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Episode #70: 'Beating The Clock For Crisis Communication In Utilities' With Jeff Hahn [an Energy Central Power Perspectives™ Podcast]

While all utilities would prefer to simply stay out of the headlines due to emergencies or crises, the reality is that it comes with the territory. Whether that's extended outages from natural disasters or equipment failure, unexpected bad press, or the power providers simply not operating at the standard that the public expects, most utilities at one point or another will find themselves trying to get ahead of the narrative and tell their story. But in this digital age where Tweets are constantly flying and a negative story-- regardless of how true it is or not-- can seemingly move at the speed of light, utilities can't simply wait for these occurrences and decide how to respond to them at that point. Instead, they need to always be prepared and have a crisis communications plan.

That's the perspective of today's guest on the Energy Central Power Perspectives Podcast, at least. Jeff Hahn is a crisis communications expert who has extensive experience responding to emergencies for utility partners, and he's also the author of the book "Breaking Bad News: 12 Essential Crisis Communication Tools." He's joining podcast host Jason Price and producer Matt Chester to share his review of how some recent crises in the world of utilities were handled and offer advice to executives at utilities about how they should be preparing today for the unexpected emergency of tomorrow.

Prefer to Read vs. Listening? Scroll Down to Read Transcript.

Thanks to the sponsor of this episode of the Energy Central Power Perspectives Podcast: West Monroe. 

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TRANSCRIPT

Jason Price: 

Hello and welcome to this week's episode of The Energy Central Power Perspectives Podcast, the show that brings leading minds to discuss the latest challenges and trends transforming and modernizing the energy systems and the utility industry of the future. And a quick thank you to West Monroe, our sponsor of today's show. Now, let's talk energy.

Jason Price: 
Hi, I'm Jason Price, Energy Central podcast host and director with West Monroe, coming to you from New York City. With me, as always, from Orlando, Florida is Energy Central producer and community manager, Matt Chester. Matt, how do you think today's guest will be able to add to the conversation on Energy Central?

Matt Chester: 
Yeah, Jason. So I think a lot of what we hear in the broader energy community tends to be reactionary, doesn't it? But I think today's guest is all about having a plan, being prepared and managing a message before it takes a life of its own. So I think that's something that will be quite valuable for the Energy Central community to consider and to utilize.

Jason Price: 
Yeah, I agree. So, from the C-Suite to the line manager, everyone at the utility plays some role in communications. And specifically important would be the role of crisis communications. Considering what the past few years have taught us, utility leaders really do need to be prepared for the unexpected. And those preparations include not just acting to solve problems that spring up, but managing public communications with customers and stakeholders during all types of situations. So today's guest may be one of the most prominent experts in this specific field.

Jason Price: 
We're going to be joined today by Jeff Hahn, expert of crisis communications with a specific focus on the energy sector. Jeff, you could say, wrote the book on this topic, as he's the author of, Breaking Bad News: 12 Essential Crisis Communication Tools. We're excited to dig into these do's and don'ts and help our energy and utility audience understand best how to approach such an important topic. Jeff Hahn, welcome to Energy Central Power Perspectives Podcast.

Jeff Hahn: 
It's great to be here, Jason. Thank you, very much. I'm looking forward to the conversation.

Jason Price: 
Great, as are we. Jeff, you literally did write the book on crisis communication so congratulations. Let's start by hearing a bit about what this book is on, and can you relate this to our utility-professional audience?

Jeff Hahn:
Oh, sure thing. On the surface, Breaking Bad News is a tool kit. If you're in a crisis and your rapid response team needs to determine a message for a negative situation, you just pull out the image-repair schematic, that's the tool. If your team needs to decide how to get a message out to stakeholders, pull out the method two-by-two, that's the tool for that job. At a deeper level, though, the book is really meant to deliver a single message and here it is, "Options are better than answers."

Jeff Hahn:
Here's what I mean by that, humans are really lousy at being creative under stress and pressure. Our minds are really preoccupied with managing the moment. And so, having pre-positioned and known options that can be snapped together to form a full communication solution, that's the real lesson I've learned most in my 30-plus years of doing crisis work. You need those options in front of you so that your team can make choices quickly.

Jeff Hahn:
And that's the reason I was really intrigued with writing the book. I wanted to try to catalog all of those options that I had learned over my career and put them into a sequence of tools for use. It's important today, too, because time is the X factor. Time is as much an enemy to a brand as an actual emergency situation. And when time is short you've got to be able to respond quickly by making choices and decisions. All of those things are part of the Breaking Bad News story.

Jason Price: 
Are there different categories of crisis for utilities? Does the response look different for responding to a natural disaster compared with, say, an outage that's caused by a simple equipment failure? I guess what I'm getting at is how do we view a crisis when it is, say, an act of God versus an act of human?

Jeff Hahn:
Yeah, generally, I put crises into three big buckets. The one that is most familiar to our utility brands are emergencies. And these can include outages, force majeure, as you mentioned. They can include significant transmission-line down time. Things like that, we're pretty familiar with emergencies. We have crews that know how to respond to that. And typically, utilities where they're gas or electric invest a good amount of money into making sure they're ready to respond to emergencies. I'd say the same is true for safety areas or safety issues, which is my second bucket. Safety measures are usually well invested in and that is everything from personal protection equipment, all the way to classroom hours to train utility crews on how to operate safely in the field.

Jeff Hahn:
The difference between those two buckets and the third one, which is reputational crises, is that the first two are typically acts that are externally originated. Reputational crises are typically internal in their origin. And oftentimes, organizations are very unprepared to tackle those reputational crises.

Jason Price: 
I enjoyed going through your book, and one of the key go-to principles in this field is that in today's world with social media and digital communications, companies have what you call the two-hour leeway to respond to a crisis. So my first question is why only two hours and how did you get to this? And what should be a power company's goal in those first two hours?

Jeff Hahn:
It feels like a short amount of time, doesn't it? Today though, everyone carries a camera. Everyone has access to and ability to broadcast the news of the world as they see it. In Breaking Bad News, I set up a device that I refer to as the tick-tock box. And as you state, it's a two-hour stopwatch, effectively. The name comes from political reporting. When a chronology of events is being explained by a politician to a press conference, it's called a tick-tock briefing. Typically, that is a short amount of time but you're going through a chronology of activity.

Jeff Hahn:
The idea of the two hours though, really started with an examination of emergency-room techniques. There is this phrase, there is this term called the golden hour in emergency medicine. And that is, if you can make the case, that if you can address the patient in the first hour after an incident, you're largely determining the outcome of a critically injured person's odds of survival and recovery. So that intrigued me, that golden-hour notion. As I looked through the literature and tried to pinpoint a particular timeframe, it just occurred to me that there is no scientific study that sets the 120-minute timeframe, it doesn't exist. But in my years working on a crisis communication team for Motorola, I know that our best practice would be to move through the stages of communication within 120 minutes.

Jeff Hahn:
We got pretty good at it, unfortunately, because we had quite a few things we had to address. But the crux of it today is that if it's trending on Twitter it won't take long to be on TV. So brands really have to move and start communicating quickly before they know all the answers to every question. And that's really different. Many of our utilities are engineering cultures, they're expected to know answers. In my world, especially in the reputation realm, that's not necessarily true. The more important thing is the act of communicating. Even if you have to correct information at a later time or date. And so I always think about that today as, how fast will it get on social? How fast will that translate to TV? Those two factors tell me we have about two hours.

Jason Price: 
So you talk about this framework and system you have for communications in a crisis. And I know you've worked with many in the energy field on them. But let's walk through a high profile example, so almost a, "What would Jeff have done?" From the past year, one of the most major events was the ransomware attack on the Colonial Pipeline. So let's run through that scenario. If you were part of the team responding there what would you have advised, what would you have done differently? And I'd love to hear, as a CODA, did they do it right?

Jeff Hahn:
That's a very difficult CODA. But first and foremost, let me give a tip of the hat to Colonial CEO, Joseph Blount. Look, everything I'm about to say is Monday-morning quarterbacking. He and his team had to live through the ransomware experience. And until you're in that tick-tock box, you don't know what stress and pressure are. I was reading one account where an analyst says, "Ransomware is about extortion. And extortion is about pressure." Well, if you can't make diamonds without pressure I would say that the Colonial team are all sparkly right now. Because they really went through the knothole. And just a little bit of background on this, if you will, just to set it up.

Jeff Hahn:
We know Colonial Pipeline pretty well, it's a Georgia-based company. They operate the largest petroleum pipeline in the U.S. 2-1/2 million barrels a day of gasoline, diesel, heating oil and jet fuel go on a 5,500 mile route from Texas to New Jersey. They supply nearly half of the East Coast fuel supply. On May 7, 2021, the company announced it had been the victim of a cyber attack involving ransomware. That attack was carried out on April 29, by an organization known as DarkSide. Which is a criminal hacker group in Eastern Europe with heavy ties to the Russian government. The breach in their system, believe it or not, was made possible by a single leaked password linked to an old account.

Jeff Hahn:
Boy, that's frustrating to just recount some of this. The pipeline shut down and as they very predictably do, people panicked, began hoarding, retail prices skyrocketed and it became a substantial reputational issue for Colonial. Of course, this is a ransomware, it's a stickup. So what happened next? Colonial acknowledged, that was on May 19th, that it indeed paid 4.4 million dollars worth of bitcoin of the ransom to DarkSide. And the long story that unfolded over the next few weeks was that the Department of Justice was able to claw back about 64 of the 75 bitcoin. So it didn't end terribly poorly for Colonial but you just have to put yourself in their midst in that timeframe, and what an awful gut pretzel they must have had as they tried to understand, where was their system locked up? Was it in the accounting? Was it in the tracking?

Jeff Hahn:
My goodness, that was just a terrible episode. And of course, publicly it showed that there is a lot of vulnerability to our utility and energy systems. I think if I'm Monday-morning quarterbacking all of this, I would say that Colonial did a pretty darn good job of communicating. They were victims of a crime and if we think about that in slow motion, if you're in the middle of a hold up, you would have to imagine being able to talk about that to external audiences while there's a gun to your head, so really challenging.

Jeff Hahn:
I think though, where Colonial may have benefited that could be better, is if they had called in other spokespeople for them. In their case, a CEO did most of the talking, most of the even congressional testimony. What they could have done though, is recruit other experts and avoided the panic buying that took place. Other experts in the states where their pipeline runs could have communicated to the public, "We have plenty of fuel. We have other delivery options." Even working with the government, there could have been, for example, messaging around the relaxation of the Jones Act that would have prevented any shipping constraints. You're working though, against an unforgiving clock.

Jeff Hahn:
And so these options, again, they're very difficult to come up with in the moment. That's why Breaking Bad News has these tools in it that you can pull out and say, "Ah, there is an option for us to use a third-party spokesperson. Let's do that and let's get them to talk about the ripple effect in the market place." So there's my Monday-morning quarterbacking for the Colonial team. I would say high-five to them. They did a fantastic job under super difficult circumstances. I'll also predict that they'll never forget it.

Jason Price: 
Yeah, I'm sure. That's really insightful, Jeff. So in your world, it's really about planning and anticipating. So how do you shift from reacting to a crisis to the other legwork that must be done at other times? Whether that means preparing for a potential next crisis or building back after an event response, whether or not that response went well. Talk to us about that.

Jeff Hahn:
Right. In Breaking Bad News I built this model called reputation dissonance. And it contains a pretty harsh truth. Once normalcy is restored, no one wants to talk about crisis or deal with it ever again. They've had enough and you can imagine that the Colonial Pipeline team didn't want anything to do with this topic after the news cycle had cleared it out, after the situation had normalized.

Jeff Hahn:
But that said, rapid response teams need to have an operating system that tells them to come back to the table and produce after-action forensic reports on their own performance. These give them really good lessons for the start of any next crisis, even a lesson on, "How well did we get together when a crisis hits?" Those small steps can make a big difference when the tick-tock box is in full motion.

Jeff Hahn:
But I would say that a few clients of mine take a next step by actually stepping back from crisis communication into the discipline of issues management. Mostly because they don't want to deal with crises and they see that issues management could be a more rational way to approach this entire field of conversation. And what I do for them is I've created a diagnostic tool called The Cassandra Calculator. Cassandra was a prophetess in ancient Greek mythology. And through my Cassandra Calculator, I take clients through a conversation to measure five dimensions of their readiness.

Jeff Hahn:
Those five include goodwill. What is the goodwill of the brand? How well do their stakeholders know them and appreciate them? Utilities often have low goodwill. They're not in the business of building brand every day, they want to deliver your gas and electricity. But the second dimension is rapid response team readiness. How well did we assemble? How well could we communicate with one another? How well did we make decisions as a team under pressure? The third one is issue severity or the potential consequences. And then there's issue exposure, what is a potential resource drain? Time and money. And then, there is issue probability. What's the likelihood that we're going to get faced with this particular situation?

Jeff Hahn:
Those five factors give you a pretty good understanding of vulnerability and of course, a responsible rapid response team would start to work to minimize the probability exposure and severity of any issues that come up high on their radar. That's a best practice. That's one of the things that I really enjoy working a client through. Because I do believe that it serves consumers and the public best to be really open and honest about what could go wrong and then working to minimize the potential.

Jason Price: 
Yeah, and that's a great framework. And I really appreciate your bringing that up on the call here. And now, let's talk directly to our audience. It sounds like there's a good chance their organization is already behind the curve or falling prey to common shortfall. So what's the first piece of advice you'd offer to get them to really start thinking about this area?

Jeff Hahn:
I mentioned it briefly a little bit earlier when I was talking about the Cassandra Calculator. The quality of your rapid response team is one that we overlook often. We think about rapid response teams by titles, the CEO of a utility, the Operations Director of a utility. They may or may not be the best people at a rapid response table. So as a first step I always think about the capability of the team that would be responding to a crisis situation. And thinking about that gives you then an opportunity to assess the reputation dimension, which is the bucket that we often don't pay attention to, things like embezzlement, domestic violence spilling into the workplace.

Jeff Hahn:
One of the biggest things that rapid response teams overlook is simple. It's the word change, change in billings, change in service areas or capabilities, change in ISO. Any of these kind of changes, they require a unique communication approach. You do it well, you do change communication well and you get no credit, there's the downside. But you do it poorly, boy, the gates of hell are going to swing wide open and onto you. So change is one of those things that we overlook. And a rapid response team's ability to recognize that there is a change that needs to be communicate is really key. And it's really the core of many of the challenges on the reputation side.

Jeff Hahn:
Utilities are engineering-driven cultures, so when they communicate they often expect of themselves that they have an issue and that they have it fixed. That's what they want to say. Otherwise they believe they look incompetent. But what they fail to realize is that trust with stakeholders is more easily built when stakeholders are involved in creating a new future. It could be through a corrective action, but it's in the co-creation, inviting others to the table to solve a bigger issue, especially if change is part of it, that can really, really help build trust.

Jason Price: 
You talk a lot about the importance of reputation. But for many utilities, they operate as a monopoly. Further, they offer essential services, not a product that can be done without. I'm not sure if customers will ever feel warm and fuzzy with their utility. Together this all means utilities often don't have the threat that the satisfied customers will just no longer use their service. So does this impact how power companies should approach these customer communications?
 

Jeff Hahn:
Well utilities that are in regulated or monopolistic territories certainly feel a sense of protection from consumer demands. Those in deregulated spaces have been dealing with this question more appropriately in my mind. But let's just think about it through the monopoly lens. Here's what I'd say about that. Rate payers won't do without their gas or their power. Jason you hit that one right. They're not going to do without that. What they will do without is a utilities management team. And when we're brought in to help a client through, for example, a rate case, that's when we see this interaction, this phenomena occur.

Jeff Hahn:
Utilities often enter a rate case with a truckload of facts and figures. "There's the last time we made a change in rates. This is relatively speaking, a penny for every dollar spent." And they'll barrage a city council and the public with all kinds of facts and figures. It's true and those are good, they're valid, because they are competency-based arguments. What utilities fail to prepare for are character-based attacks coming their way. And we see this even with monopolies. Here's what they sound like, "You people at this utility don't care about poor folks." "The general manager spent $25,000 redoing his office." "This utility has squandered millions on a biomass boondoggle."

Jeff Hahn:
These are character attacks, they are not competency based. And so when utilities think that they are a monopoly and therefore don't need to care about reputation, they do need to remember that there are moments and times when customers and rate payers get their comeuppance. And those are certainly during rate cases. Now obviously a proper Q&A that anticipates these attacks, it's a great first line of defense so that a crisis of confidence doesn't become the main feature of a rate case. But even a monopoly utility is not invulnerable.

Jason Price: 
Good stuff, really fascinating insight, Jeff. And we want to thank you for making time today to talk about this. But now we want to peel back the curtain for our listeners and learn more about you, Jeff Hahn. And we'll do that with what we call our lightening round which is where we ask our guests a series of questions. And we fire them away and you have one word or a phrase response. Are you ready?

Jeff Hahn:
All right, this will be fun. I think I'm ready.

Jason Price: 
Okay. What song do you turn up to 11 when you're in your car?

Jeff Hahn:
Oh, no question about it, Staying Alive by the Bee Gees. That's a good crisis guy's song.

Jason Price: 
Sounds appropriate. What is your favorite movie theater snack?

Jeff Hahn:
Well, when I go to the movie theater I go to those where I can have dinner. So I would say my favorite snack is Hefeweizen beer.

Jason Price: 
What did you want to be when you were growing up?

Jeff Hahn:
I grew up on a farm in Iowa. That's what I wanted to be until a tornado destroyed the farm.

Jason Price: 
Best piece of advice you've ever gotten.

Jeff Hahn:
One that I really like and I repeat to myself and to my staff on a regular basis is, "Take your work seriously but don't take yourself too seriously."

Jason Price: 
And what are you most passionate about?

Jeff Hahn:
Well, I'm the kind of guy who gets bored easily, so I'm in perpetual motion. I'm always thinking about new offerings, new products, next version of Breaking Bad News. I'm always looking ahead so I guess you could say I'm passionate about what's next. I'm actually passionate about the future. That's my one-word answer, the future.

Jason Price: 
Nicely done, Jeff. So as a reward we're going to give you the floor. You'll have now an opportunity to speak to your audience. And what would you want them to walk away with?

Jeff Hahn:
I'll go back to the beginning of our conversation and remind your listeners that in my view, options are better than answers. And because I know your podcast Jason, is so important to utility managers around the country, hey let me offer, if anybody would like a complimentary copy of Breaking Bad News, just go to breakingbadnewsbook.com. Your listeners, they can put their name in and we'll send them a complimentary copy. And if they want to, I'll even sign it for them.

Jason Price: 
That's awesome. Thanks for that, Jeff. We've definitely learned a lot today and I know I'll be looking for whether or not these lessons are being implemented the next time we see a major utility respond to a crisis. Maybe after that event happens we can have you back on the podcast to grade the performance. But until then we want to thank you for joining us today.

Jeff Hahn:
Well you are welcome. It's been my pleasure to be here and I'd love to come back. There's no better position on the team than Monday-morning quarterback.

Jason Price: 
You can always reach Jeff through the Energy Central platform where he welcomes your questions and comments. And we also want to give a shout-out of thanks to the podcast sponsors that made today's episode possible. Thanks to West Monroe.

Jason Price: 
West Monroe works with the nation's largest electric, gas and water utilities and their telecommunication, grade modernization and digital and workforce transformations. West Monroe brings a multidisciplinary team that blends utility, operations and technology expertise to address modernizing aging infrastructure, advisory on transportational electrification, ADMS deployments, data and analytics and cyber security. Once again, I'm your host, Jason Price. Plug in and stay fully charged in the discussion by hopping into the community at energycentral.com. And we'll see you next time at the Energy Central Power Perspectives Podcast.

 

About Energy Central Podcasts

The ‘Energy Central Power Perspectives™ Podcast’ features conversations with thought leaders in the utility sector. At least twice monthly, we connect with an Energy Central Power Industry Network community member to discuss compelling topics that impact professionals who work in the power industry. Some podcasts may be a continuation of thought-provoking posts or discussions started in the community or with an industry leader that is interested in sharing their expertise and doing a deeper dive into hot topics or issues relevant to the industry.

The ‘Energy Central Power Perspectives™ Podcast’ is the premiere podcast series from Energy Central, a Power Industry Network of Communities built specifically for professionals in the electric power industry and a place where professionals can share, learn, and connect in a collaborative environment. Supported by leading industry organizations, our mission is to help global power industry professionals work better. Since 1995, we’ve been a trusted news and information source for professionals working in the power industry, and today our managed communities are a place for lively discussions, debates, and analysis to take place. If you’re not yet a member, visit www.EnergyCentral.com to register for free and join over 200,000 of your peers working in the power industry.

The Energy Central Power Perspectives™ Podcast is hosted by Jason Price, Community Ambassador of Energy Central. Jason is a Business Development Executive at West Monroe, working in the East Coast Energy and Utilities Group. Jason is joined in the podcast booth by the producer of the podcast, Matt Chester, who is also the Community Manager of Energy Central and energy analyst/independent consultant in energy policy, markets, and technology.  

If you want to be a guest on a future episode of the Energy Central Power Perspectives™ Podcast, let us know! We’ll be pulling guests from our community members who submit engaging content that gets our community talking, and perhaps that next guest will be you! Likewise, if you see an article submitted by a fellow Energy Central community member that you’d like to see broken down in more detail in a conversation, feel free to send us a note to nominate them.  For more information, contact us at [email protected]. Podcast interviews are free for Expert Members and professionals who work for a utility.  We have package offers available for solution providers and vendors. 

Happy listening, and stay tuned for our next episode! Like what you hear, have a suggestion for future episodes, or a question for our guest? Leave a note in the comments below.

All new episodes of the Energy Central Power Perspectives™ Podcast will be posted to the relevant Energy Central community group, but you can also subscribe to the podcast at all the major podcast outlets, including:

Thanks once again to the sponsor of this episode of the Energy Central Power Perspectives Podcast: West Monroe.