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April 29, 2016

Don't Let a Crisis Become a Catastrophe

Keith Jackson

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The saying "hope for the best, prepare for the worst" has always struck me as supremely sensible advice.

Having said that, it's not advice that I've often applied to my own life and career. I tend toward being mostly optimistic about things, and I usually deal with the immediacy of life rather than scan the horizon or think about contingency plans. I'm with poet and novelist Rudyard Kipling, in that I "meet with Triumph and Disaster, and treat those two imposters just the same."

In business, however, with livelihoods at stake and reputations at risk, having a crisis management plan ought to be high up on a leader or manager's list of priorities. But, as we show in our article, Planning for a Crisis, almost a third of companies who responded to a survey waited until disaster struck before they drew one up.

One of the most important issues to tackle in a crisis is communication, both within your organization and with the outside world. PR and crisis planning experts generally agree that letting people know what is going on swiftly and honestly is a wise move. In the 19th century. American author Mark Twain said, "A lie can travel halfway around the world while the truth is putting on its shoes." In the 21st century, misinformation can circle the globe in seconds, thanks to the internet and social media.

Having a robust crisis management plan, backed up by an effective communication strategy, can be the difference between recovering from adversity with your reputation intact, or collapsing with your reputation in tatters.

The corporate landscape is full of examples of good and bad responses to crises. Here are a few case studies of both:

As we mention in our article, one of the most famous cases of a good response was pharmaceutical giant Johnson & Johnson’s reaction to the Tylenol tragedy of 1982. Seven people died within days of one another in the U.S., after a batch of Tylenol pain killing tablets was maliciously laced with cyanide. Johnson & Johnson immediately issued public warnings, recalled 31 million bottles of the tablets, and introduced tamper-proof packaging. Its swift and decisive action was credited with saving more lives, and the company’s reputation survived what could have been a catastrophic blow.

In 2014, the National Basketball Association (NBA), the governing body of the sport in the U.S., was engulfed in a race storm after incendiary comments by Donald Sterling, then owner of the LA Clippers. NBA commissioner Adam Silver was widely praised for his handling of the scandal. He banned Sterling for life from basketball, fined him $2.5 million, and ultimately forced him to sell the club that he had owned for 33 years. Silver’s public condemnation of the comments and his defense of NBA values were also well received.

In 2010, a seemingly "throwaway" line by BP CEO Tony Hayward sparked public fury during the Deepwater Horizon oil spill in the Gulf of Mexico. Eleven people died in an offshore explosion that led to a huge ecological disaster as more than 200 million gallons of oil leaked into the sea. At first, Hayward unwisely played down the size of the leak as BP suffered intense criticism. But he became the real "villain of the piece" when, despite the deaths of the 11 workers, he told reporters, "I'd like my life back." His insensitivity even drew scorn from U.S. President Barack Obama. The disaster is estimated to have cost BP almost $54 billion.

How prepared are you or your organization for a crisis? How effectively have you or your organization responded to a crisis? Tell us your experiences, in the comments section below.

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