Fans of the popular ABC TV series “Scandal” won’t want to miss the Executive Institute Monday Luncheon at AFP 2018, in which Judy Smith—the inspiration for the character Olivia Pope—will host a session on surviving and thriving in an era of constant crisis.
Smith is the founder and president of Smith & Company, a top strategic and crisis communications firm. One of the nation’s top crisis experts, Smith has provided her expertise during some of the most significant events of our time, including the Iran Contra investigation, the 1991 Gulf War, the Los Angeles riots, and the United Nations Foundation and World Health Organization response to the SARS epidemic. Prior to founding Smith & Company, she served as Special Assistant and Deputy Press Secretary to President George H. W. Bush.
Smith recently spoke with AFP about her distinguished career, and provided some advice that treasury and finance executives can use when a crisis hits.
AFP: We currently live in an age of what often feels like perpetual crisis. Having worked for over 25 years in crisis management, how does this era differ from the previous ones you’ve observed?
Judy Smith: There is no question that the 24/7 news cycle and easy access to information on the internet has changed how crises now evolve. Issues that perhaps would have only been of interest locally can now spread within minutes via social media and become a global challenge for clients. And since networks need to fill so much air time now, certain crises can linger for much longer than years ago. However, alternatively, with so much new news constantly occurring, it’s also quite possible for a major situation to lose visibility more quickly if something else bigger knocks it out of the news cycle.
AFP: Indeed; while social media does put a spotlight on every scandal out there, it has also led to the public having a short attention span. Is it then easier or harder for a company to survive a major crisis today, as opposed to 10 or 20 years ago?
Smith: Every situation is so different and while I can often anticipate the type of blowback a company may face due to my experience in the field, it’s so important to view crises through a larger societal lense and be very cognizant of what else is going on culturally. For example, with the MeToo movement, bad behavior by a corporate executive which may have previously received less attention is now much more likely to have a big impact for a company.
AFP: You've handled crises in both the public and the private sector. Do you find one more difficult than the other? How are they similar? How do they differ?
Smith: I perhaps would have used to say public sector clients faced more challenges in crisis situations because they oftentimes have to answer to more stakeholders such as government agencies and Congress. I don't believe this is any longer the case as we are seeing private sector companies being held highly accountable by their consumers, watchdog groups, activist investors, as well as government agencies and Congress.
AFP: You helped Sony respond to their 2014 cyberattack. Data breaches are a top concern for many of our members. Can you talk a bit about what you did to help Sony weather that crisis? What is some advice you would give to a company that has incurred a major cybersecurity event like that one?
Smith: While I can’t speak specifically about Sony, what I can say is that I tell all of my clients—it’s not a matter of IF a crisis will happen at your company but WHEN—and preparation is key. I highly recommend reviewing your current crisis policies and procedures to ensure they are up to date and still relevant. If your company doesn’t have a crisis manual to be able to reference and use when you actually need it, it's a critical exercise to undertake and refresh regularly.
AFP: Your consulting firm has been tasked with managing some of the most publicized crises in the past two decades. Does any one in particular stand out as the most difficult? If so, what made it such a challenge?
Smith: I am the kind of person who thrives on challenges and once I take on a challenge, I’m all in. It’s the only way I know how to function and I think a large reason why clients engage with my firm. With that said, some clients are more challenging than others, especially the ones that don’t want to listen to the advice and counsel I provide to them. Sometimes I have to share sobering facts with CEOs and others in the C-suite and it’s tough medicine, but I’m always honest and sometimes they aren’t ready to hear it.
AFP: Treasury and finance professionals are the ones who handle the money at a company, and as such are often cautious. While all companies have a risk appetite, they typically do what they can to keep big risks to a minimum. What advice can you give them on how to keep a small crisis from blowing up into a big one?
Smith: Companies can have very different risk appetites and that’s ok. It’s important to have a keen understanding of your company’s specific risk tolerance and create planning materials that the leadership team can feel comfortable with. Crisis preparedness needs to be practiced regularly and adjusted when new situations arise. It’s important for leadership teams to have candid conversations about the likeliest risks facing their organization and how to plan against them. Additionally, I’d suggest regular communications coaching sessions with designated spokespeople to practice. I often find organizations getting into trouble not only because of certain actions or lack of action, but also because of how they respond to them as well. Lastly, I’d say that crises are high intensity moments but it’s important for those in charge to remain calm and to take as much time as possible, often still very little, to get a solid understanding of the situation and facts of the matter before attempting to respond.