When a crisis hits, the severity of the consequences escalates if blame is directed towards you. Whether it's a workplace shooting, environmental damage, accounting scandal or an "act of God" like a tornado, nobody in business intentionally courts disasters. In fact, responsible companies and managers take pains to avoid them – and, since events can never be fully controlled, they must also prepare strategic responses for when they happen.

But regardless of the actual causes of and liabilities for a crisis, whenever one occurs people look around for someone to blame. Should a crisis hit your company – whether or not you are actually at fault – you still must be ready to defuse and minimize the potential for blame.

The Critical Difference between Fault and Blame

Fault and responsibility are one issue. Did you create the situation or fail to prevent it? Once it took place, was your response inadequate or ineffective? Fault is about the content of the crisis and the effectiveness of your response. It can be described objectively, traced back, and assigned.

But blame is something else and the consequences can be devastating to your company. Blame is a matter of perception on the part of employees, customers, stockholders, neighbors and the public at large. Blame is what management gets when it is seen as negligent or uncaring. Blame is a critical, emotional reaction from people who are understandably upset. It comes from pain, loss, anger, resentment, outrage and even the desire for revenge. Such feelings can be powerful in themselves and they are just the volatile fuel on which our 24-hour, sensation-hungry media culture is engineered to run. Blame is not objective. It can easily spin out of proportion, escalating the seriousness of whatever crisis has set it off – with lasting negative effects for your organization.

Blame is exacerbated – and perhaps with some justification – when managers and corporate leaders act without what others would generally consider "good character." Does your organization foster a culture of "doing the right thing" in its everyday dealings?

Examine your vulnerabilities

Here is a mental exercise that will help you assess your vulnerability to blame. It is human nature not to think deeply about these issues. This mental avoidance is called dissociation. But, it is best to open your mind just long enough to examine your vulnerabilities. Going through this exercise will help you pinpoint areas of blame that can escalate your foreseeable crises.

In your mind's eye, think about the handful of most likely critical incidents that could affect your organization. Try anticipating and empathizing with what your workforce, community, reporters, shareholders and other important constituents may feel for each of your foreseeable risks, should they occur. Scrutinize yourself with questions like these: Was the incident foreseeable and did we take sufficient action to prevent it? Are we ready to respond effectively with trained teams and tested crisis plans? What actions are we taking that could be perceived as hurting others? Are we indifferent to warnings that foresee a crisis looming? If what we are (or are not) doing showed up on the front page of the newspaper, would we be filled with dread or pride?

As a general rule, no matter what your critical incident may be, if there is blame toward management or the company, the severity of the incident will increase significantly.

Two very different experiences of blame

Consider the recent financial scandal that touched Martha Stewart. The content of this crisis was not so huge. It consisted of an allegation of insider trading on a rather small scale, but Stewart's was perceived to have acted unfairly. The public didn't see the playing field as level. She was perceived to have information that the rest of the public did not have and exploited it. Almost always, beneath the surface of blame, is the perception that "it wasn't fair." Maybe the general public just enjoys watching the people it idolizes one day, brought down the next, but now – without knowing the truth of the charge against her – people widely and readily blame her. As a result, Stewart's reputation, brand and company have all sustained tremendous damage.

With a very different approach to crisis management, the oil company British Petroleum (BP) had a very different experience of blame following an incident that any rational person would probably judge more serious than Stewart's possible violation of securities trading rules. In 1990, a BP-chartered tanker ship ruptured off Newport Beach, CA, spilling nearly 400,000 gallons of crude. The oil came ashore, soaking birds and beaches in one of the most intense, hair-triggered media markets in the world. Yet just two weeks later, the Los Angeles Times was able to headline a story, "After spill, BP soaked up oil and good press."

"Within hours of the disaster," The Times said, "BP implemented a plan for dealing with the press. BP public relations officials, armed with handheld cellular telephones, were dispatched to points along the embattled coast wherever the press might congregate." The company even provided TV stations with underwater footage of the damaged hull of the leaking tanker.

BP reacted to the spill effectively and quickly, with both practical measures and a wise approach to public relations. "The best communications plan is not going to cover up a lousy operational response," the company's crisis manager was quoted. And he noted, "The people will be the judge of how well we've done the job."

Managing Outrage to Defuse Blame

Man-made catastrophes such as explosions, crashes, fires, workplace violence, terrorism and large industrial accidents all carry the possibility of high levels of blame and anger. Even in "acts of God," like weather-related incidents, people will look to man-made causes for the damage they have suffered.

Following Hurricane Andrew's devastating landfall in Miami, FL, in 1992, a rising chorus of blame emerged during the days following the storm. People were outraged that the South Florida government had allowed many local contractors to build structures without hurricane straps on roofs. In this case, the blame and outrage was a result of the perception that hurricanes were foreseeable and government officials didn't respond appropriately to prevent damage to homes and other buildings.

As a general rule, no matter what your critical incident may be, if there is blame toward management or the company, the severity of the incident will increase significantly. You need to be ready to manage outrage just as you are ready to put out physical fires. This involves more than putting the correct public relations spin on the incident. It also involves showing your preparedness. It means being ready to accept responsibility for the incident, if appropriate, and being quick to respond effectively to the affected people.

It is critical to look at blame and how your company protects its three core assets: its people, finances and reputation. The severity of your crisis will escalate if you are perceived as ineffective or unprepared in protecting these vital assets.

People: Employees and their expertise, as well as your suppliers, distributors contractors, investors and customers. It also can involve the community at large or neighbors surrounding your facilities. In general, the people-side of a crisis is the least prepared by most organizations and is the most volatile. Too often, there is reliance on media relations and employee assistance counseling, with little emphasis on a structured and field-tested management response system to address the critical needs of people impacted by crises.

Finances: Cash, stock value, credit rating, capital equipment and other areas of vital financial strength. Interestingly, a recent study by The Impact of Catastrophes on Shareholder Value, Templeton College, University of Oxford found that insurance coverage had much less to do with successful financial recovery following crises than did effective crisis preparedness and response.

Reputation: Positive feelings people have for your company, including how trustworthy, responsive and solid your company is perceived to be. Blame following a crisis can diminish reputation faster than the content of a crisis.

Some companies that are not prepared to protect their core assets pay the ultimate price after a disaster: They go out of business. Such was the case with a printing company called Standard Gravure in Louisville, Kentucky. A fire diminished the company's operational capacities. A year after the fire, employee Joseph Wesbecker – who was on a leave of absence for a stress-related illness – returned to the workplace and shot 21 people, killing eight. The company worked with a public relations firm and successfully battled insurers for coverage. Still, despite management's best efforts, the company folded.

Change from a positive to a negative reputation can devastate a company. Consider the quick fall from grace experienced by airport security company Argenbright. In 1999, a business writer at The Detroit Free Press described the company as having a "sterling international reputation. Argenbright is known as a top aviation security contractor, with savvy management and smart hiring and training practices." At that time, although millions of air travelers routinely passed through security checkpoints run by Argenbright, few even knew the company's name.

But on September 11, 2001, terrorist hijackers successfully slipped through Argenbright-run checkpoints. We all know the horrible consequences. In the cascade of criticism that followed, Argenbright's public relations response appeared nonexistent. The company was reported to be negligent in its hiring, training and quality assurance practices. Suddenly, this was the company everybody loved to hate – deserving or not, Argenbright became a target for the profound anger and frustration felt by the entire country. By November, a writer in the Lansing State Journal voiced an opinion that had become nearly universal: "Argenbright has quite the reputation in aviation circles - for not doing criminal background checks, for not training people properly and for not keeping an eye on employees." The company was unprepared to respond, and as a result its public reputation was shot.

Five Questions that Can Help You Avoid Blame

1. Should you have foreseen the incident and taken precautions to prevent it?

Did you analyze the risks of your operations? Did you ignore or minimize problems and dangers that you already should have been aware of? Had you failed to consider disastrous but foreseeable possibilities?

Analyzing your company's risks and figuring out how to eliminate or minimize them can be a big job. The more complex and far-flung your operations are, the bigger it will be. But the very best way to avoid being blamed for something terrible is to prevent it from happening in the first place.

Several years ago, a steel company experienced an industrial accident, which killed a worker. Before the accident, workers had reported to management that there was a potential safety hazard. When that hazard triggered the accident, the response from employees and the community was severe outrage. An employee publicly blamed management on local television with face and voice disguised. This time, blame was created by the perception of management ignoring warning signs, which caused a dramatic escalation of the crisis and eventually contributed to the closing of the plant. With more attentive management the source of the crisis could have been defused. The fact that it was ignored left the company open not only to the charge of being at fault, but to a powerful and destructive perception of blame.

Analysis of your foreseeable risks must be an ongoing process that continually takes new factors and developments into account. Regarding terrorism, for example, there are many possible scenarios that need to be examined now, which companies could have easily ignored in the past. The bombing of the Murrah Federal Building in Oklahoma City was certainly unforeseen, but by now – with September 11 – ignoring or denying the risks and possibilities of terrorism is no longer acceptable.

2. Were you unprepared to respond effectively to the incident after it occurred?

Do you have a crisis plan in place? You will probably answer yes to that. But is it a good one – tested, well thought out, and designed for the situations and needs you're most likely to experience? When something happens, will there be a working familiarity with the plan and will your plan be useful? And, does your plan take into account the often under-prepared needs of all people impacted by the incident, including emotional needs, and reasonable desire to be kept informed?

A major oil company, though acting with the best intentions, mounted an under-prepared crisis response in dealing with the emotional reactions of its affected people. Following a wellhead explosion, which killed several workers, the company wanted to provide counseling to others who had been traumatized. So it set up a trailer at the site, hung with a big banner that cried, "Mental Health." In a part of the industry known for its roughneck, masculine culture, this was a big mistake. Virtually none of the employees used the offered services and many had lingering emotional problems. When the company settled the first claim for posttraumatic stress disorder for a large sum of money, other workers came running – to the tune of $900 million. Sure, physical facilities, reputation and continued business operations are important, but being prepared for the human-side of crisis is a vital component that should not be overlooked.

3. Did management do anything intentionally that caused the incident to occur or that made it more severe?

We don't have to look any further than the still-fresh example of Enron for this. Those at the top who knew the company was collapsing were selling their stock, while forcing employees to hold on to theirs. Surely, the callousness with which Enron's workforce is perceived to have been treated is a major component of the blame the company's disgraced executives and board members are being treated to now. This time the blame was related to intentional infliction of harm.

4. Were you unjustified in the actions you took leading up to and following the incident?

The airline industry is an example of perceived unjustified actions. Even though there are reported drastic losses within the industry, passenger grumbling appears to be ubiquitous. Airlines are cutting back on customer amenities – from peanuts and meals to frequent flyer points. Meanwhile, for example, they pay their pilots upward of $350,000 for a mere 40 hours of work per month. Customers blame the airlines for poor management and believe that the customer sacrifices are unjustified.

The same occurs with downsizing. Employees don't like being laid off. But, if it appears reasonable and justified, the blame factor will remain relatively low. With the advent of cellular phones, the public pay-phone industry all but dried up. Employees who serviced these phones were laid off, but the blame was not significant, simply because the actions were justified due to a dramatic shift in the industry. The lesson learned is that even if negative actions need to be taken, the blame from affected constituents will be minimal, if it is reasonable and justified.

5. Is there any type of scandal or cover-up related to your involvement in the incident?

Following the Enron scandal, the Arthur Andersen company allegedly attempted to cover up evidence by shredding evidence. Arthur Andersen is no longer in business. The message here is that suspicion or evidence of cover up will produce extreme attention to your organization. And, if caught or perceived as guilty by the court of public opinion, it can be fatal – even to companies that believed they were too big to tumble.

When crises hit that deeply impact people, it is human nature for people to blame. However, many companies survive crises and even come through the experience stronger and with enhanced reputations. The anatomy of blame (i.e., unfair, intentional, unjustified, or foreseeable) includes issues that should be addressed in preventing, preparing for and responding to crises. The organization and job that you save may be your own.

Bruce T. Blythe, CEO of Crisis Management International (www.cmiatl.com), is the author of Blindsided: A Manager's Guide to Catastrophic Incidents in the Workplace (Portfolio, Penguin Putnam, August 2002).