On the scene before it hits the ground
One-time PwC consultant helps clients prepare for crises before they happen.
Dr. Daniel Laufer is the Head of the School of Marketing and International Business, as well as an Associate Professor of Marketing at Victoria University of Wellington in New Zealand. Holding both an MBA and a PhD in marketing from the University of Texas at Austin, he has one foot in the academic and the other in the corporate world.
Laufer got his start in 1991, as an auditor with PwC in Buffalo, and was later a senior consultant at the company’s Houston office. His work assessing damages in PwC’s Dispute Analysis and Corporate Recovery group led him to specialize in crisis management and risk assessment.
So what’s the best way to manage a crisis? Prevent it from happening in the first place. But the next best thing is to be prepared. At PwC, Laufer learned that harm to businesses often occurs “as a result of a certain crisis, such as a breach of a key contract or embezzlement by employees.” His philosophy is that companies should be prepared for all eventualities. “Risk assessment is essential” to preventing a crisis, Laufer insists, “Whatever has gone badly before can – and will—go badly again.”
As mobile technologies and social media change the way people receive news and information, companies must act faster than ever to maintain control of the story. The instantaneity of the internet itself presents a problem. “Images, in particular, can be devastating because they are so powerful. If a negative image gets out and goes viral, it can become the dominant factor in public opinion,” says Laufer. Even so, an inappropriate response can sometimes do even more damage than the incident itself.
Managing the message is one way businesses can stave off potentially damaging crises. Laufer incorporates theories from psychology in order to enhance the effectiveness of corporate responses during a crisis. For example, in one of his articles he incorporates psychological theories of motivation to craft messages related to compliance with a product recall request. Based on regulatory focus theory, people tend to be more prevention (avoiding threats), or promotion (motivated by gains) oriented. Applying the findings to a software context, Laufer suggests there are ways companies can encourage software consumers to update their products when there are issues with the current version of the product. “In the case of anti-virus software, the company should emphasize that by using the patch, users will prevent harm to their computers. This type of message fits well with the target audience who is prevention-oriented. The regulatory orientation of the target market can by assessed by the positioning strategy of the company, or the nature of the product. Anti-virus software is purchased by consumers in order to prevent harm to the user’s computer, so by definition it is a product that fits well with a prevention-oriented consumer.”
Despite being able to influence the outcome through its message to a certain extent, it is worth noting that ultimately the public, not companies, determine how any given crisis will be perceived. In addition, consumers’ perceptions of a crisis do not always reflect reality, and this can be a major challenge for companies. “Regardless of the crisis at hand, public perceptions—not reality—will drive individual behavior,” says Laufer. But wherever he can, Laufer will use his years of experience to make crises disappear before they start. “Crisis Prevention will always be an important part of any course I teach on Crisis Management.”