How not to handle a crisis

When crisis strikes it's easy to get overwhelmed. Luckily there's plenty we can learn from other people's mistakes.

by Stephen Jones
Last Updated: 08 Oct 2018

What do you say when you’re hauled in front of TV cameras in the wake of an explosion that has left 11 rig workers dead and 19,000 gallons of oil a day pouring into the Gulf of Mexico? As the then BP CEO Tony Hayward found out following the 2010 Deepwater Horizon, it’s probably not ‘I want my life back’.

Although Hayward would later apologise for his ‘hurtful and thoughtless comment’ - just over a month later and after much public rebuke - the damage had been done. It probably didn’t help that during other media appearances he also used the words ‘tiny’ and ‘modest’ to describe the biggest oil spill in US history.

Due to the nature of modern newsgathering, we tend to hear more about when a company has got it wrong, rather than when a company has got it right during a crisis. Fortunately, there’s plenty we can learn from other people’s mistakes.  

Don’t forget to be human

'The first thing you have to be able to say is a proper sorry, and that has to transcend legal liabilities because people can see through the bullshit,' says Robert Phillips former UK chief executive of Edelman and founder of Jericho Chambers.

When a crisis strikes the instinctual reaction is to gather the PR guys, gather the lawyers and try and limit the damage to the brand. While it might initially help the company save face and potentially income in the short-term, a disconnected response can have lasting consequences.

Thomas Cook caused outcry when CEO Manny Fontenla-Novoa largely refused to accept that the company was liable for the deaths of Bobby and Christi Shepherd in 2006, instead arguing that it was the fault of the Corfu Hotel that failed to maintain the faulty boiler that killed them. It took nine years for the company to eventually apologise after an inquest found the children’s deaths unlawful. But this wasn’t before Thomas Cook had claimed £3 million from the hotel in damages for loss of business.

Compare that to Merlin Entertainment CEO Nick Varney’s actions in the aftermath of the Alton Towers crash that left 16 people injured. He pursued a policy of openness, allowing access to investigating teams and never tried to direct liability elsewhere.

This sort of approach might not sit too well with the legal department, but in the long run the company has largely able to maintain its integrity and image. Let's face it, once the accident happened, it was never going to be able to avoid the eventual £5 million fine, nor the loss of visitors it has seen over the last couple of years. But by responding as it did Merlin never gave the impression that it wanted to.

Don’t think that you need to provide all the answers

‘CEOs and politicians have been schooled for generations to think that they have to have this magical capability to have the answers to everything straightaway,’ says Phillips. 'The future cannot be imposed, it can only be negotiated and part of that negotiation is to say that you don't have all of the answers.’

In the midst of a crisis, there are usually a lot more questions than answers. Angry customers and journalists will expect answers quickly, but these can only come with time, after investigations have had the time to play out.

The pressure can therefore be to issue a statement in response, any statement, but if it turns out to be erroneous, this can turn into a much bigger problem if it has to be corrected later.

At one point in the BP fallout, Hayward claimed during a BBC interview that the fault lay with the rig owner Transocean, despite that fact that the investigation into the explosion was only just beginning.

Just weeks later - when the investigation had progressed further - BP released a statement acknowledging its role in the catastrophe. By this point Hayward’s claim that ‘this was not our accident’ had only heightened the accusations of detachment and blame shifting.

Don't get caught inside the echo chamber

It is important to put the problem in perspective. Social media has given the angry public the ability to voice their frustration, but it can also give the impression that the problem is much bigger than it actually is. ‘It is easy to get stuck inside an echo chamber and perceive that the individual crisis within your business is blown out of proportion,’ says Giles Fraser, co-founder of Brands2Life.

This doesn’t mean you should bury your head and wait for it all to blow over, but it’s important to be measured in your responses and to carefully assess how far the news is travelling. By doing so, you can avoid unnecessary drama.

Look no further than Michael O’Leary whose pugnacious response to the Ryanair pilot strike caused a kafuffle on social media. Rather than simply addressing the concerns of worried customers, reassuring them that the company was working to resolve the delays, his comments only helped to draw further media attention to the crisis.

You could say that that is O’Leary’s style, and that the company didn’t suffer any tangible financial penalty from the media circus, but it surely was an unnecessary distraction for O’Leary and employees alike.


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Unfortunately there is no one-size-fits-all answer and sometimes you just can’t escape the fact that a freak event will throw the business temporarily into disarray.

Good crisis management means limiting the damage, but it doesn't mean managing the flow of information, avoiding the story getting out or about trying to provide all of the answers immediately. It is about maintaining good lines of communication, keeping things in perspective and remembering that despite our best efforts, we’re all human.


Image credits

Header: PhonlamaiPhoto/GettyImages

 

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