Every business faces crises, and while many are avoidable, it's likely that your business will get swept into one eventually. This is because many crises aren't the fault of the organization. Instead, uncontrollable factors can create unanticipated situations that force your business to respond immediately.

Unless a crisis management strategy is in place, it can be easy to panic. However, it's important to remain calm and remember your plan for handling the situation. Oftentimes, it's how an organization handles a crisis, and not the crisis itself, that determines its reputation moving forward.

Crisis communication theorist Timothy Coombs came up with a theory to better understand how an organization should communicate in response to a crisis. In this post, we’ll go over what that theory is and how you can use it to help your business successfully respond to crises. But first, we’ll cover the basics: What is a crisis, and what kinds of crises could your business face?

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What is a crisis?

According to Coombs, a crisis is a negative circumstance involving an organization and its stakeholders, such as employees, customers, and investors. In these situations, the business needs to interpret who was responsible for the crisis and how the issue will affect the stakeholders' relationship with the organization.

There are three main types of crises, each based on who was responsible for the crisis and how the crisis affects the organization's reputation. It's important to note that the threat to the organization's reputation is often determined by its history with crises and existing reputation with its stakeholders.

Let’s go over the types of crises your business may experience.

1. Victim Crisis

This type of crisis occurs when the organization is perceived to be a victim of the situation. For example, a victim crisis can happen when the organization is rumored to be at fault — like when Tylenol was wrongly accused in 1982 of poisoning seven Chicagoans. Instead, the deaths were actually caused by a killer lacing Tylenol with cyanide in stores. Tylenol nearly took the blame for a crisis that they had no way of preventing.

A more common example of a victim crisis is natural disasters. These events can destroy the physical infrastructure of a company, leaving it with no facility to conduct its business. In cases like these, a victim crisis presents the organization with little to no reputational threat because the situation is unavoidable and the company has no way of preventing it.

2. Accidental Crisis

This occurs when the organization is at fault for the crisis, but its actions were unintentional. An accidental crisis can occur when an organization faces product or equipment failure — like when Samsung had to recall the Galaxy Note 7 due to batteries catching on fire and exploding.

Additionally, accidental crises can occur when an accuser challenges the organization. One example of this is when Starbucks was sued for underfilling their lattes. While this may not seem like a pressing issue on the surface, these crises can still cause significant damage to your brand's reputation. Even if they seem trivial, it's important to address these crises quickly before they have time to escalate.

3. Preventable Crisis

This occurs when the organization intentionally takes a risk that leads to a negative outcome or event. An example of a preventable crisis occurred during the 2010 Haitian earthquake when the American Red Cross raised $500 million and claimed to use the funds to help 4.5 billion people “get back on their feet.” However, instead of investing the money into Haitian infrastructure, the organization only built six permanent homes.

A preventable crisis is the worst possible threat to an organization because there is a high reputational threat to the business. In these situations, there's immense pressure placed on the organization's response as well as their actions moving forward after the crises. While the brand may take measures to resolve the situation, it's extremely difficult to rebuild your reputation after one of these types of events.

All of these types of crises are examples of situational crises, as they’re all unexpected events that are out of a business’s control. It’s important to know what a situational crisis can generally look like, so that you can respond quickly and appropriately.

Situational Crisis

A company faces a situational crisis when it’s a single unexpected event that’s completely outside of their control and that forces them to act quickly. Let’s cover the definition of a situational crisis in more detail.

Situational Crisis Example

In early 2020, hair care brand DevaCurl was subject to a public scandal that involved accounts of people losing their hair after using the brand’s 2018-2019 product batches. The crisis started when a former DevaCurl influencer posted a video speaking about their experience losing their hair.

The scandal quickly gained traction. A Facebook group was created to provide support to customers who’d lost their hair, and a class-action lawsuit rapidly followed.

DevaCurl first responded by emphasizing the efficacy and safety of its products. It posted a community notice reassuring customers that it had tested the products’ formulas. It did not directly attack the former influencer. The brand also created a website to combat some of the claims and concerns raised by its former customers.

These tactics did not prove successful, however. In early 2021, the brand had to relaunch entirely. It reformulated nearly all of its products and redesigned the packaging to divorce the new products from its old versions.

DevaCurl’s example is a nightmare scenario for most businesses. If you’re ever in a situational crisis, you can use Timothy Coomb’s Situational Crisis Communication Theory to create an effective response strategy that diffuses the issue before you’re forced to start from zero again.

Situational Crisis Communication Theory

The Situational Crisis Communication Theory (SCCT) identifies response strategies that organizations can use to handle a crisis. It's based on who was responsible for causing the crisis as well as how significant the threat is to the business' reputation.

SCCT outlines a path for crisis communication, but the business still determines what actions they'll take based on the situation. Not only is SCCT based on the organization's understanding of the crisis, but also on their preconceived notion of how stakeholders will respond to each type of response.

To plan for stakeholder responses, there are four main crisis response communication strategies.

1. Rebuilding Strategy

This strategy aims to rebuild relationships with stakeholders by redeeming the organization's reputation. This is achieved by taking responsibility for the crisis and offering apologies or compensation to those affected by the outcome.

Rebuild crisis strategies should most frequently be used in response to accidental crises, especially when the organization has had a history of similar crises and/or has developed a negative reputation in the past. Rebuilding strategies should also always be considered for preventable crises where stakeholder relationships may be permanently damaged. While it may take more time to rekindle the relationship, these actions will mark the first step toward recovery.

2. Diminish Strategy

This strategy works to minimize the amount of responsibility placed on the organization. This is achieved by justifying and offering excuses for the company's actions.

Diminish crisis strategies should most frequently be used in response to victim crises where the company is not at fault for the issue. If used in response to accidental crises, it can make you look negligent or defensive. If you still use it in response to an accidental crisis, ensure you have no history of crises and a relatively positive industry reputation.

For smaller crises, this strategy can help businesses minimize the negative effects of the situation while still avoiding taking unnecessary fault.

3. Deny Strategy

This strategy completely re-assigns the blame away from the organization. This is achieved by confronting the accuser(s) for their invalid accusations, claiming that there is no crisis, or blaming another party for the crisis.

Deny crisis strategies should be used in victim crises when the organization is faced with rumors or accusations that are harmful, but not true. Rather than rebuilding the relationship, it's best to confront the cause of the crisis immediately to avoid further escalation. It's important to keep in mind that this strategy is only effective if your business is truly at no fault for the situation.

4. Bolster Strategy

This strategy works to position the organization as an asset to its stakeholders. This is achieved by reminding stakeholders of the organization’s former good deeds and praising stakeholders for their dedication and loyalty. Bolster crisis strategies can be used in conjunction with other primary crisis strategies, especially when the organization is facing a victim crisis.

While each of these strategies is predicted to be effective in the specific crises laid out, it's impossible to know exactly how stakeholders — and the overall public — will react to an organization's chosen response. So, it's important to prepare not only for the public's response to the crisis but also for their response to your follow up actions.

That means creating a crisis communication plan that protects your reputation and appropriately addresses the public’s concerns. If you’re not sure how to get started writing one, we’ve compiled the best crisis communication examples from real brands.

You may be thinking, this is all great, but how does SCCT actually help me write a good crisis communication plan? Can't I just tailor each crisis communication strategy to the specific crisis at the moment? These are great questions. As you create a communication plan, Situational Crisis Communication Theory will help your business in more ways than one.

How to Use Situational Crisis Communication Theory

How do you actually use SCCT to create a full-scale crisis management process at your business? If you have a crisis response team, you might already have a process in place. But if your business is small, you may not have established a plan yet.

SCCT can help you create a plan in the face of a situational crisis. No matter what, try to move quickly; if the crisis runs away from you, it may be too late to repair the damage left behind.

1. Identify the type of crisis you’re facing.

Before responding publicly on social media, writing up a notice on your website, or sending a press release, figure out the type of crisis you’re facing. Remember, the three types are:

  • Victim Crisis: A victim crisis occurs when your business plays no hand in the crisis and isn’t at fault.
  • Accidental Crisis: An accidental crisis occurs when your business is at fault for the crisis, but it was from an unintended mistake.
  • Preventable Crisis: A preventable crisis occurs when a business purposefully took an action that resulted in negative consequences.

There are more types of crises your business could face. Knowing the type of crisis you’re facing will determine the public communication strategy you’ll use later. In some cases, you may not need to communicate with the public at all. For instance, if you’re in the midst of a natural crisis, you most likely won’t need to send a press release to protect your reputation.

2. Choose an internal crisis communication strategy.

What you tell your stakeholders doesn’t need to be what you tell the public. Be as honest as you can with the employees involved in the crisis; or, if the crisis concerns the entire company, communicate with everyone in your business to let them know what has happened.

This is a time for clarity. Being overly guarded can backfire and make you seem less trustworthy. While the communication you send your employees won’t make it to the public eye, you can still employ SCCT. For instance, if you choose the rebuilding strategy for your internal communication, you can admit to stakeholders that you were at fault, but that everyone’s jobs are safe.

3. Identify your goal on the other side of the crisis.

When responding to a crisis, it’s important to identify a goal for what your business will look like after it’s over. It’s all too easy to get in damage-control mode and forget that your business can and will successfully get out of this crisis.

Your goal will directly inform the SCCT strategy you’ll choose later on.

Is your goal to retain as many customers as possible? Is it to protect your public reputation? Is it to reestablish trust in your brand? While these aren’t mutually exclusive, focusing on one objective will help you respond effectively and get the result that you want.

If DevaCurl had sought to reestablish trust in the brand by immediately reformulating all of its products, it could’ve likely avoided a class-action lawsuit. That’s one example that shows why having a goal is important.

4. Decide whom you need to publicly respond to.

Next, it’s time to decide which groups you’ll need to respond to. Is it your current customers? Is it the greater public? Or is it your employees only? For instance, if your business was victim to a natural crisis and everyone’s belongings were lost in a flood, you would communicate to your employees first, then apologize to your customers for potential service interruptions.

If there was an issue with the product, however, you’ll want to respond publicly, because both current and prospective customers are affected by the issue.

5. Pick 2 to 3 trusted advisors to choose a response strategy.

Next, it’s time to choose a response strategy as outlined by SCCT. But don’t do this alone: gather a few trusted advisors to pick a response strategy and brainstorm possible verbiage.

The trusted advisors may be anyone whose insight you’d find valuable, but if possible, try to involve a freelance crisis communication specialist, an attorney, and a stakeholder such as a board member.

Put all of your minds together to choose an SCCT strategy:

  • Rebuilding Strategy: Take responsibility for the crisis and offer compensation.
  • Diminish Strategy: Minimize your responsibility for the crisis and justify the company.
  • Deny Strategy: Shift the blame away from the company to the party whom you believe is responsible for the crisis.
  • Bolster Strategy: Emphasize the company’s excellent track record to position yourself as an asset.

6. Send an email to all of your customers.

Now that you have a communication strategy, it’s time to send a notice to your current customers first. You don’t want them to find out by reading a news article about the scandal or crisis.

If applicable, offer compensation if they’ve experienced an issue as a result of the crisis. Be sure to add a personal touch by including a way to directly contact your team and get their questions answered, if need be.

7. Distribute a press release or public statement.

Your employees and customers are aware of the crisis. Now, it’s time to write a press release and distribute it to the public.

In your press release, include:

  • A brief summary of what happened
  • A reason for the crisis — if you don’t yet know, say that you’re currently investigating the issue
  • The steps you’re taking to resolve the crisis
  • How your company will change moving forward

If you’re not sure how to get started writing the press release, you can use a crisis communication template.

Featured Resource: Crisis Communication Templates

Crisis Management and Communication Kit

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How SCCT Helps Your Business

SCCT can save you time and headaches by ensuring a smoother crisis response when and if your business faces a crisis. In addition to a short-term response, below are a few examples of the long-term benefits SCCT can provide for your company.

1. It helps you practice and prepare for crises in advance.

How nervous would you feel if you went into a big, important job interview completely unprepared? You haven't done any research on the organization or practiced interview questions, and you have no idea who's interviewing you. I'm guessing you'd be feeling extremely nervous and not performing to the best of your ability.

The same goes for crisis response. You never want to go into a crisis blind without having ever prepared for it. This is why it's important to role play with your team using example case studies. Everyone on your crisis communication team should be on the same page about how to immediately handle negative events that impact your organization.

2. It makes it less likely that you'll panic when an unexpected crisis arises.

It's easy to panic when facing a major crisis. Your nerves get the best of you, you're feeling discouraged by slashing comments on social media, and the pressure gets to your head. This is usually a recipe for disaster, resulting in a last-minute, unplanned response that makes matters worse.

When you have crisis strategies laid out by SCCT, you don't have to come up with the proper response to your crisis completely from scratch. Rather, you can reference your existing SCCT strategies to come up with a plan of action for an unexpected crisis.

3. It helps you categorize each crisis, making it easier to handle.

SCCT makes you categorize your crisis into one of three types: victim, accident, or preventable. Even if you don't have a specific plan for the situation at hand, this categorization gives you a baseline to work off of. Having that starting point will make you feel like you're taking action to resolve your crisis, rather than waiting and wondering what to do next.

4. It reminds you to prioritize public opinion.

It's vital that a company doesn't prioritize its own needs when responding to a crisis. Just as in any organizational action, the focus is on the customer's success, not the organization's.

You may believe that the best way to respond to a crisis is to immediately deny the accusations and protect your organization's reputation. However, what do your stakeholders want to hear? What's going to make them trust you again? Sometimes, that means putting aside your pride and taking responsibility for your actions, in the hopes that your honesty will regain their loyalty.

Use Situational Crisis Communication Theory to Build a Better Business

How you handle a crisis can say a lot about you and your business. By applying SCCT to your crisis management process, you can ensure that your reputation remains intact during and after the crisis. That way, your business won’t suffer any losses — indeed, it might even come out better on the other side.

Editor's note: This post was originally published in March 2019 and has been updated for comprehensiveness.

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Originally published Jun 30, 2021 8:00:00 AM, updated July 12 2021

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Crisis Management