In some industries, facing a crisis is an everyday risk of doing business, which is why we might have expected more from the CEOs of British Petroleum (BP), Carnival Corporation, and Toyota Motor Corporation with respect to crisis management.
Yet gaffe-prone Tony Hayward (now the former CEO) of BP admitted the company was not adequately prepared for the 2010 Gulf oil spill. His media performance during the crisis was, to put it mildly, cringe-worthy.
Toyota’s president Akio Toyoda apologized to the U.S. Congress and car owners after recalling over two million vehicles because of faulty accelerators that same year. A communications expert quoted in Newsweek called it “the worst-handled auto recall in history…”
And Carnival CEO Micky Arison? The Wall Street Journal reported him as lying low after one of their luxury liners hit rocks and ran aground off the Italian coast in January this year, killing at least a dozen people.
Certainly these are extreme examples that attracted huge media attention because of the public safety issues involved. But none of us, in any kind of business, can afford to be complacent. Certainly not now that, in this digital era, ill-founded rumors and well-deserved criticism can ruin reputations and revenues in microseconds.
As the ancient Greek philosopher, Epictetus espoused, “It’s not what happens to you but how you react to it that matters.” Sadly, it seems that most of us aren’t prepared to react to business crises effectively, if at all.
In their 2011 Crisis Preparedness Study, global public relations and communications firm, Burson-Marsteller, found only a minority of companies polled (20 percent) were “Boy Scouts” and well prepared for crisis situations. Forty five percent were “Tightrope Walkers,” who had done some planning, but not nearly enough. The “Ostriches” were the second biggest group at 35 percent. Guess what their approach is?
Five considerations will help companies join the “Boy Scouts,” as far as crisis planning is concerned. In reading through this list, is there anyone who can honestly say they have all of these issues 100 percent covered?
1. Don’t Think This Can’t Happen to You
Did Patrick Doyle, president of Domino’s USA, ever imagine that a prank YouTube video uploaded by two employees would get over a million hits? Unfortunately, it showed the two doing “disgusting” things to the food they were preparing to deliver, causing major damage to the brand’s reputation. Remember, in this digital age, this kind of exposure never ever goes away. Pizza anyone?
2. Don’t Fail to Take Digital Seriously
Facebook and Twitter are reputed to have radically influenced recent events in the Middle East, and customers are using the same tools to overthrow businesses. Last year, outraged moms launched the Facebook page, “Shame on you, KV Pharmaceutical and CEO Greg Divis,” in reaction to what they considered to be “price gouging” by the company. The resulting 1,517 Facebook page “likes” might seem small beer, except is it really a coincidence that KV is now listed as one of the New York Stock Exchanges’ biggest losers?
3. Do Be Prepared to Act Quickly In Cyberspace
When a Red Cross employee mistakenly used the organization’s Twitter account to tweet a personal comment (referencing #gettngslizzerd – which apparently means snorting cocaine while drinking), things could have quickly gone downhill. Yet within an hour the organization had responded with an official (this time) message that read: “We’ve deleted the rogue tweet but rest assured the Red Cross is sober and we’ve confiscated the keys.” Thanks to humor, humility, and their rapid response, the Red Cross not only defused the potential for a lot of bad publicity, they also got a bump in blood donations.
4. Do Get Media Training – Soon!
Mike Lazaridis, founder and co-CEO of Research in Motion, the company behind the Blackberry, offered way too many generalities in his video apology to customers inconvenienced by recent service outages. His measured speech and darting eyes also suggested he was reading off cue cards. Even the words “I apologize” aren’t as natural as saying, “I’m sorry,” and sounded scripted. Coming off as sorrowful, sympathetic, or confident after a crisis event depends on the situation. But at the very least, when letting down customers, learn how to look and sound sincere.
5. Do Use “Social Media Experts” Who Know What They’re Doing
Whoever handled Ragu’s social media campaign last fall must have thought they were smart by targeting key influencers on Twitter to help boost their brand. Except, these digital dads reported feeling more spammed and offended than related to. Ragú had offered the online equivalent of sending a sales-obsessed executive to join an informal chat group. Twitter (at least currently) is a social tool, not a sales avenue. That the company largely failed to respond to the “Ragú Hates Dads” online kickback made it all the more apparent that they had focused on “media,” while not fully understanding how putting the word “social” in front of it changes everything.
Some years ago, Commercial Union Insurance in the UK ran a series of advertisements with the tagline: We won’t make a drama out of a crisis. That always seemed to be an eminently sensible approach to take. With the best will in the world, we can’t hope to anticipate and avoid every single crisis event that businesses may face, online or off. But with some forethought and planning the outcomes don’t need to be as reputation ruining or revenue crippling as Tony Hayward, Akio Toyoda, and Micky Arison discovered them to be.
Liz Alexander, Ph.D., offers strategic communications expertise to executives in the US, UK, and India. In addition to instructing on this topic at UT Austin, her consultancy leverages 25 years of publishing experience, to transform subject matter experts into best-selling thought leaders.
Sep 19, 2015 Comments Off on Three Things Millennial Business Owners Can Teach Baby Boomer CEOs