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Communication in Crisis / The communication of business disasters

The communication of business disasters

Like in politics, in business we can also see successful and unsuccessful examples of crisis management. An example for the latter is one of the mega projects in the UK, the new British Airways terminal of the London airports (Heathrow) to be completed by spring 2008. During the promotion of the project, the airline promised that queues will essentially disappear. Despite this promise, after the transfer, the baggage handling system broke down. Tens of thousands of suitcases and bags were simply lost. Snaking queues developed in front of the desks, check-in became impossible. Tens of thousands were trying to find their luggage, numerous flights were canceled in the confusion. The well-prepared communications campaign backfired: the transfer became a failure instead of a glory. In addition, British Airways communicated poorly as well: the head of the company disappeared for days. The various managers gave contradicting statements to the press, at other times avoided meeting journalists instead of giving factual information. Unlike the passengers who were prepared to express their anger at British Airways through the microphone. The crisis and its poor communication did not only destroy the image of the company, but also caused a loss of about Ł15 Million.

A few months later, the multinational corporation IBM suffered a similar disgrace. At the beginning of 2009 the company wanted to hide that they were preparing for mass layoffs. When the plan finally became known, the corporation avoided giving relevant information and avoided the media as well. The communications team accumulated multiple mistakes. The press officer did not tell openly how many people and from where they would let go. The communications manager repeatedly mentioned the impersonal wording ‘human resource action’ and turned away the enquiries by referring to the commercial interests of the company. This approach made the IBM appear like a soulless, inhumane multinational corporation to the public. Since the company did not provide either counterarguments or information, press articles depicted the IBM as an employer which did not care about the fate of their employees.

However, there are also positive examples. In mid-2008 the Seattle-based coffee corporation Starbucks announced that they were forced to discard about 12,000 of their employees. Unlike at the the IBM, the manager of Starbucks appeared in front of the employees and informed them in detail about the background of the decision and the planned course of the painful process. The company thanked for the employees’ work in a press release and informed them that they made every effort to ensure job opportunities close to the place of their residence. As a result of the emphatic tone, the way the painful character of the decision was emphasised, the correct divorce process as well as non-coercive aftercare and follow-up, Starbucks appeared as a humane and fair company in the public eye, where IBM failed in a similar situation.

Photo gallery of Starbucks

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Starbucks's downsizing
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Johnson & Johnson was able to solve an even more difficult situation when in 1982 their market-leading analgesic and antipyretic drug Tylenol turned out to be contaminated with cyanide by an unknown perpetrator. Seven consumers of the product died during the period known as ‘Tylenol scare’ in American history. Brushing aside the material damage, the drastic solution of the company demonstrated that there was nothing more important than the safety and the lives and health of the consumers: a total recall was started. This was one of the first of such actions in the United States. In a few weeks 31 million boxes of medicines were collected and transported from tens of thousands of shops and pharmacies. Simultaneously, new three-fold sealed drug boxes were introduced which made the subsequent contamination of the now, for safety reasons, gelatin-based Tylenol impossible. All of this was conducted by the company in 10 weeks. Although the losses of the company (due to the recall and the compensations) were close to 100 million dollars, with the fast action and the honest communication unwilling to conceal the real story, Johnson & Johnson did not come off badly all in all: the new Tylenol successfully maintained its market positions for decades. Despite the fact that the company offered a hundred thousand dollar reward to find the perpetrator, the identity of the killer has never come to light.

Photo gallery about the Tylenol poisonings

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Johnson & Johnson, Tylenol recall
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Several conclusions can be drawn from the examples above. There is no need for a prophet for a company to handle an unexpected and difficult situation well. However, those companies have performed well in case of a crisis which had previously developed a crisis management scenario that could be activated immediately to start the salvage process. Everyone knew their roles, everyone knew what decisions should be taken by whom and who needed to be notified. With the help of the crisis communication plans pulled out from the drawer, as well as the assistance of professional communications specialists, they knew what mistakes should be avoided and when and what to say to the press. The company did not begin masking and telling lies, but took responsibility, bearing the losses if it was to be done. The statement policy was clear, and it was kept to. The company leaders were not hiding anything, did not avoid the media, so they were able to communicate their own their messages to the public. And finally, they did what they said and vice versa. Thatis, since the actions and words harmonized, they managed to preserve credibility. And this is essential as both successful communication and crisis management are impossible without this.

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