Crisis Communications: Avoiding the Titanic Scenario

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Crisis CommunicationsAvoiding the Titanic
Scenario

• Philip J. Kitchen
• University of Hull, UK
• p.j.kitchen_at_hull.ac.uk

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Ansett Example
In 2001, the now defunct airline, Ansett, was
enmeshed in a major safety crisis when its fleet
of 10 Boeing 767s was grounded by the Civil
Aviation Safety Authority (CASA) after safety
checks revealed engine pylon cracks. The
grounding caused flight cancellations, mass
disruption of passengers, reputation damage and
multi-millions of dollars in lost market share
for Ansett.

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Pan Pharmaceutical
The authors describe the mid-2003
government-ordered withdrawal of almost 2000
complementary and alternative medicines, across
multiple brand names, in Australia and New
Zealand. See Eagle, Rose, Kitchen, Hawkins,
Regulatory Oversight or Lack of
Foresight? Implications for Product Recall
Policies and Procedures, Journal of Consumer
Policy, 2005.

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Global Ads and Importance of Topic

• Call for Papers
• An International Conference on Corporate
  Responsibility and Global
• Business Implications for Corporate and
  Marketing Strategy Hosted by London Business
  School
• July 13-14th, 2006
• London Business School is pleased to invite
  submissions to the third in
• a series of international corporate
  responsibility conferences
• (following the Haas conference in 2005 and the
  Boston conference in
• 2003). Topics for inclusion again range widely.
  We are particularly
• interested in papers that explore the
  implications of corporate
• responsibility, globalisation and global business
  for business and
• marketing strategy. Research papers can be
  either empirical or
• conceptual. A selection of papers presented will
  be considered for a
• special issue of the California Management
  Review. Proposal submission
• deadline (1-page abstracts) is December 31st,
  2005.

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The Nature of Corporate Crisis and Managements
Response

• Crisis is defined as
• a people-stopping,
• show-stopping,
• product-stopping,
• reputationally defining event,
• which creates victims
• and/or explosive visibility
• (Source Jim Lukaszweski, in Kitchen Schultz,
  2000)

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Value and Belief Systems Affect Crisis Response

• Avoid poor, delayed, or unnecessary communication
• NEED
• 1. An effective communication policy model
• 2. A method for determining prioritization of
  actions and communicating during urgent
  situations
• 3. An accountability process, which can move the
  entire response to conclusion, while
  simultaneously regaining credibility and
  re-establishing reputation.

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1. Crisis Communications Policy Model

• Standards
• Openness, accessibility
• Truthfulness
• Responsiveness
• Transparency

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2. Communication Priorities

• Address fundamental cause
• Assist and care for those directly affected
• Inform and involve employees
• Alert those indirectly affected
• Manage the news media

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3. Accountability

• Seven Essential Steps
• Candor
• Explanation
• Declaration
• Contrition
• Consultation
• Commitment
• Restitution

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But, there are other (well-known) and avoidable
models

• Behaviour
• 1 Denial
• Victim confusion
• Testostoris
• Arrogance
• Search for the guilty
• Fear of the media
• Management by whining around

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Community versus corporate priorities in terms of
timeline

• Community Priorities
• High
• 1 Health and safety 7
• 2 Natural environment 6
• 3 Social environment 5
• 4 Cultural environment 4
• 5 Technical considerations 3
• 6 Financial considerations 2
• 7 Economic considerations 1
• Low
• Corporate Priorities

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An (unnamed) example Fast Food

• Day 1 Sicknesses, denial, media speculation,
  reluctant statement. Notify Dept of Health.
• Day 2 Admit possibility, blame suppliers,
  caution to media.
• Day 3 First deaths reported, meat inspectorate
  condemned, increased ads, blame industry.
• Day 4 More deaths. Company cites safety codes.
• Day 5 More deaths. Company sponsors study of
  food safety. Refers to problem as a government
  problem. Whistleblowers speak out.
• Day 6 More deaths. Litigation commenced by
  consumers, criminal charges levied. Company
  request consumers come to them, not government,
  media, or law.
• Day 7 Company forced to close down

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Dont Ignore Issues and Crises

• An issue ignored is a crisis ensured
• Dr Henry Kissinger

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Circumstances

• Disaster
• Criminal acts
• Terrorism
• Ethics failure
• Financial / business problems
• Clash of cultures
• Science/Consumer activism
• Changing public values
• Demands for public consultation
• 24/7 intrusive media
• Dont trust experts or government

Equal real or perceived risk
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Risk issue life cycle
Opportunity to influence
Difficult to influence
Formal constraints
Period of increasing awareness
Media coverage
Pressure
Potential
Emerging
Dormant
Current
Crisis
Development
(Source Tom Watson, 2005, used here with
permission)
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Now apply Accountability or Avoidability
Opportunity to influence
Difficult to influence
Formal constraints
Period of increasing awareness
Media coverage
Pressure
Potential
Emerging
Dormant
Current
Crisis
Development
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•  
• Seven years after its original launch,
  Mercedes-Benz has introduced an all new A-Class.
  And as the old one managed a staggering 1.1
  million sales, the importance of this new A-Class
  to Mercedes overall business is huge. Given the
  history of the original A-Class, this one needs
  to be right. And right from day one. When the
  original was launched in 1997, it went straight
  onto the front page of national papers across
  Europe. Unfortunately, that was because it had a
  tendency to fall over whilst in the hands of
  Scandinavian journalists attempting the famous
  'elk test' avoidance manoeuvre. Mercedes went
  into damage control mode and within weeks, had
  engineered an electronic stability control to fix
  the problem. Still, the damage had been done,
  with some journalists criticising the ride and
  handling of the subsequent car. Worse was to
  come, as question marks began to appear over the
  A-Class's quality, from a standpoint of cabin
  materials as well as build. Enough time has
  passed that Mercedes now feels free to make elk
  jokes at its own expense. But tellingly, the
  first thing journalists were told about the new
  car was how good the latest generation of ESP
  (electronic stability control) is. Read on to see
  whether issues over quality, ride and handling
  have also been buried.

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There are some dark and disturbing clouds on the
horizon. The darkest is the tendency of many
large MNCs to make international public
relations management the victim of benign
neglect.As a result of this neglect (this
function) has not developed in large corporations
as it should. While this may seem to bode well
for the public relations agencies and
consultancies that are filling the void, I
believe that over the long term it can spell
trouble Source Foster, cited in Wakefield,
1999)
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Raise - not the Titanic, - but the Corporate
Umbrella

• The ribs of the umbrella refer to the
  integrated communication activities in support of
  the overall communication system. Lose,
  mismanage, or damage one of the communication
  ribs such as crisis management ., and the
  whole communication coverage of the organisation
  becomes unstable in the winds of change,
  allowing turbulence to impact on corporation,
  strategic business, and brands
• Source Kitchen and Schultz - Raising the
  Corporate Umbrella, Palgrave-Macmillan, 2001.

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• Questions or Comments?

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