Learning the lessons from Britain’s biggest corporate crises

 

LEADING experts from some of the UK’s biggest companies and agencies attended a Crisis Communications conference hosted by PR Week to discuss the lessons from some of the biggest corporate crisis of recent years.

 

The conference heard from senior professionals involved in high-stakes situations, such as the shutdown of Gatwick Airport after drone sightings, which affected 140,000 passengers at a cost of more than £50m, and the turnaround of scandal-hit bank RBS after the biggest taxpayer bailout in corporate history. Former newspaper editor Phil Hall, chairman of The PHA Group, gave a fresh perspective on handling media relations in the post-Leveson age.

 

These are five key takeaways from the event:

  1. The first 30 minutes of a crisis is crucial – but an information shortfall often hampers the response. Working out what information you can rely on at the outset and how you will process information as the crisis unfolds is time well spent. As the crisis develops, set your objectives at the outset and prepare the ground with your stakeholders, managing expectations. Don’t forget that your staff can be your strongest asset as brand ambassadors, but also as your corporate conscience.

 

  1. A crisis often results from a relatively minor situation that has been mismanaged – a study of 100 corporate crises showed that shareholders and wider stakeholders were less concerned about the scale of the crisis than about its cause. They understood that a major reputational crisis was sometimes unavoidable – but they were less likely to be forgiving if a much smaller crisis was caused by mismanagement.

 

  1. In the social media age, a crisis can unfold with bewildering speed. An advert by cosmetics firm, Avon US, with the legend ‘Dimples are cute on your face (not on your thighs)’ was attacked on Twitter by influencer, Jameela Jamil. The company issued a lukewarm response two hours later; by the time it put out a more fulsome apology three and a half hours after that, the story had been seen by more than 1 million people. That tweet triggered 21,000 news stories with more than 90% negative sentiment. And, though the advert was nothing to do with Avon UK – which is a separate entity – their failure to disassociate themselves from it affected the company’s reputation.

 

  1. Crisis messaging should consist of four components:

Concern – we are empathetic

Control – we are handling the situation

Commitment – we will put this right

Context – there are mitigating factors

The mistake many CEOs make is wanting to put Context first – your customers don’t care about mitigating circumstances, you have to get the first three elements right to earn permission to be heard.

 

  1. Positive, pro-active media engagement is generally the best approach in a crisis – if you leave a vacuum, it will be filled by your most hostile critics. But media engagement has another advantage: journalists can be a great sounding board, a source of information and a good way of monitoring sentiment. It is a two-way process and keeping journalists close can help you understand the public mood.

 

  1. Don’t let lawyers control the messaging in a crisis – it’s a job for communications experts. Don’t be bullied into thinking you can’t apologize. Saying sorry is not the same as accepting liability.

 

 

By Tim Jotischky

 

Tim Jotischky is Head of Consultancy at The PHA Group and specialises in reputation management.

 

 

 

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