CORPORATE CRISIS:ANTHRAX AND THE

U.S. POSTAL SERVICE

John NolanFormer Deputy Postmaster General

October 18, 2006john.m.nolan@verizon.net

Anthrax and the USPS

USPS was experienced in dealing with disasters

What’s the same?

What’s different?

Situation: September, 2001

USPS Business Model in Jeopardy (GAO)

Internet/Recession/Competition/Negative Legislation

Volume/Revenue Dropping

9/11 Impact on Ops/Service

Pre-October, 2001Scientific Community Determination:

Anthrax will not escape sealed envelopeLittle or no risk to employeesNo contamination to other mail

Anthrax Attack in the MailLEAD NEWS STORY FOR ONE (1) MONTH PERIODICALLY FOR TWO (2) MORE MONTHS

Four (4) LettersTen (10) postal workers with anthrax and two (2) die

Eight (8) others with anthrax and two (2) die

Canadian scientists’ video changes everything284 facilities tested; 23 test positive; 2 closed for almost 3 years17,400 employees on antibioticsSince attacks, 25,000+ incidents requiring facility closures for short periods . . . no anthrax found in anyAdvertising Mail volume initially plummets

Key ActionsPR firm utilizationTask Force implementation . . . with unionsReaching out to industry CEO’s / expertsTesting DC plant (despite assurances)Media and internal communications strategiesMaintained control of crisis command centerDetermination of exact size and scope of exposureClosure of 2 centers (but not others!)Meeting with Canadian terrorism experts

No amount of planning will ever replace dumb luck

RELIANCE ON OUR CRISIS MANAGEMENT PROCESS!

J&J Tylenol / USPS Similarities:J&J

Plan for worstEarly admissionTake responsibilityEmpathy, responsibility, actionMessage from topDeny blameCreate pictureMake sacrifices

USPSPlan for worstEarly notificationReliance on expertsEmpathy, responsibility, actionMessage from topControl team; deny blameCreate pictureMake sacrifices

Crisis Communications Strategy, Timing, Control of Story

Seek to understand and be understood

Build trust and bank itMedia, public, customers, investors

“Could USPS be the first major business casualty of the war on terrorism?” Washington Post

“Anthrax assurance as threat to public trust – officials insisted mail was safe but now wonder.” L.A.Times

“Amid Anthrax, businesses sour on U.S. Mail and seek alternatives.” WSJ

“Polls find Americans not panicking over anthrax” Gallup/USAToday

“72% Happy With Government Handling Of Problem” CBS News/NY Times

Anthrax AftermathEmployee healthEmployee moraleManagement-Labor relationsHealth of the businessOrganizational credibility

GovernmentMediaIndustry

Future crisis readiness Biohazard detection capability

The Board’s Role: Before, During, After Ensured sound process and plans in place Culture of timely and open communicationCorporate Governance rules still appliedOffered experience and supportLet management manage (While assessing performance)

Listened: Were “consumers”/ investorsEvaluated: sought to improve readiness