel and external meetings. The first task forces dealing with the problem are formed, but – as we observed – this is still at the level of top management and rather within closed circles. Communication on this matter remains only internal and rarely drops below the level of managers. In more efficient companies (e.g., under the influence of external recommendations), however, the first Crisis Task Forces or Rapid Response Teams are already being formed.
PHASE 3. – ILLUMINATION. February/March 2020
The 5 phases of the corona crisis and effective internal and external communication
It becomes clear to company managers that “we have a problem,” and rather a big and long-lasting one. Through indirect effects, the corona crisis is already realistically affecting and impacting current operations. Communication drops to the employee level, but still remains internal within companies, where it intensifies (posters, bans, orders, education, first remote work, etc.). External messages are very rare. On the one hand, companies are hit by the atomization of problems, because every employee returning from Asia or Italy creates a problem, and Germany – the main trading partner – adds to this as well. On the other hand, this crisis is globalizing – the approaching downturn is already obvious. In greater or lesser panic, analyses of “how this will affect us” and rescue plans are being drawn up. If a company has not yet formed a Crisis Task Force, one can expect a difficult future for such a company.
We are currently at the end of Phase 3 and the beginning of Phase 4. Phase Four and Phase Five are predictions in this analysis.
PHASE 4. – ESCALATION. March/April 2020
Everything changed with the appearance of the coronavirus in Poland, which resulted in drastic Government decisions. This forced changes in the internal organization of virtually all companies. Intensive and multi-level internal communication appeared in every one of them. Slowly, problems spill outside, which in turn means the need to launch external communication. The speed of its launch (e.g., on FB profiles in reaction to Government decisions) already shows the level of efficiency of companies today. Stakeholders (clients, partners) will increasingly demand information about what the company is doing, why something is unavailable or why it is not doing something, and how it ensures safety. Many employees are already taking advantage of remote work options, sitting at home with their children. Internal tensions are growing regarding different working conditions, problems with remote work, or lack of work. A growing group of employees will be in quarantine, and in extreme cases – in hospital. Information about employees being infected will appear in the media, and the coronavirus will be linked to brands. It is in this phase that the principle will manifest its power most strongly: “you don't get a second chance at your first reaction.” That first reaction will shape how companies are perceived in their specific corona crisis.
PHASE 5. – ZENITH. April/May 2020
After the mid-March shock, the situation will not return to normal very quickly. For many companies, it will never return. In Phase 4, many of them will make reprehensible mistakes in external communication that will focus the anger of stakeholders, visible first on social media (waves of hate), and then blown up by traditional media. This will cause a decline in trust that deepens the crisis, also internally exacerbated by the deepening downturn. Employee layoffs and bankruptcies will appear. Companies with spectacularly good crisis communication stand out. Above all, however, companies that defend themselves organizationally and… avoid appearing in the foreground of public interest will cope well. Such media interest is created primarily by spectacular mistakes, which these companies will manage to avoid. Crisis likes silence. Three parameters will have a major impact on the course of Phase 5. The first is the result of social and state mobilization in actions aimed at stopping the pandemic in the country. The second is possible state aid for employers and employees. The third – the presidential elections, provided the date is not postponed. In the fifth phase, it will be decided whether the crisis will continue to escalate or begin to subside – on a national scale and for individual companies.
From the Alert Media Communications analysis come CONCLUSIONS showing that two aspects will determine how each company passes through the growing corona crisis:
- Internal organizational efficiency – synergy in managing problems, business challenges, and internal communication;
- External communication – the company's way of responding to the interest of external stakeholders, from business partners, through social networks, to traditional media. Mistakes in communication in traditional and social media will be of greatest importance here.
Summary
The corona crisis, which began in January in the Far East, unfolds in five phases – from dawn, through initial ignorance, illumination, to escalation and zenith. Companies that recognize the threat early and prepare crisis task forces have a chance to avoid the biggest communication mistakes. The key is the efficiency of response in phase four – external communication and speed of action will decide a brand's reputation. In the zenith phase, filled with emotions and spectacular collapses, those enterprises that keep quiet and avoid media attention will cope best. This is the first such global communication crisis in which perception – often more than facts – shapes economic reality.
