What’s the cost of a brand crisis? As video of United Airlines passenger Dr. David Dao being violently dragged from his seat went viral last month, the media – and a global audience of prospective customers – were shocked. It may not have hurt the airline’s stock price in the long term, but CEO Oscar Munos’s promotion to Chairman has been shelved, at least for the time being. United’s reputation storm came just days after brand Pepsi weathered a different kind of eruption. It was hit with a barrage of social scorn for its glitzy, but tone-deaf, ad featuring Kendall Jenner at a generic social protest.
And for months prior to the Pepsi and United incidents, another big brand, Uber, sustained a rapid series of reputation dings that left it struggling to get back on track. In addition to another viral video – this one of founder Travis Kalanick arguing with an Uber driver – the company was hit with ugly charges of sex discrimination in the workplace, detailed in a blog post by a female engineer who quit the company in frustration after only a year. To add to its woes, the New York Times exposed Uber’s stealth use of software to evade regulators in a major breaking story.
All three are large brands with the resources to come back from a negative situation. But each would likely agree that it’s better to prevent the situation in the first place—to be essentially “crisis-proof.” Problem is, it’s easier than ever for something that would once have been a local incident or a minor issue to blow up in a big way. Today, there’s always a smartphone nearby, the outrage machine is ready to get cranking, and the social mob is willing to pile on even before all the facts are known. When it comes to a brand reputation crisis, digital media is the great leveler. It can take down CEOs, celebrities, and regular citizens. It also threatens brands – their immediate and future sales, as well as long-term value and stock price.
While there’s no way to truly “crisis-proof” a corporation or brand, there are steps that make it less likely to happen and its impact less severe.
Easier said than done, of course, but according to the Reputation Institute, the majority of crisis situations are “simmering” rather than sudden. They’re more likely to arise from a pattern of misbehavior or echo mistakes that have happened before, but were ignored or covered up. One way an organization can protect itself is by empowering its employees. This is particularly important in companies like retailers and restaurants (and airlines!) with large and decentralized workforces that may experience high turnover. Those types of businesses are vulnerable to a local situation that spirals out of control. Not all can grant customer-facing employees the power to resolve a minor situation quickly, but those that can, should. When we hear about a customer being mistreated, we identify with him. It’s smart to empower those staff to resolve or escalate a complaint or unexpected situation by bending a rule, waiving a penalty, or granting the disgruntled consumer a quick benefit for their trouble. Which airline wouldn’t rather have a passenger tweet about the surprise upgrade (even at the risk of raising expectations) than get clobbered by public complaints?
There are undesirable incidents that can prompt customer complaints or negative coverage, and then there are crisis situations that can bring down a CEO or even a business. The two are not the same. A rude employee or even workplace misbehavior isn’t necessarily an existential threat for most companies. United will weather the latest tempest, in part because the traveling public have low expectations of the airline experience. But if you’re a baby food company and there are safety concerns about your product, that’s a dealbreaker. If you’re a beauty brand positioned around diversity and you discriminate in the workplace, that’s a dealbreaker. Those are the scenarios that should be prioritized when planning a crisis response.
Many armchair crisis experts will advise companies to have a crisis plan. That’s more complicated than it seems, because in today’s fast-moving business and media environment, many plans will be outdated by the time a real emergency hits. To crisis-proof your band, it’s best to cycle through one or more worst-case scenarios, based on prior experience and institutional knowledge of where the brand and the category are most vulnerable. The baby food reference above comes from a brand I once represented that had undergone a near-fatal situation in which bits of glass were found in its products. The problem was isolated, but once an outraged mom went public with her complaint, a deluge of reports of glass particles in products (most imagined) nearly brought down the company. Even decades later, when most employees who experienced the incident had retired, a strong crisis-preparedness mentality prevailed, from the C-level to every rank-and-file employee. It was in the DNA. And it showed in every aspect of the company’s business, from how it handled consumer complaints and managed sourcing, to manufacturing and marketing. Naturally there was a detailed crisis-proof plan based on the actual incident that included a communications protocol refreshed quarterly with simulations for key executives.
It’s astonishing how often a large organization fails the apology test. Most acknowledge that United made a bad situation worse with not one, but two attempts at a response that didn’t come close to being appropriate. Among other things, a critical ingredient in an effective public apology is accepting responsibility for the problem. Many companies stumble at that point because they fear legal repercussions or are warned by in-house counsel against admitting anything that could result in legal exposure. But the court of public opinion demands a true apology. Contrast United’s clumsy finger-pointing statements with Pepsi’s clear, swift, and sincere-sounding response to its failed ad. Just this week, comedian Kathy Griffin horrified Twitter – and the media universe – with a fake-gory photo featuring a “beheaded” President Trump. Griffin may not be a company, but, recognizing the damage to her brand, posted a swift and unvarnished mea culpa within hours of the photo. The apology video probably won’t win her any fans, but it will stop the bleeding, so to speak.
An effective crisis response plan usually involves an executive task force, which is a good thing. But when the stuff hits the fan, it’s crucial to move quickly. Too often, precious minutes and hours tick away while a company’s management team or Board struggles with how to respond to a business-threatening emergency. A single decision-maker, usually the CEO or a chief communications officer, should take a leadership role in these cases. In a true crisis, there may not be a 100% “right” or “wrong” decision; the reality is more like shades of gray. It’s more important to be swift and decisive than to be perfect. The enemy of the best crisis-proof response isn’t always a bad decision, but a late decision because paralysis has taken hold.
The crisis media spokesperson is usually not the same person as the crisis response leader. Any organization vulnerable to a high-stakes reputation threat should also have a trained media spokesperson so that if a situation does blow up, they’re prepared to respond quickly to media inquiries or explain a potentially complicated situation. In my experience, advance preparation and formal media training are helpful, and periodic refreshers are a great idea, but there are simply some individuals who are born for this work. There’s a skill to handling incoming questions under stress and within severe time constraints that I’m convinced is innate, not acquired. Pro-tip: your best media spokesperson may not be your CEO.
Sometimes crisis lemons make PR lemonade. A smart response to a negative situation can evoke public sympathy and even give a brand currency. The celebrated example is another airline debacle―the JetBlue “Valentine’s Day massacre” of a decade ago. JetBlue misjudged a weather emergency and was ultimately forced to ground scores of flights during an epic snowstorm. The debacle affected over 100,000 passengers and socked the airline with a blizzard of negative press. Part of its response to the meltdown was its famous Customer Bill of Rights—a coda that was covered nearly as widely as the original flight fiasco.
The Bill of Rights called for passenger compensation for a variety of departure and ground delays and – in a prescient move – also outlined reimbursement procedures for bumped passengers. JetBlue’s response is now a Harvard Business School case study, and, according to HBS associate professor Robert Huckman, it probably came out of the crisis better off than it was before, in terms of public perception. Explains Huckman, “There are many ways for a growing company to improve; going through a crisis is not necessarily the easiest path to take, but it does force an organization to evaluate its operating processes rapidly and decide where it needs to create greater formalization or structure.”
An earlier version of this post appeared in the AMA Executive Circle blog.