Crisis management 101: how to handle a public relations nightmare
EDGAR goes behind the scenes of crisis communications to find out how the professionals deal with a PR emergency.December 6, 2015
When an organisation is rocked by a scandal, it’s inevitable the fallout will be messy, and the aftershock can be long lasting.
A public crisis brings with it a great deal of change, a great deal of scrutiny, a great deal of responsibility, and a great deal of remorse. Not to mention the damage it can do to your share value.
What’s worse, the great PR scandals get remembered. Even if the details become blurred, and the outcome is hazy, nine times out of ten, someone can attribute a brand to a crisis.
Right now, Volkswagen is finding that out, as it enters the recovery phase of its emissions scandal. The German carmaker was accused of using a technological device to cheat emissions tests on thousands of its models. Since it was outed, the media attention has been on the C-level executives, but few people stop to think about the effect these crises have on the thousands of employees VW has around the world.
Jeff Chertack is one of the world’s leading experts in handling scandalous situations and is fascinated by the chaos of a crisis. An American stationed in Doha, Qatar, he’s the regional corporate practice director for Memac Ogilvy Public Relations. He’s worked in multiple continents and has dealt with multi-million dollar organisations across numerous industries. He’s seen it all. And Jeff loves a crisis.
“Absolutely,” he says with just a hint of a smile. “I enjoy the pressure of a crisis. Not because I’m sick, but I believe it’s a good litmus test to see how strong your brand is. A crisis can actually have a positive impact on a brand. It can strengthen someone’s attachment to a brand if it goes through something and communicates in a way people feel is honest and true. I find that very interesting.”
He uses the example of American businessman and current presidential candidate, Donald Trump, to demonstrate the power of committing to your image and brand. “That guy went bankrupt, and there were allegations of womanising. But somehow he has stayed true to who he is and that appeals to a certain demographic who reward that.
“I’ve been doing this for about 15 years and there’s a lot more crises now than we had five or 10 years ago. The reason for that is social media,” he says. “Social media has created a crisis of crises. Imagine you have a bad lunch experience. Ten years ago you and five of your friends would know about it. But today, immediately, anyone can know about it. When I started in the industry in the US about 15 years ago we’d be ruled by morning and evening news cycles and we might have between five to 12 hours to respond. Today we have minutes.”
Jeff has identified a step-by-step process of handling these sorts of situations.
Facts, not feelings
Jeff believes the first step is to remove the emotion of the situation and get down to the facts as soon as possible.
“As soon as you can get out of the emotional phase and into the factual phase it becomes much clearer about what should be done,” he says. “No good decisions are made under a siege mentality. My degree is in psychology, and it’s incredibly helpful. Often we’re acting as a counsellor.”
The emotion is what consumes the CEO when the first hint of a crisis appears. The “we must say something” attitude is the most common, Jeff believes. The best thing to do is to take a breath and try to establish what the situation actually is. Is it a crisis at all, or is it just an issue?
Preparation is key
“Companies that respond well are those who are quick out of the gate to take responsibility and not hide things,” Jeff reveals. “That’s where social media can help, because you can put out a message that’s unfiltered directly to the consumer. I can put a CEO in front of a camera in his office and have a video on YouTube, tweet it, put it on Facebook and send it to reporters within 15 minutes.”
Turning response into recovery
One of the trickiest parts of dealing with a scandal is knowing when to move from response to recovery.
“You don’t want to spend too much time responding, but also you don’t want to move too quickly, because most people feel like you should still be dealing with the crisis,” says Jeff.
He believes there’s no rule on when to make the move – it depends solely on the situation. “It’s a gut feeling. But we listen. What is the consumer saying right now? This is where social media again comes in handy. If the sentiment is largely negative, and the interaction and engagement is still high, it’s basically telling you that people aren’t ready to forgive; therefore you’re not ready to move into recovery. When it starts to die down, you can think about moving to recovery.”
Phil Hall, founder and chairman of PHA Media, is a public relations expert. He says that today’s Google-enabled world poses the risk of turning a ripple of negative feedback into a tsunami of public antipathy.
“Reputation management is now the most lucrative and in-demand area of public relations,” he says. “Reputations that have been built over many years can be destroyed in a day, largely because social media has given the public a voice. Journalists no longer need to hunt down critics, they can find them in abundance on social media platforms, so where an isolated complaint may have caused a ripple before, it can now gather momentum and create a tsunami.
“The first rule of crisis management is to face the facts. So many companies and individuals will try to cover up their issue. In my experience the public will forgive a mistake but they will not forgive lies and deceit once the problem is public.
“Volkswagen has recently endured a huge media crisis, but in my view they handled the situation as well as they could by being transparent once it was public, firing the chief executive and ignoring the cost to the company and taking steps to make sure very car is tested and the software that has misled the public is removed.
“Too many big companies try to bury their heads in the sand and hope a crisis will disappear. It just doesn’t work in a Google enabled world.
“We always encourage clients to put a perspective on the crisis. It may seem the end of the world today, but the media moves on. Explaining to journalists that the problem is a rare event – for example the food poisoning in the restaurant chain is the only incident in 100,000 meals served – often makes them calm down and take a more reasoned view which will reassure public confidence.”
Corporate crises that caught the world’s attention
BP’s Deep Water Horizon spill
In 2010, BP found itself responsible for the largest accidental oil spill in history. After an explosion sunk its Deep Water Horizon oil rig off the Gulf of Mexico, oil spilled out on the sea-floor for 87 straight days. In 2014, BP publicly stated the cleanup was complete. However, the United States Coast Guard reprimanded the company, stating there was still much work to be done.
The US Department of Defense sends a low-flying aircraft over the Manhattan skyline
In 2009, the Department of Defense gave people the opportunity to photograph the famous Air Force One by sending it over the New York skyline pursued by a fighter jet. Trouble was, they didn’t alert the people of New York. In the post-9/11 era, the scenes sent the city into chaos, prompting President Obama and Mayor Bloomberg to publicly comment. The employee who organized the stunt was fired.
The Enron audit scandal
The largest bankruptcy case in the history of the United States at the time, the energy company managed to hide millions of dollars in debt from failed deals to its board of directors by using accounting loopholes and poor financial reporting. After its stock price plummeted from a high of $90.75 to just under $1, shareholders filed a $40billion lawsuit. The company filed for bankruptcy shortly after a failed buyout attempt from its rival Dynegy.
The US pizza chain felt the full wrath of the internet in 2009 when two of its employees filmed themselves doing crude things with food in the kitchen. The video was uploaded onto YouTube and within hours had more than one million views. The core issue for Domino’s Pizza was that it didn’t make a sound until two days later. At which point the negative response to its brand was already seemingly out of control. It wasn’t prepared.