RT @boardeval: RT @boardeval: See the FRC 2016 corporate governance review at our website https://t.co/vKv91G0Xvu Interesting reading!!

Crisis? What crisis?

Jean Pousson looks at how scandals and crises have affected organisations and suggests some ideas for executives caught up in that process. October 2010.

Toyota, Tiger Woods, British Airways, Martha Stewart ,BP, the Catholic Church. These all share one thing in common. They have been subjected to crises, bad press and inevitable brand and reputation damage .In the current age of multimedia and social networking sites where all stakeholders have instant airtime, these problems very often get magnified at a rate that all the PR in the world cannot keep pace with. Add to this the reluctance of executives to act quickly while they consult lawyers and accountants, you have a cocktail for immense reputational damage. It may have taken years to build up a good brand, but that brand equity can be eroded in five minutes, or altogether destroyed. Hallowed names like Perrier, Hoover, Merck and Ratners come to mind. In some extreme cases executives get executed! (The Chinese dairy industry scandal in late 2008?)

Here are some ideas: “First get the cow out of the ditch. Second, find out how the cow got into the ditch. Third, make sure you do whatever it takes so the cow doesn’t go in the ditch again” was the advice from Anne Mulcahy, former boss of Xerox, as she tried to revive the company’s fortunes (The Economist. February 2010) Sound advice and to be followed in that order too.

React quickly. Speed is crucial. HSBC in the last few weeks, without hesitation ,took out extensive newspaper advertisement promising their travel insurance. SouthWest Airlines ,the pioneer low cost airline,within days of September 11, did not ask for Federal Aid or lament about the future industry woes, but instead promised full refunds to all their customers who did not want to fly again. No questions asked.

The Boss needs to take charge and be visible. Willie Walsh, CEO, of British Airways, made himself visible and accessible to customers and Press alike during the entire cabin crew strike and the Terminal 5 launch fiasco. Sir Richard Branson, upon a rail derailment of one of his trains, was on site within hours. And apologising is ok. Customers love a redemption story. As long as the apology is heartfelt and genuine.

Acknowledge the problem and don’t blame other constituents even if you can. Ford/Firestone? Remember that crisis? First they blamed customers for not driving the cars properly and when that didn’t work then they blamed each other .Not smart! I was on a plane recently which had been delayed and before take-off the captain came in, as opposed to hiding in his cockpit, and apologised for the late departure which had not been caused by an “operational issue” or the perennial late arrival of the aircraft, but by a c**k up by the airline. Laughter ensued and not a single passenger complained. He had been honest and upfront. Not difficult!

The story is told about a White House employee who was having relationship issues. Her partner hired a small plane towing a banner which read “Jill please come back. I am nothing without you. Jack ”She didn’t! Wrong message! It was still too much about him and not enough about her/them. Lesson? Put the customers first. See it from their point of view. If I am delayed on an aircraft, I have no interest about the Airlines’ operation issues. I want to know that you (ie the Airline)cares and I want to know when are you getting me to your destination (and by the way I have also no interest about knowing at what altitude you are going to fly!)

Good luck!