Business crises have dominated the headlines this year for some of the largest businesses in America. From the drip-drip of ongoing coverage of Wells Fargo’s travails to United’s shocking treatment of a passenger and the missteps of Uber’s CEO, we’ve seen major companies struggle to deal effectively with crisis communications.
Most observers agree that despite their massive resources, these organizations have failed to manage crisis communications effectively. Why? The fast and furious news cycle is a major reason. According to research by Netbase, on average it takes 21 hours before companies are able to issue meaningful external communications to defend themselves in a crisis. Cell phone videos can rapidly transform an incident into a crisis, as United and Uber both can attest. The global, digital world places new demands on companies facing reputational crises.
As a PR consultant who has worked with a variety of companies experiencing crises of varying degrees—from full blown reputational crises to embarrassing incidents, I have compiled a list of the Seven Deadly Sins of crisis communications in the digital age.
1) Slow response – We saw this in United’s case. Even when the information is incomplete, you have got to respond to issues quickly in the digital world. The longer you wait, the more outrage and suspicion can build. It took United a day to respond to the frightening cell phone video.
2) Not owning the issue – A major pitfall, especially for successful companies. The temptation is to minimize the issue, as in Wells Fargo’s pointing to “rogue employees” as being responsible for massive fraud.
3) Lack of empathy – The classic example of this is when the CEO of British Petroleum said in a now-famous TV interview after the Gulf Oil Spill “I want my life back.” Media jumped on this quote mercilessly, when it was uttered amid a scene of horrific environmental devastation and loss of life.
4) Front lines in the dark – The lack of internal communication by the White House about their immigration policy caused chaos when front lines personnel weren’t notified of the weekend order. Whether you agree with the policy or not, the lack of advance communication with the front lines only worsened the sense of crisis.
5) Lack of corrective action – No amount of communication will resolve a crisis, unless there is clear, decisive corrective action. Sometimes the answer can be a third-party investigation. For Uber, the only recovery from repeated missteps was for the CEO to step down.
6) PR not at the table – When the top communications officer or outside PR counsel is not engaged in early in crisis situations, leaders do not get the full picture. Often the loss of reputation is a bigger risk than litigation.
7) Communications gaps – Even when there is nothing “material” to report, stakeholders and media expect to get status updates on crisis situations. Absent information, rumors fly and speculation about the worst possible outcome develops.
Communications alone is seldom the entire solution to a business crisis. But lack of effective communication can transform a brush fire into a conflagration—permanently damaging a company’s reputation. As Warren Buffett said, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
By Patricia Harden, President