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Crisis Leadership: Why Brands Should Own Up and Act Fast

Successful companies exhibit three key traits: they demonstrate empathy, responds immediately,  and they willingly take ownership of mistakes

In a world that is closely bound by the internet and assessed every moment by social media, information goes viral like wildfire. Brands, thus, can’t afford to be careless or bury their heads in the sand in the face of a crisis. While it is imperative for brands to have strong corporate governance and a crisis response plan in place that should be meaningful, actionable and systemic – and big companies do have one, there’s more to it when a crisis hits.

We seem to have a natural tendency to avoid planning for crises. Identifying risk can be anxiety-provoking and may require an internal restructuring of the organization. According to a recent Deloitte survey, only 49% of board members say their organizations have crisis scenario playbooks, and just 39% have a plan for addressing reputational risk. Likewise, a recent research report jointly published by Twitter and Sprinkler notes that companies with high-care scores exhibit three key traits:

  • They demonstrate Empathy
  • They Respond immediately
  • They Willingly Own their Mistakes

Brands lacking these aspects are seen as either irresponsible or outright incompetent.

Respond immediately: Typically, a crisis draws media attention like a laser. Some years ago, when two Domino’s Pizza employees filmed a prank in the restaurant’s kitchen (by putting cheese up their nose), and posted it online in a video, in a few hours, thanks to the power of social media, they ended up with felony charges, more than a million disgusted viewers, and a major company facing a public relations crisis. History has shown silence is not a smart option for an organization grappling with crisis. So companies need to act immediately and dial into the social media conversation.

According to an FTI Consulting study, companies received 35x the media coverage in the month after a crisis than the month before one. In the case of social media, crises will trigger an astounding 280x the number of company mentions than the prior month. As a rule of thumb, it’s a good idea to respond first on the platform where the information was reported first, and soon launch an omni-channel communications campaign aggressively.

Demonstrate Empathy: Messaging tonality can often exacerbate the situation. Airbnb’s ‘Kindness card’ campaign, a way to support hosts during the ongoing coronavirus crisis, for instance received a lot of flak.

According to USA TodayAirbnb recently sent out emails to guests asking them to write a digital comment card with an encouraging message to Airbnb hosts, with the option to add a donation. This lack of empathy angered guests during pandemic time.

A crisis also provides brands with the opportunity to show their customers that they care about every aspect of their experience. Whether it is delivering quality customer service or making corporate decisions that are in their best interests, using a human touch can go a long way.

Take ownership of mistakes: When people sense or experience a problem, or are injured in some way — lost their health, lost their money, lost their privacy or lost something else they valued – they want to hear the top bosses of the company owning up, accepting responsibility, and assuring that they’ll fix it. Any attempt to sidestep responsibility will add fuel to the media fire.

Take the example of Boeing that hit the headline last year after the tragic loss of 346 lives in the crashes of two of their 737 Max airplanes – one in Indonesia and one in Ethiopia. More than the crisis, what compounded their problem was the way in which the company responded during the crisis. The CEO Dennis Muilenburg (who resigned soon after) made matters worse by going on a defensive mode, not admitting the flaws in the software; instead blaming the pilots for not completely certain standard procedure.

A recent study discovered companies that apologized and accepted responsibility could cut post-crisis litigation costs in half.

Rebuilding the brand image

The most overlooked aspect of crisis communications is the recovery phase. As the crisis wanes and situation stabilizes, one may think that things have just got back to normal. But the challenge is, there is now a “new normal”. Brands should address the specific harm with a specific remedy. If the environment was damaged, fund a sustainability initiative, if privacy was compromised, you should rebuild your identity protection. Your investors need to see visible proof, over an extended time horizon, with measurable impact to believe that the company has learned its lesson.

To sum up, anything a customer captures records or comments on a brand and shares on public forum could potentially lead to a social crisis. It could just be anything – and brands not paying proper attention to this are already in crisis. The message should be that one of the worst ways to deal with a crisis is to pretend it doesn’t exist; or be silent or even take things at its own pace. But such brands are bound to suffer their fate.

Hence, CXOs must address an active crisis with courage, honesty and a sincere dedication for the welfare of their stakeholders – both external and internal. It’s the only way to salvage and sustain one’s reputation in this digital world.

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Sohini Bagchi
Sohini Bagchi is Editor at CXOToday, a published author and a storyteller. She can be reached at sohini.bagchi@trivone.com