Businesses are starting to understand that the value of a lost reputation can be far greater than the cost of remaining silent or going to court
If United Airlines’ CEO didn’t know this before, he does now: crisis response can break a company’s bottom line.
It would be a gross understatement to say that Oscar Munoz mishandled the situation that erupted when a passenger was dragged bleeding from an aircraft – a “re-accommodation,” in his words. Munoz doubled down in an internal email, taking his employees’ version at face value and referring to the passenger as “belligerent.”
Crisis Management 101: internal emails leak.
As United Airlines demonstrated, a company’s response to an issue can mean the difference between a crisis and disaster. Responding doesn’t mean putting your company in a litigious position. It means reassuring the public by demonstrating leadership, empathy and action.
Research consistently shows that there is less reputational damage if an impacted organization is the first to report a crisis and/or respond appropriately and quickly. Response time is considerably shorter now with the viral nature of social media that fuels the court of public opinion – a court where reputations are defended and damned.
Today, everybody owns a media channel, and a mob delivers swift, sometimes unforgiving justice without considering facts and without a presumption of innocence until proven guilty.
Businesses are starting to understand that the value of a lost reputation can be far greater than the cost of remaining silent or going to court. As such, they are rethinking their crisis teams. Lawyers used to take the lead in crisis management, often maintaining silence to respect the legal process, all while client reputations unravelled. Today, communications strategists work in tandem with lawyers – before a crisis strikes – to assess and correct vulnerabilities, test policies and procedures and prepare communications strategies.
When it comes to issues management, just like in an earthquake, preparedness is key.
Let’s put to the test United Airlines’ overbooking policies and escalation procedures. When a passenger refuses to volunteer a seat, calling the police appears to be part of United’s escalation procedure, but it also means the airline relinquishes control over its own process.
As we saw in the Chicago situation, that doesn’t serve the airline well.
It is a fact that few companies have responded as poorly to a crisis as United, but it is also a fact that few companies manage crises well.
In 2008, Canadian company Maple Leaf Foods was at the centre of a tainted meat scandal that killed 11 people. CEO Michael McCain released a video and held a news conference. In addition to an apology and offering condolences, McCain said, “Going through the crisis, there are two advisers I’ve paid no attention to: the first are the lawyers and the second are the accountants.”
That same year, McCain was named the Canadian Press’ Business Newsmaker for his handling of the crisis.
By contrast, XL Foods’ owners remained silent – even hiding – after E. coli contamination prompted the largest beef recall in Canadian history. Bad publicity plagued the company for years.
A recent crisis management case that will likely be studied for years is Volkswagen’s failure in properly responding to an emissions cheating scandal of its own making.
As for United Airlines, the company goes down in history as one of the world’s worst public relations disasters. The CEO’s response made all the difference.
Renu Bakshi (firstname.lastname@example.org) is a communications strategist who specializes in crisis management and media training.