Lessons Brands Could Learn from Boeing CEO’s Exit
When the melancholy Jacques began his monologue in Shakespeare’s pastoral comedy As You Like It with the words, “All the world is a stage”, little did he know the prophetic nature that these words would have four centuries later. A world connected by internet, judged by social media and where information spreads many times faster than wildfire and where cameras capture everything from a world leader’s frown to a celebrity’s wardrobe malfunction at speeds faster than the naked eye can see.
The latest brand ‘captured on camera’ for the wrong reason is Boeing and the spotlight is on its CEO Dennis Muilenburg, who was ousted on Monday after the tragic loss of 346 lives in the crashes of two of their 737 Max airplanes – one in Indonesia and one in Ethiopia. His exit comes as no surprise to most in the industry, as many said the CEO’s resignation was long overdue and the company should have acted soon after the crisis. But the ‘reputational damage’ it has caused to one of the world’s leading brands speaks volumes on how brands respond to customers and other stakeholders during a crisis when they are in a trust business.
Throughout the crisis period and thereafter, Boeing adopted a glacial pace on owning its mistakes and its CEO made matters worse by going on a defensive mode, not admitting the flaws in the software; instead blaming the pilots for not completely following their standard procedure. The way they handled the entire communication only compounded their problems. As the New York Times reports, Muilenburg only released a public statement a week after the crash in Ethiopia.
Muilenburg also tried to minimize their role in the tragedies. He said, “Most accidents are caused by a chain of events. This, again, is the case here.” Shortly after, people discovered that Boeing had known about the issues since 2017. The New York Times reported that American Airlines pilots had confronted Boeing after the first crash. Leaked audio revealed that they were angry that Boeing had failed to disclose the existence of the software.
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Leadership Lessons from Boeing’s 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. In reality, we 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.
For brands the two most significant factors that make loyal customers are integrity and trust. When customers trust you and believe you are looking out for their best interests, they will be loyal. The moment they trust questioning your integrity, it’s unlikely that you’ll get their hard-earned loyalty back. Boeing’s response offers some simple lessons about customer loyalty and how companies should fix a problem before it becomes a social crisis.
Respond immediately: Typically, a crisis draws media attention like a laser. 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. The easiest way to establish rapport is to talk casually, avoiding corporate jargons while making eye contact (for video) and displaying some emotion. 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.
Accept Responsibility: 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. A recent study discovered companies that apologized and accepted responsibility could cut post-crisis litigation costs in half.
Engage employees: Remember the time and energy your company has put into employee engagement programs? When a crisis strikes, you need to engage employees to spread the word. Whether it’s on their personal social media accounts or a networking dinner, having your folks around to serve as company ambassadors can make a difference.
Rebuild 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.
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To sum up, we can say, in the age of internet and social media, 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 – something like Boeing did by not actively communicating the existing gaps in its internal processes, and thereafter suffering its fate.
But let’s hope that the New Year finds more C-suite and boardrooms addressing an active crisis with courage, honesty and a sincere dedication for the welfare of their stakeholders – both external and internal.