In today’s digital age, crisis management rules have changed. Organisations now have to account for the dizzying volume of online conversations in which the public engages at the onset of each crisis. Digital pros or not, there are organisations that have successfully turned crises which have broken online (like most do) into opportunities to crystallize their clientele and maintain trust.
KFC’s humour strategy
In February 2018, a distribution problem meant that KFC simply didn’t have enough chicken. Conscious of the potential financial and reputational damage of the situation, KFC informed customers immediately by feeding them (pardon the pun!) with the facts in real-time and keeping them updated and engaged online and in the media.
Not only did KFC recognise a mistake had been made as soon as facts were available, therefore owning responsibility, they did a great job of reassuring customers and resolving the issue. They took the ‘recognise-regret-resolve’ crisis communications approach, which really shows empathy, puts the people directly affected by the inconvenience at the heart of the response and strikes the right balance between reassurance and responsibility. That sense of care is what keeps reputation intact and often contributes to an increase in stock price.
What makes this case especially memorable was the way in which KFC flipped the situation around by connecting with their customers through a great sense of humour in their social media messaging, which earned universal recognition among brand watchers and advertisers.(Holmes).
H&M’s racial insensitivity faux pas
From chicken to clothing. H&M’s racially insensitive faux-pas is another example of a crisis that took a positive turn as it resulted in a social media movement and triggered change in sentiment towards the brand online.
In 2018, H&M attracted the rage of a flood of netizens, including several celebrities who had previously endorsed them, after releasing an ad featuring a black child modelling a sweatshirt reading “coolest monkey in the jungle.” Within two days, the retailer had pulled the sweatshirt and ad, issuing an apology and reassuring the public that appropriate action would be taken.
After receiving support from the model’s mother, who called on people on social media to “get over it” and added that the sweatshirt was “one of hundreds of outfits my son has modeled … stop crying wolf all the time” there was a change in sentiment. The incident prompted creative replicas of the model with empowering messages and designs (like a crown). The retailer appointed Annie Wu as the head of the global diversity and inclusion team at its Stockholm headquarters. Such a politically-charged crisis could have taken a considerable toll on H&M’s stocks, had the retailer not pulled the ad, apologised and taken appropriate action.
Starbucks’s racial bias scandal
H&M’s case study echoes Starbucks’ racial bias scandal. The crisis, which sparked international outrage, was given a spin after the company took responsibility and action by organising racial bias training, prompting the closure of 8,000 coffee shops across the US for a day. The crisis unfolded when two black gentlemen were summoned to leave a Starbucks coffee shop in Philadelphia because they had not yet bought anything as they were waiting for a friend and ended up getting arrested after the manager called the police. As the news went viral, it prompted protests online and offline. With authenticity and calm, Howard Schultz, then Chairman of Starbucks was quick to respond and issued a sincere apology: “I’m embarrassed, ashamed. I think what occurred was reprehensible at every single level. I take it very personally, as everyone in our company does, and we’re committed to making it right.”
Starbucks acknowledged the problem, owned what happened, issued sincere apologies, shared a solution (racial bias training for employees), displayed strong commitment for long-term change and reassured the public that the organisational action was taken.
All three case studies offer the same underlying lesson. In times of crisis, transparency is essential. Feeding audiences with truth and facts as a crisis unfolds reassures consumers and shows them how much organisations care. As we embark on this new year, these are thoughts to keep in mind and start afresh:
- The secret to managing a crisis well is preparation. The more prepared companies are – with carefully designed processes in place – the less negative long-term impact the crisis will have.
- Authenticity and open dialogue with the public during a crisis are key, as “it takes 20 years to build a reputation, it takes 5 minutes to lose it” (Warren Buffet). Investing in both allows organisations to nurture trust and relationships with the public.
- C-suite executives’ appearance and public speaking efforts are crucial to the turnaround of a crisis. According to the 2019 Edelman Trust Barometer, 76% of people believe that CEOs have a huge role in implementing and driving social change, therefore their take on a crisis can define the public’s trust in their organisation. Disproportionately emotional or detached responses never lead to good crisis outcomes. The Former CEO of BP’s famous line “I’d like to have my life back”, uttered amid the Deepwater Horizon oil spill disaster is a perfect example of that. “Being the head of the company means understanding that employees and the public look to you in times of tragedy” says Sir Richard Branson.
- Successful crisis management is not so much about pace, it is about the effectiveness and purpose of the message. Informing the public quickly is a requirement of crisis management, but it is not the only requirement: purpose is equally important. Vague and dry messages tend to receive backlash from the public and overly-rehearsed and inauthentic statements often make things worse. Research shows that ineffective crisis responses decrease stock prices by an average of 14% in the year following the crisis, compared to a 9% increase for effective ones.
In all, when the worst happens, look for the opportunity instead of focussing on the problem. When the storm has passed, as storms inevitably do, you may find that you have strengthened your organisation’s position as a robust thought leader.