Brands in Crisis – How to stay in Control when Disaster happens

Product failures, emissions cheating, deadly accidents, violence against airline passengers. It seems that brands are getting into hot waters almost on a weekly basis. Once you face such a disaster, swift action is needed. We are living in times where news crosses continents within seconds. In order to protect your brand from dramatic fallout and serious long-term damage you need to stay on top of the story when things go wrong, be transparent, honest, organized and decisive. Otherwise your brand might be expelled from the market. Remember what Warren Buffett once said: “It takes 20 years to build a reputation and five minutes to ruin it”.

In March 2017 United Airlines CEO Oscar Munoz was named U.S. Communicator of the Year by a well-known magazine. Four weeks later United´s “Friendly Skies” were hit by nasty turbulences. And Munoz completely mismanaged a PR crisis that turned into total disaster. A passenger who refused to give up his seat on a flight from Chicago to Louisville for a compensation of 800 Dollars was removed with force and dragged down the aircraft´s aisle, his face smeared in blood. The video with the incident went viral on social media platforms and produced a worldwide firestorm. Munoz initially apologized for “having to accommodate” customers. In a letter to the employees he described the passenger as “disruptive and belligerent”. It took two days until the CEO issued a comprehensive apology, labelling the episode “truly horrific”. But by that time it was already too late. The credibility was lost. “Munoz apologized because of the immense public pressure, but given his initial response two days earlier there was no credibility left. So the most important objective of crisis communication – being credible – couldn´t be achieved any more”, explains globeone´s managing director Dr. Niklas Schaffmeister. Weeks after the incident United is still struggling from the fallout. Users on Twitter created snappy hashtags and quipped: “Not enough seating, prepare for a beating”. United´s stock price lost six percent in the days following the incident, before it recovered.

The UAL episode reminded the audience of other recent PR disasters, the most prominent and disastrous being Volkswagen´s emissions cheating scandal. The scandal cost Volkswagen billions of dollars, turned US regulators against them, triggered thousands of claims and charges and still keeps the company on edge. In February 2016, VW´s communications boss Hans-Gerd Bode called the crisis an event “the company was not prepared for”. Volkswagen had to enlist the help of three different public relations firms to manage the crisis. The company even retracted its claim “Das Auto” in order to realign its core brand.

Recent years and months were filled with PR crises of major companies. Among them BP´s Gulf of Mexico oil spill, General Motor´s defective ignition switches, Google´s fight with European regulators and Air Berlin´s cancelled flights. Once disaster strikes, your brand has nowhere to hide. So what can you do to save your reputation and get back to normal operations without long-term damage to your brand? Here are the most important steps that need to be taken – and taken seriously:

Before the Crisis

You always need to be prepared. Long before the crisis hits you need to set up a plan that contains exact steps to be taken in case of emergency. Identify a response team and precisely assign specific tasks to the members appointed. It needs to be absolutely clear who makes the ultimate decisions. Each member of the team needs all the contact details of the whole team. This is a critical measure since your executives are travelling often. Define exactly which media and social platforms you need to contact to get your side of the story out. The plan must be in written and known to everybody in charge. Organize periodical drills in order to be prepared well.

Mid-Crisis

Monitor what traditional media, the social channels and your customers say. Be present around the clock in order to react quickly and show that you are taking concerns seriously. Don´t just fix the problem, let everybody know that you are doing it. The more senior the executive who responds, the better.

Admit it. Right away. Any crisis must be quickly contained. The longer you need to react the bigger the damage will get. The situation might spiral out of control. A large product recall is better than putting more people at risk. The best way to start is to admit what happened and be honest. Let everybody know that you are determined to find out what really happened. It might be very helpful to bring in outside expertise. Inviting independent experts to the fact finding will give your credibility a big push. Show that you cooperate with external investigators. If you were wrong and admit it, your customers and the media will be more willing to listen to what you have to say. It is important that you recognize how serious the incident is. This is the best way to achieve forgiveness.

Explain what you are about to do and how you want to remedy the cause of the problem for good. People also need to know the context of your decision. Make sure to communicate that you firmly have your customers in mind. Try to examine the situation with the perspective of your customers and act accordingly. Let everybody know you are dealing with the emergency this way.

After the Crisis    

Don´t take your eyes off the problem once the worst is over and you feel tempted to relax. Review the crisis plan and bring it up to date. Inform customers and the public about ongoing efforts to prevent a similar crisis. It is important to demonstrate that the corporation learned from the bad experience. Set up a list of possible actions that you need to take long-term.

The bottom line: In many of the PR and brand disasters on record, crisis communication was neglected by the board of executives which caused great harm to the respective brands. In this respect United Airlines is a case in point. It is therefore of utmost importance to embed crisis communication into your overall corporate communication strategy from the beginning. “Only if you integrate crisis communication into your encompassing communication strategy you can rest assured that the employees in charge have the full attention of the board”, adds Schaffmeister. And don´t forget: If you built a solid brand it will protect you in times of crisis. But if you don´t protect your brand during a crisis, for example by sitting back and waiting, you might destroy it.

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