When disaster strikes and your company has taken a blow to its reputation, it’s hard to imagine you will ever get out from under the dark cloud that hangs over you even after the immediate crisis has passed.
Having worked with a number of companies who have undergone crises from the crippling to the more typical, I see a few common behaviors that separate those who move on quickly from those who have the crisis aftereffects linger for months or even years.
Restoring your company’s good name is not impossible. In fact, if you do a few things right, you’d be surprised at how quickly you can rehab your reputation and rebuild the perception of your company.
Own up to the problem
Accept responsibility for your actions and apologize for any shortcomings on the part of the company. This usually requires some give and take with the attorneys and other internal stakeholders, but increasingly, legal counsel and senior management realize it is far better to offer a genuine apology at the outset than to make a halfhearted one, be criticized, then be forced to reissue another statement later.
United learned this lesson the hard way after the incident where a passenger was dragged from its plane. CEO Oscar Munoz’s initial remarks about “having to re-accommodate…customers” was so far removed from the incident, which left its passenger with a concussion and broken nose, that it sparked public outcry. Inevitably, Munoz issued a more contrite apology a few days later, but the damage was already done.
Rally your troops
Your stock price may have dipped. Morale has taken a hit. Right now, your most valuable asset is your employees. They are the front line to your customers, investors, partners, regulators, and other stakeholders. But if they are demoralized, confused about the company’s actions, and if they don’t believe in your handling of the issue, how will you recover? Ensure that employees understand what happened, why it happened, what the company is doing to remedy the situation and how they can help.
Window dressing and making changes for show will not work to dispel the mistrust you created in the first place. Make real changes. When you do, ensure your employees are on board with the company’s position and using the same messaging to explain what is being done.
That’s what Chipotle did in response to a crisis that involved 500 cases of food poisoning related to six different outbreaks. Chipotle closed all its locations (more than 2,000) during lunch to hold a company-wide employee meeting. CEO Steve Ells addressed his employees via videoconference to let them know exactly what Chipotle was doing to improve food safety, and how it planned to repair consumers’ broken trust. The virtual meeting helped unite employees and assure them that their leader was invested in fixing the issue.
Learn your lesson
Don’t let the crisis blow over without taking a hard look at failures in controls, process, leadership or systems. Use the crisis as an opportunity to make your organization a stronger and better one.
Over two decades after weathering an acute crisis involving E. coli contamination in its products that sickened dozens of customers and resulted in the death of a child, Odwalla is still held up as an example of how to successfully manage a crisis. The year the crisis hit, Odwalla’s sales were down 90 percent and its stock was down 34 percent. One year later, after revamping its juice processing operations, working with victims and conducting a transparent communications campaign, the company was awarded the San Francisco Business Times’ Company of the Year award and had retained 80 percent of its customers. The company still exists today, proving you can repair your reputation through hard work and a commitment to doing the right thing.