Situational Crisis Communication Theory and How It Helps a Business

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Swetha Amaresan
Swetha Amaresan

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Timothy Coombs came up with the situational crisis communication theory to better understand how an organization should communicate in response to a crisis. This is an essential framework for all businesses to know.

Two business leaders composing a crisis communication strategy

Why?

Every business faces crises. While many are avoidable, your business will likely get swept into one eventually. This is because many crises aren't the fault of the organization. Instead, uncontrollable factors can create an unanticipated situational crisis that forces your business to respond immediately.

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In this post, we'll go over what the situational crisis communication theory is and how you can use it to help your business successfully respond to crises.

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What is a threat?

A threat is a potential source of harm or danger to an organization. The level of a threat is determined by how much damage it causes to a business.

Damage can be tangible, like physical damage in the case of a natural crisis (more on that below) or the threat can be to brand/consumer relations.

The Three Elements That Create a Crisis

Businesses face difficulties all the time. A problem becomes a crisis if it comes with all three of the following elements:

  1. The event was unexpected.
  2. There is an immediate need for help.
  3. Difficult decisions need to be made, fast.

The key to handling a crisis is knowing how to act. Your plan to solve the crisis will depend on the type of crisis.

What causes a situational crisis?

A situational crisis is caused by an unexpected event that forces a company to act quickly. They can be triggered by a range of causes including extreme weather events, supply chain issues, and defective products, in addition to drops or increases in demand.

An organization can also inadvertently cause its own situational crisis through the actions of an employee or management. An example would be a mishandled customer complaint playing out across social media and damaging a company's reputation.

The Types of Situational Crises

There are many types of situational crises that pose a threat to a business. The threat to the organization's reputation is often determined by the company's history with crises and its existing reputation with stakeholders.

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

types of crises: victim crisis, accidental crisis, preventable crisis, financial crisis, personnel crisis, natural crisis, technological crisis

1. Victim Crisis

This type of crisis occurs when the organization is perceived to be a victim of the situation.

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 who laced Tylenol with cyanide in stores. Tylenol nearly took the blame for a crisis that they had no way of preventing.

A 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. The situation is unavoidable, and the company has no way of preventing it.

How to Respond to a Victim Crisis

When an organization is accused of being at fault but isn't, the organization must ensure its side of the story is heard, immediately.

Organizations can respond to victim crises through marketing. With victim crises, the organization is not at fault, so the public and customers are likely to be forgiving.

The important thing here is to ensure that the message (the company's truth) reaches all individuals. Marketing must come together to push out a consistent and loud message.

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 its 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.

How to Respond to an Accidental Crisis

The main thing to remember with an accidental crisis is that although the company is at fault, it was a mistake. It's best to admit fault and take positive action to resolve the problem.

Where the company is at fault, the resolution should be easy for customers and stakeholders to access.

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.

How to Respond to a Preventable Crisis

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.

4. Financial Crisis

A financial crisis can be distressing for a business as it could threaten jobs as well as the brand's reputation.

This type of crisis occurs when a company finds itself in need of emergency funds due to a sudden and unexpected economic hardship.

Financial crises can be caused by a variety of factors such as natural disasters, market downturns, or a loss of business assets.

In the case of a financial crisis, businesses may find themselves in need of immediate funding to address the crisis and prevent further damage.

How to Respond to a Financial Crisis

All businesses should have some kind of plan to prepare for a financial crisis. Naturally, you can't prepare for everything. However, if the business has a plan that considers budgeting and forecasting, you may be able to resolve a financial crisis.

In the event of a financial crisis, teams must identify potential sources of funding, reorganize operations if needed, and develop strategies for reducing costs.

Unfortunately, during a financial crisis, redundancies may be needed.

5. Personnel Crisis

A personnel crisis can be caused by a variety of factors, such as employee misconduct. Personnel crises often occur when someone associated with the business partakes in illegal, immoral, or unethical activities.

A personnel crisis can occur when the issue is part of the person's work life, but also if the issue or misconduct relates to the person's personal life. This is particularly true if the person is a senior member of the organization.

How to Respond to a Personnel Crisis

A personnel crisis is very difficult to respond to. Generally, the crisis will damage the trust between customers and businesses. Where actions are immoral or illegal it is hard for customers to forgive.

The best course of action is reputation management PR.

Companies may need to take actions such as public apologies on behalf of personnel or a public statement reinforcing company values.

6. Natural Crisis

A natural crisis can be caused by floods, fires, earthquakes, hurricanes, tornadoes, landslides, and other disasters.

How to Respond to a Natural Crisis

As the name suggests, a natural crisis is somewhat outside the control of the organization. However, preventative measures can be taken.

That might include evacuation plans or even proactive considerations for the location of office buildings.

7. Technological Crisis

A technological situational crisis is a situation where an individual or organization finds itself in need of immediate help due to a sudden and unexpected technology-related issue.

Technological crises can be caused by hardware malfunctions, software glitches, power outages, data breaches, or other unforeseen events.

How to Respond to a Technological Crisis

The first step in responding to a technological crisis is determining its root cause, identifying any services or products impacted by the crisis, and communicating the situation to customers.

When there's a technological crisis it can be tempting to resolve the issue first and then roll out communications to customers. This will depend on the level of threat and whether or not customers can take proactive measures to protect themselves and their data.

Situational Crisis Example

It's important to know what a situational crisis can generally look like so that you can respond quickly and appropriately. Start learning with the examples below.

Frito-Lay

In 2021, some customers found that their favorite salty snacks were in short supply on grocery store shelves or missing entirely. Frito-Lay experienced shortages due to COVID-19-induced supply chain issues that caused them to "temporarily pause the production of some items."

The company also experienced a worker strike at this time which further strained production.

Frito Lay situational crisis exampleImage source

Rumors quickly spread that the company was discontinuing Flamin' Hot Cheetos, causing panic among the snack's fans. Threads also popped up on forums like Reddit with users encouraging each other to stock up on their favorite items.

Frito-Lay reassured customers that they weren't discontinuing Flamin' Hot Cheetos. And while they have scaled-down production of a few of their items, they were able to bounce back.

The company invested more in U.S. manufacturing sites and hire an additional 15,000 employees to keep up with demand.

DevaCurl

In early 2020, hair care brand DevaCurl was subject to a public scandal that involved stories 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 of 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 lawsuitrapidly 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.

The company 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.

DevaCurl situational crisis exampleImage source

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 their 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 that diffuses the issue before you're forced to start from zero.

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's reputation.

SCCT outlines a path for crisis communication. However, the business should still determine what actions it will 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.

Rebuilding strategies should most frequently be used in response to accidental crises, especially when the organization has had a history of similar crises 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 be used in response to victim crises where the company is not at fault for the issue.

Diminishing after an accidental crisis can make you look negligent or defensive. If you still use this strategy 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.

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 loyalty.

Bolster crisis strategies can be used in conjunction with other primary crisis strategies, especially when the organization is facing a victim crisis.

Remember: It's impossible to know exactly how stakeholders — and the overall public — will react to an organization's chosen response. 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

Unfortunately, many businesses are unprepared to deal with a crisis. An informal LinkedIn poll of executives surveyed by Rod Hughs found that 67% of respondents indicated they had no crisis communications plan.

A survey conducted by PR Newswire found slightly better results, with 62% of companies saying they had a plan in place, but are uncertain about how often it's updated.

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.

How to Use Situational Crisis Communication Theory. Identify the type of crisis you're facing. Choose an internal crisis communication strategy. Identify your goal on the other side of the crisis. Decide who you need to publicly respond to. Pick two to three trusted advisors to choose a response strategy. Send an email to all of your customers. Distribute a press release or public statement.

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.

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 one example shows why having a goal is important.

4. Decide who 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, you could apologize to your customers for potential service interruptions.

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

5. Pick two to three 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. If possible, try to involve a freelance crisis communication specialist, an attorney, and a stakeholder such as a board member.

6. Send an email to all of your customers.

If your crisis invoices customers, contact 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

Download your free crisis communication templates here.

How SCCT Helps Your Business

SCCT can save you time and headaches by ensuring a smoother crisis response. Below are a few examples of the long-term benefits SCCT can provide for your company.

How SCCT Helps Your Business. SCCT helps you practice and prepare for crises in advance. You're less likely to panic when an unexpected crisis arises. You can categorize each crisis, making it easier to handle. SCCT reminds you to prioritize public opinion.

1. SCCT 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 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. You're less likely to 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 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 a 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. You can categorize each crisis, making it easier to handle.

SCCT makes you categorize your crisis into one of several types. 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. SCCT reminds you to prioritize public opinion.

It's vital that a company doesn't prioritize its own needs when responding to a crisis. 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.

When a crisis management strategy is in place, it can quell feelings of panic. Oftentimes, it's how an organization handles a crisis, and not the crisis itself, that determines its reputation moving forward.

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.

You 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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