December 16, 2015
No company or organization is immune to crises, whether they’re product recalls, accidents, attacks, inappropriate behaviour by management or staff, or scandals. The recent Volkswagen emission situation illustrates the latter. It plunged into crisis mode after the automaker’s efforts to cheat pollution tests were caught and made public in the media. This significantly affected VW’s reputation and led its stock-market value to tumble. Although the CEO quickly stepped down, the crisis left customers confused and betrayed.
While it’s difficult to avoid a crisis altogether, there are a number of things to do in order to manage a crisis and mitigate damage in the best possible way. Here are three:
1) Anticipate the Worst – and how you’ll handle it – well in advance.
Carefully preparing a crisis response plan is the single biggest favour you can do for your organization. A plan outlines how you will handle everything from operations to communications during the crisis. A thorough crisis communications plan helps you get your responses to media and other audiences fast if something erupts. It’s like an earthquake kit. You may never use it, but if you don’t have one and the quake hits, you’re in big trouble.
2) Take Ownership
It’s vital for leaders of a company in crisis to take charge of the situation. Burying your head in the sand won’t make the problem go away. You must make it clear to all affected that you’re doing everything in your power to resolve it, especially if there are safety issues. If it’s determined you’re at fault, say “sorry.” Then show your customers how you plan to rectify the problem. Senior management or owners should speak to the media to demonstrate they’re acting on the crisis. That’s vital for the long-term reputation of the organization.
3) Communicate often, with the right tone.
Frequent and transparent updates are key to handling a company crisis. Customers will only become more frustrated if they’re kept in the dark, so regularly communicated updates are a good way to prevent this. When Malaysian Airlines Flight MH370 disappeared in 2014, the airline communicated that no one survived the flight via impersonal text messaging (after contacting some family members by phone). The text message was mentioned by numerous news media, which suggested a lack of sensitivity and transparency. Communications in the middle of crises should be sensitive, empathetic and not about the organization – it’s about the people affected. Ex-BP CEO Tony Hayward’s famous “I’d like my life back” line in the midst of the Gulf oil spill illustrates that self-centred sentiments are clunkers.
There are many lessons to be learned from how others have handled their crises. Companies need to first have a clear crisis plan laid out well in advance, and it must deal with communicating to media and stakeholders. They need to take ownership if a crisis happens. And finally, they must be transparent, truthful and sensitive when communicating. These lessons will go a long way towards ensuring the organization survives the crisis.