Do not let a crisis turn into a media disaster

by Nigel Hollis | June 22, 2015

As I noted in my previous post, I do not believe that the advent of social media has changed the way companies need to respond to a crisis. Rather our ‘always-on’ culture has made it even more important that companies act quickly, and communicate compassionately when crisis strikes.

Failure to follow the principles of crisis communication means that companies often end up looking indifferent, slow, and inept. The cost can be measured in lost reputation, reparation costs, and sale or closure. Unfortunately, many examples demonstrate how poor communication can exacerbate an already bad situation.

In 2010, Toyota fumbled its response to accusations that sticking gas pedals caused unexpected acceleration, by issuing conflicting messages about the cause of the problem. Regaining control of the situation cost billions in additional recalls and lost production—over and above the costs directly related to the crisis. In the U.S., Toyota’s market share dropped 10 percent from an all-time high as positive consumer attitudes eroded. In times of crisis, state clearly what is known and what is not known, and commit to discovering the truth.

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The phrase, “I’d like my life back,” sealed the fate of Tony Hayward as BP's Chief Executive Officer following the Gulf of Mexico oil spill disaster in which 11 oil rig workers died. The statement helped intensify the perception that BP was slow to respond and lacked transparency.

In contrast, when AirAsia flight 8501 crashed into the Java Sea Tony Fernandes, the chief executive of AirAsia, announced on Twitter, This is my worst nightmare.”

Shortly afterwards he was in Surabaya, Indonesia, the missing plane’s point of departure and speaking with families of the passengers and crew. Later in the week Fernandes was at the recovery site and again spoke on Twitter about the “soul-destroying” experience of seeing the recovered bodies.

As Tony Fernandes noted to reporters after the loss of flight 8501,

“I am the leader of this company, and I have to take responsibility.”

It is a statement that any leader of a major company would do well to heed. In times of crisis, company leaders need to step up and be seen to take action. They must be seen as honest, concerned and compassionate. Far from shunning social media, today’s leaders need to deflate criticism by using social media alongside traditional media channels to ensure the company perspective is heard.

While the threat of legal action and short-term costs may make many company executives think twice about addressing an evolving crisis until they have the full story, their delay may jeopardize the future income stream from their brands. Hold back, and your company may suffer even more than settlement costs.

So why do you think so many corporations fail to respond appropriately to a crisis? Please share your thoughts.

4 comments

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  1. Bob Barnes, July 01, 2015

    It's still a "case in progress" but the way Merlin Entertainment has handled the recent Alton Towers' Rollercoaster Crash, (where a carriage load of thrill-seekers were injured - including two teenagers having to have legs amputated), has been a fine example of how companies should react. The CEO immediately took responsibility, the park was closed for a weekend, and re-opened on a quieter Monday. Similar rides were shut-down at other Merlin owed parks (Chessington and Thorpe Park) until safety reviews and procedures were examined. (All part of restoring public confidence that rollercoasters are safe), and ultimately, the CEO made it very public that all the injured would receive compensation, (whilst not actually going into details), plus, initial payments to allow families of the injured meet immediate costs was paid within a few days.

    Unlike the Thomas Cook fiasco, where the travel agency were very slow in showing compassion when two of their holiday makers' children died.

  2. Matt Hames, June 22, 2015
    “I am the leader of this company, and I have to take responsibility,” easy and important. Be out there as a leader with a solid message – one might even say marketing the crisis, and the brand will be fine. Only, don't say it because it is easy, say it and live it. 
  3. Vikram, June 22, 2015
    They either misread the gravity of the situation and delegate to junior to handle it or the protocol to handle crisis is so far away from actual zone of impact that things slow down. This is one situation, when local leader awaits one up leader for orders and is unwilling to take charge.
  4. Phil East, June 22, 2015

    Tony Fernandes response to the Air Asia crash was outstanding. As a regular Air Asia passenger who lives in Indonesia, I was so impressed with his response. I will be flying Air Asia next week. Mr Fernandes is a good role model for Malaysian Airlines and other airlines that face air tragedies.

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