BOB ROEMER
[Fall 2006, Volume VIII, Issue 1]

Students in the Crisis Response Practicum in Northwestern University’s Integrated Marketing Communications (IMC) graduate program are required to analyze a crisis and present their findings to their colleagues. Over the past seven years they have researched more than 100 crises and, as you might imagine, have identified some similarities that shed light on why organizations succeed or fail in crisis response. Here are some of their findings.

EVENT VS. BEHAVIOR

In many cases, an organization’s response to an event can shape public opinion even more than the event itself.

In the wake of Hurricane Katrina, the focus of media coverage quickly shifted from rescue and recovery operations to the government’s slow response to the disaster. Basing their opinions primarily on that coverage, most of which was critical of the response efforts, two in three Americans (67 percent) believed that President Bush could have done more to speed up those efforts. About half of those surveyed (51 percent) were also critical of the response by state and local governments in Louisiana and Mississippi. They formed those opinions in less than one week after the storm.

When Swissair Flight 111 crashed off the Nova Scotia coast en route from New York to Geneva, Switzerland, in 1998, the airline was given high marks for its attentiveness to the needs of the passengers’ families, its willingness to communicate the actions it was taking to support the families and its cooperation with Canadian and United States authorities. Two years earlier, when TWA Flight 800 crashed into the Atlantic Ocean shortly after take-off from Kennedy Airport in New York City, the airline was widely criticized for not providing sufficient information and support to the families of the passengers. Media reports about the Swissair crash favorably compared the company’s response to that of TWA, emphasizing Swissair’s open and compassionate public response.

MOSTCRISES ARE PREDICTABLE

Although hindsight is usually 20/20, more than three-quarters of the crises IMC students analyzed could have been predicted based on the organization’s business or sector. That’s not to say that crisis planning and preparation should focus solely on those scenarios that are common to your industry, but it is a good starting point. Given its business, TWA should have been better prepared to effectively respond to a crash of one its aircraft.

In addition to being predictable, most of the crises analyzed had warnings of impending trouble that, in many cases, were dismissed or ignored. Companies failed to heed these warnings for two main reasons: 1) Corporate culture was reluctant to bear bad news; and 2) Employees were neither trained nor expected to recognize the indications of trouble. Consider the following examples:

Three years before Ford announced a massive recall in the United States involving the Explorer sport utility vehicles equipped with Firestone Wilderness A/T tires, officials at the company were aware of a growing number of fatal accidents due to tire tread separation on the popular SUVs in Venezuela and Saudi Arabia. Within three years the problem spread to
16 countries.

In 1985, Boston’s Cardinal Bernard Law was a sponsor of a study for the U.S. Conference of Catholic Bishops on the nature and scope of clergy engaging in pedophilia. The report was “laced with clear and dire warnings – often in capital letters – about the incorrigible nature of priests who sexually molest youths.” The bishops essentially ignored the report. Seventeen years later, Law was accused of covering up the very same behavior that rocked the American Catholic Church. He subsequently resigned.

The New York Times senior editors Howell Raines and Gerald Boyd received repeated warnings from supervisors about the questionable reporting and unprofessional behavior of reporter Jayson Blair for more than a year. The scandal involving Blair damaged the venerable newspaper’s reputation and cost the two editors their jobs.

LITIGATION IS NOT ALWAYS THE BIGGEST COST OF A CRISIS

There is no question that liability, damage awards, settlements and associated legal fees resulting from a crisis can be staggering. However, the costs of an inept response to a crisis and the impact of a damaged reputation can equal, and in many cases exceed, those stemming from litigation. Compared against a reported $590 million legal set-aside, the Firestone tire recall cost Ford Motor Company $209 million to halt production during the third quarter of 2000 to make additional replacement tires available, $30 million in administrative costs and $2.1 billion to fund an additional, unilateral tire recall announced in May 2001.

ACTIONS AND COMMUNICATIONS
Neither actions nor words alone can successfully defend an organization’s reputation in a crisis.

In its response to the 1989 Exxon Valdez oil spill in Alaska, the oil giant poured an enormous amount of resources into the cleanup project, including people, equipment and money. However, the company went out of its way to avoid the media. As a result, people around the world who received information about the environmental disaster via the media assumed Exxon was shirking its responsibility or was hiding the true extent of the disaster. This lack of information translated into thousands of outraged customers cutting up their Exxon credit cards, sending the shards to the company and taking their business elsewhere.

In December 2002, then-Senate Majority Leader Trent Lott attended South Carolina Senator Strom Thurmond’s 100th birthday party. During the festivities Lott made a comment referencing the honoree’s 1948 presidential campaign in which he ran as a segregationist candidate. “I want to say this about my state. When Strom Thurmond ran for president, we voted for him. We’re proud of that. And if the rest of the country had followed our lead, we wouldn’t have had all these problems over all these years.”

The remarks, viewed to be an endorsement of racism, set off a firestorm of criticism, with many of the Mississippi Republican’s colleagues in the Senate calling for his resignation as majority leader and, in more than a few cases, his resignation from the Senate altogether. Public opinion polling showed a majority of Americans shared their outrage. At first Lott ignored the hubbub, hoping it would all blow over. When it didn’t, he launched a campaign to save his job, centering on a series of public apologies.

Even though he was a gifted public speaker, Lott spoke in generalities. His lack of specific examples demonstrating his commitment to equal opportunity and his voting record on the issues – in other words, his actions – betrayed him.

SAYING “I’M SORRY” IS NOT ENOUGH

Over the past decade a formulaic approach to extracting an organization or oneself from a crisis has emerged called “The Public Act of Contrition.” It works like this: if you are caught doing something wrong, you face the media’s cameras and bright lights and issue an apology for your transgressions. If you are truly sorry for what you have done and can demonstrate the actions you are taking to correct the situation, you may receive the benefit of the doubt from your stakeholders.

However, like Senator Lott, if all you have to offer are flowery words, you will only dig yourself deeper into trouble. The case of Don Carty, the former chairman of AMR, the parent company of American Airlines, is a good example. In April 2003, with the airline teetering
on the verge of bankruptcy, Carty browbeat the pilots, flight attendants and mechanics to accept significant salary cuts. Within a few days it was revealed that he and five other top executives had approved bonuses that would triple their salaries for the year and had funded a special retirement plan that would shield executives’ benefits should the company enter into bankruptcy.

The outrage from the rank-and-file was immediate. Carty made several attempts at apologizing to employees, but the bombastic executive had earned little equity during his tenure at the airline’s controls and his acts of contrition were viewed as insincere.

In response, the unions representing the flight attendants and mechanics said they would ask their members to vote again on the contracts they previously ratified. The Airline Pilots Association refused to sign the contract its pilots approved. They entered into a bargaining session, with four Texas congressmen acting as mediators. After 12 hours, two unions agreed to amended contracts. However, the Association of Professional Flight Attendants held out, citing Carty’s continued presence as the reason.

The board of directors accepted the chairman’s resignation shortly thereafter.

CONFLICT FUELS COVERAGE

Like throwing gasoline on a fire, internal conflict in a crisis will only attract more media attention. In some instances, reporters have been known to fan the flames of conflict by baiting each side with statements the other made about the situation. Another source of conflict is the victims’ reaction to a decision (or lack thereof) by the organization that caused the crisis. The Ford/Firestone saga again provides some examples.

Conflict erupted the minute the two companies announced details of the recall. Because there were not enough Firestone tires available to replace the estimated six million Wilderness A/Ts covered under the action, the company had to be selective. Since tire engineers believed that heat contributed to the failure, customers who lived in the hottest climates would have their tires replaced first. Explorer owners who did not live in the priority areas were outraged at the implication that their safety was somehow less important. This issue quickly became a major story in media coverage of the recall, forcing the companies to include other tire brands for replacement in order to meet the needs of all owners.

No sooner had the conflict over geography and replacement tires subsided than both sides started a public mud-slinging contest over what was to blame for the deadly situation. Ford maintained it was a tire problem, insisting that Explorers with other tire brands did not experience the type of failures which prompted the recall. Firestone claimed that the failures were caused by a design flaw in the SUV, exacerbated by the carmaker recommending tire pressures lower than Firestone’s specification in an effort to achieve a smoother ride. When two industrial titans clash, their conflict makes headlines; this aspect of the story provided good copy for more than eight months.

As if that wasn’t enough, the personal conflict between Ford’s Jacques Nasser and Firestone’s John Lampe was grist for business columnists and television business show hosts for weeks. It was captured in a photograph of the two executives glaring at each other while shaking hands at a congressional probe into the crisis.

Statements in the media can fuel coverage, especially if other parties are blamed, accurately or not, for the company’s misfortunes. The high road should always be taken with public statements.

VIDEO CAN MAKE A STORY

If a picture is worth a thousand words, a videotape of outrageous behavior could be worth days or weeks of television. In May 2003, home videos emerged showing wealthy suburban girls at Glenbrook North High School in Northbrook, Ill., pouring a witch’s brew of fish entrails, pig intestines, feces and blood on underclassmen while assaulting them in a hazing ritual gone berserk. The images transformed what was a local Chicago story into international news, eventually reaching more than 40 countries around the world.

In the United States, segments of the videos featured prominently on news programs for more than a month. The media reported on the school’s initial response and investigation, the decision to suspend participants, the search for the parents who provided beer to the underage seniors and the state’s attorney bringing charges against students whose names were conveniently displayed on the back of their jerseys. The relentless broadcasting of the images and the revulsion they generated were factors in the school’s response to an event which they had ignored in previous years.

One of the student cinematographers admitted to a reporter that she shot the video with the intention of selling it to the media. The consensus among reporters was that without the videos, it wasn’t much of a story.

CONCLUSIONS

These case studies illustrate some important principles of crisis management:

Any organization, regardless of its size or purpose, can experience a crisis that has the potential to damage or destroy its reputation.

In today’s 24/7 media environment, news of that crisis can travel around the world almost instantaneously.

Effective crisis response requires action to protect people and correct the cause of the crisis. Effective communications is then necessary to explain those actions. These two components must be accomplished simultaneously, not sequentially. Stakeholders will form their opinions of the organization based on the response to the crisis.

Because a crisis is different from most other situations an organization is likely to encounter, a high degree of planning and preparation is required for a successful response. That includes a detailed crisis response plan, a crisis management team, training (especially for spokespeople) and practice exercises. The most dangerous attitude is to believe that preparations are not required. Once a crisis occurs, it will be too late.

Bob Roemer is an adjunct lecturer teaching crisis management in the Integrated Marketing Communications graduate program at Northwestern University’s Medill School of Journalism. He has 20 years of public relations and crisis response experience in the oil and chemical industry. This article is an excerpt from his new book, When the Balloon Goes Up: The Communicator’s Guide to Crisis Response, written for public relations and communication professionals.