Case Studies – Crisis Planning and Management
By Raha Naddaf, staff writer
(note: all case studies are in PDF format)
Ernst
& Young—Andersen Integration, Ernst & Young Australia
In March 2002, Ernst & Young Australia (EYA) signed a Memorandum
of Understanding to integrate Andersen Australia into the E&Y
business. The integration saw 1,500 partners and staff from Andersen
join the 3,000 partners and staff of E&Y. The opportunity for
integration arose as a direct result of the collapse of the Andersen
firm in the U.S. following financial scandals involving its audit
clients, including Enron, Worldcom and others. Andersen faced additional
problems in Australia relating to its audit of HIH, Australia’s
largest general insurance company, which had collapsed in March
2001. In response to the emergence of the integration opportunity
in Australia, an Umbrella Communications Strategy (UCS) was developed
to cover the key audience groupings most impacted by the integration.
The integration communication program successfully protected and
enhanced the reputation of E&Y both internally and externally
during the integration negotiation period.
Writing
a New Chapter: How Global Crossing Stared Down Bankruptcy and Survived,
Global Crossing
Global Crossing filed for Chapter 11 in the early stages of the
worst meltdown the US$2.3 trillion global telecom industry has ever
seen. It was the fourth-largest bankruptcy filing in U.S. history
at the time, and potentially the beginning of the end for one of
technology’s high-flying companies of the late 1990’s.
The timing of the filing—amidst the hypersensitivity to corporate
scandal that resulted from the Enron fiasco—only made it tougher
to retain corporate credibility. Global Crossing’s communication
team established the importance of being forthright and proactive
in response to accusations by limiting customer attrition through
an aggressive outreach campaign, assuring the media, customers and
employees that Global Crossing would survive bankruptcy. The efforts
of its communication team had a dramatic impact: Global Crossing’s
revenue for 2002 was forecasted at nearly 90 percent of 2001 levels,
despite operating with less than half the workforce and budget.
From Bankruptcy to Life Insurance Company of the Year, Manulife
Indonesia
On 13 June 2002, the Central Jakarta Commercial Court in Indonesia
declared Manulife Financial’s Indonesian operations, PT Asuransi
Jiwa Manulife Indonesia (AJMI), bankrupt following a bankruptcy
petition filed for the non-payment of a 1999 dividend. This controversial
ruling was the climax of a 19-month legal and public battle. The
communication and lobbying efforts, which included several media
and customer-relations efforts as well as a video release, resulted
in excellent team communication, effective media relations and stakeholder
support. Manulife Indonesia’s reputation was upheld and the
business was salvaged with little to no impact. Additionally, media
audits conducted by the Jakarta Communications Firm showed extraordinary
belief and trust in AJMI and Manulife Financial by the Indonesian
media, with trust indicators never before witnessed by the experienced
communication consultants.
Rewriting
the Book on Chapter 11: How Dade Behring Won Stakeholder Support,
Dade Behring
Although Dade Behring’s underlying operating business was
healthy, the firm was staggering under a debt load of more than
US$1.5 billion, which was incurred during the late 1990s when Dade
Behring was created through a series of mergers and acquisitions.
By January 2002, the company was in the midst of negotiations with
its banks and bondholders to reduce the debt. Through a proposed
“debt to equity swap,” banks and bondholders would receive
$1 of equity in the company for every $1 they reduced the debt.
The best way to implement the restructuring was through a pre-packaged
Chapter 11, which would occur in mid-summer and last about 60 days.
When completed, Dade Behring would become a public company, with
its debt cut in half. The communication challenge was to successfully
manage the next six to nine months, final negotiations, and the
Chapter 11 filing period. Dade Behring developed a proactive communication
plan to manage perceptions and convince employees, customers and
other key stakeholders to stand by the company. A potential negative
issue was repositioned as a positive event.
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