Crisis management
What is crisis management?
The process by which a business or other organization deals with a sudden emergency situation
What mistakes managers often take?
Distancing themselves from the problem: if your company screwed up, admit it. One of the most devastating ways to destroy a reputation is to say that you're innocent.
Lacking quick, tangible action to remedy the situation: consumers want results, not excuses. Waiting too long to respond creates additional unwanted uncertainty and that can scare people and make them angry.
(do something visible to show them that the company is actively working)
Looking insincere in front of the media: a smug appearance from a pompous executive during a crisis is the last thing a company needs (sincerity goes a long way in earning the customers' trust)
Writing a boring news release and letting things be: a simple everyday news release is not going to do anything, (the PR department must use all platforms to connect with the public and give them all information they need)
Keeping the CEO out of view: company's CEO in many cases its identity and the big taking head. Without a visible, accessible CEO during a crisis people have nowhere to turn to
Having vague communications: it is frustrating for consumers when a company speaks in generalities. When there is a problem, address all the specifics, that is what people want to know and what is your plan for tomorrow
Ignoring customers' questions: even if you don't know the answer yet, say something. Lack of engagement can crash the company during crisis. If you honestly don't know what's going on, then say so and tell the public exactly what you are doing to find out.
Stages of crisis management model: possibility of crisis management beforehand
Audit: asking the question "what can go wrong?"
Reduce: having identified what can go wrong, you need to know "how we can reduce the likelihood that of happening" and "can we avoid the avoidable" (insurance, contingency plan, management team
Identify : to recognize that there is indeed a crisis
Containment: you want to try to contain crisis as best as possible, think about actual problem and communicate (!)
Resolving: to identify what is the reason, cases that can come from within the organization (design, material, supplier, security, tampering)
Recovery: rebuild the reputation externally, restore the confidence of customers and stakeholders, employees
Types of crisis
Technological problems: a result of break downs in the common scientific and technological tools
Unemployment rate: unstable economical situation in the country such as financial or political crisis
Financial problems: not having funds to pay its dues such as paying dividends, interest or repayments of loans
Natural crisis: natural events such as earthquake, tsunami,
Personnel crisis: serious individual misconduct and unethical or illegal activities by key players
Systematic crisis: supply chain, quality control, customer interactions
Contextual crisis: terrorism, rebels, political and geopolitical problems etc.
Confrontational crisis: poor cross-department communication, disobey of the top management, boycotts
Crisis of malevolence: lack of supervision, employees partake in criminal activities (theft, forgery spreading rumors to press etc)
Organizational misdeeds: when top management take wrongful decisions deliberately to serve their ulterior motives
Crisis management strategies
Disclosure it to the public to resolve the crisis favorably, to control the damages, and to rebuild public reputation
Tell the whole truth to the public about the situation, concealing facts in most cases backfire
The company should immediately create a crisis management team and direct them all requests from press to ensure that the company speaks at a single voice
Public statement should include technical aspects, how people may be affected and information for customers
The CEO might offer the media an interview where all questions answered, TV or radio can help to solve the crisis effectively
To hire a PR firm to consult you about crisis management techniques or to buy an advertisement in print and internet media to give the information about company's policy
Identify your key spokesperson and respond quickly with this message to your personnel
Understand the potential impact, think about key messages and key decisions, overall corporate communications strategy
Create a means for monitoring
Crisis management examples
Pepsi presented a brand new advertising campaign featuring the mega-celebrity Kendall Jenner. Within 48 hours the video got nearly 1.6 million views on YouTube. In the video, Kendall throws off her blond wig and runs away from a photo shoot to join a protest in the street. The most epic moment of the video is when Kendall hands a can of Pepsi to a police officer, who takes a sip and smiles at his partners.
Pepsi removed the video from its official social media channels and made a statement: “Pepsi was trying to project a global message of unity, peace, and understanding. Clearly, we missed the mark and we apologize.”
On January 31, 2017, one of Gitlab’s software developers accidentally removed client's’ data from the primary database server. In addition, several backup attempts didn't work and the company lost access to a huge amount of data. Gitlab.com’s service was not available for 18 hours, which was unacceptable for the company. Just to stress the gravity of the issue, Gitlab’s clients are such companies as IBM, Sony, NASA, Alibaba, Invincea, Jülich Research Center, O’Reilly Media, Leibniz-Rechenzentrum (LRZ) and CERN, and it was their code that Gitlab accidentally deleted. The crisis started the moment Gitlab announced the issue through the social media.
I can’t help but admire how Gitlab managed the crisis perfectly. How did they do it? First, Gitlab announced to their clients and their social media audience that the issue had occurred. Next, they gave a detailed explanation and told what happened and how they planned to fix it. A couple of days after the incident was solved they published the detailed explanation with the lessons they learned.