By Aaron Vick
Some folks say “any news is good news” but is that really true? Most recently, the NFT space saw one of the biggest brands, Azuki, face enormous scrutiny when one of the project founders admitted on Twitter that he had abandoned a number of prior projects. Then, Zagabond continued to double down in an abysmal Twitter Spaces. Through a declining interview by Andrew Wang, Zagabond divulged that he changed his social media profile to distance himself from the abandoned projects, had zero emotional intelligence or compassion for the community, offered lackadaisical replies to the rug pull accusations, and gave no indication that the larger Azuki team addressed crisis management beforehand.
The Azuki project faced an immediate public relations crisis that caused an exodus of Azuki holders. The average price dropped significantly from a May 3rd, 2022 high of 32ETH to 10ETH. The average price of an Azuki NFT as of this writing seemed to be hovering at a 50%-60% decline from the peak prior to Zagabond’s revelations.
Could the Azuki team have avoided this PR issue if proper discussions and protocols were discussed prior to the interview? Maybe.
These types of open conversations need to be had when faced with possible bad optics about the brand. It’s even more critical as your brand begins to secure footing in the market and grow in recognition beyond a founder.
Crisis Response Plans for public relations start by analyzing your organization and identifying possible risks or issues that could damage your reputation. Those risks are then refined into a probability calculation that can be used to create a response plan.
Risk comes in four types:
Business Risks, Economic Risks, Reputation Risks (also known as reputational Risks), and Liability risks. Let’s take a look at each and how they can affect business operations.
Business risk is the possibility of hurting your business by your own actions or inactions. An example of business risk is a PR screw-up or a tweet/post that could be misconstrued as offensive, political opinion, or some other business risk.
Economic risk is the possibility of losing money by legal action taken against you by government agencies, customers, or suppliers. Basically, any type of economic risk can hurt your company’s bottom line. Examples of economic risks are labor disputes, extreme weather, strikes against your company, lower demand for your product or service, and declining stock prices.
Reputation risk is the possibility of losing customers and/or vendors because of your own actions or inactions. Reputation risks are all the things that can harm your brand’s goodwill by releasing confidential information, internal scandals, using your corporate funds for personal benefit, and expenditures that could be deemed wasteful or inappropriate.
Liability risks include situations in which you might be blamed for not preventing harm to others even when it may not have been possible to do so. This type of risk is the possibility of not being able to pay money owed to other people because of your own actions or inactions.
After you’ve identified the risks, you now have to calculate the probability of each risk occurring. The higher the probability of a risk occurring, the more critical it becomes to come up with a response plan and train your employees on how they should handle it. Keep in mind that some risks may arise as multiple types of risks.
Implementing the Crisis Response Plan
Once you have the response plan in place, you now need to train your staff on it so they will know how to respond as quickly and effectively as possible, whether they are involved or not. Your staff needs to know who is in charge and what their instructions are before a crisis occurs. That way, everyone can work towards resolving the issue by following procedures that have been set in place by your company’s senior leaders.
Discussing Crises in the C-Suite
And yes, this also includes a discussion of these topics in the C-Suite. You may become aware of risk through social media posts, boardroom discussions or third-party information that could lead to an issue that could damage your reputation. Exchange ideas and decide on the best way to handle it from there.
Be prepared with an action plan, how you’re going to deal with the situation, and include a time frame. Then determine who needs to do what, when they have to do it, and what they need to accomplish to resolve it. If you don’t have a response plan ready, you might be tempted as a leader to make up one on the fly. Don’t do it. Don’t.
Seeking External Guidance
Hopefully, you’re not in the middle of a crisis. If so, there is help! Some people handle these situations daily and can give you guidance. A Web3 PR consultant, Devan Leos, states that “PR Crisis Response Plans are essential as brands gain steam. Start planning early so you are not another Azuki.”
PR crisis management is a specialized service, so talking with knowledgeable professionals may be at least worth considering as part of your contingency planning process.
Earlier, we questioned the idea that “there’s no such thing as bad publicity. All press is good press.” This may be true, but not without planning and preparation. Developing a viable plan in advance will help you respond quickly and effectively to any risks that may arise for yourself and your organization.
Throughout an incident, it’s important to keep an eye on the key indicators or trends that will gauge how successful your efforts have been in directing the issues away from you.
As you can see, any topic that could hurt your business or project should be discussed at length with other team members so they can dig deep into their own feelings about it, what they could do and what you could commit to doing as a company.
Featured image via Unsplash.