Organizations generally better understand that delayed or callous responses can worsen PR crises while effective communications plans can mitigate negative news. Still, we continue to see examples of companies exacerbating crises through ham-handed reactions.
These are the worst-handled PR crisis of 2016, according to crisis management experts.
Wells Fargo Fake Accounts
“Without a doubt, Wells Fargo’s handling of its fake-accounts crisis takes the prize as the worst of the year — just botched from beginning to end,” said Jim Haggerty, founder and CEO of CrisisResponsePro.
After Wells Fargo admitted that employees had created about 2 million fake customer accounts to reach sales goals, the bank couldn’t have handled the crisis any worse than it did. It didn’t at first take the problem seriously enough, it couldn’t get its story straight, and its response was perceived as dishonest. Plus, no heads rolled until CEO John Stumpf finally resigned.
Samsung’s Brand goes up in Smoke
Although Samsung recalled the exploding Galaxy Note7 phone from the market, its subpar communications effort was roundly criticized.
After reports that the smartphones were catching fire, Samsung suspended sales and announced a voluntary recall to replace batteries, the ostensible culprit. When incidents of combustion continued with the replacement devices, Samsung finally recalled all Galaxy Note 7s worldwide and permanently discontinued production. Several countries banned the phone outright, and the FAA barred the device from being taken aboard U.S. aircraft.
“Samsung has thus far still been unclear communicating with the public whether the now-discontinued devices were safe to use or not, and as a result failed to manage its messaging and stay ahead of the crisis until it was too late,” explains Jon Gingerich, editor of O’Dwyer’s monthly magazine.
Tesla’s PR Crash
After Tesla driver Joshua Brown died while allegedly using the car’s much-heralded autopilot technology, Tesla Motors CEO Elon Musk posted a eulogy that seemed more like a rant. Musk seemed to be more concerned with defending the company than memorializing the deceased driver.
Musk’s public reaction had the unintended consequence of trivializing the driver’s death and “making the incident all about his company, as if that’s any way to save a brand’s reputation,” Gingerich wrote.
Theranos Creates Bad Blood
When the Wall Street Journal questioned the one drop of blood testing technology of Theranos in October 2015, the company responded with belligerent counter-attacks. It maintained its defiant tone this year even as the accuracy of the Journal’s coverage became clear. Regulators banned its founder, Elizabeth Holmes, from owning or operating a lab for two years, revoked its lab certification, and blocked it from accepting Medicare or Medicaid payments. Former partner Walgreens is now suing it.
“The fall of Theranos was particularly dramatic because it was in many ways a victim of its own hype,” writes Dorothy Crenshaw of Crenshaw Communications. “The story of a new blood-testing technology for clinical tests that needed only a single drop of blood was irresistible to media, and founder Elizabeth Holmes was a PR dream. But as it turned out, many things about the secretive startup were just too good to be true.”
Effective PR Crisis Response Methods
Seasoned PR crisis response managers recommend the following key strategies to tamp down an issue, protect corporate reputation and gain public support:
- Provide an assertive and prompt response. Firmly state that the improper behavior in question is unacceptable and will not be tolerated.
- Give a clear apology. Provide a definitive and sincere apology without excuses and without attempting to downplay mistakes or improprieties. In the case of Wells Fargo, CEO Stumpf didn’t say he was “deeply sorry” until grilled weeks later by the Senate Banking Committee. Even then, he seemed to say it was all the fault of the 5,100 low-level employees who were fired. He never acknowledged the role of corporate policy and executive decision-making as the ultimate culprit.
- Bring in outsiders. Hire an independent consultant to scrutinize employee actions and company policies and procedures to pinpoint what went wrong. That action can prevent similar debacles from happening again and help restore trust in the institutions.
- Consider new blood. In severe PR crises, replacing the executive in charge of the offending division or service may be the only solution to appease legislators, regulators, and public opinion. Hiring from outside the company can bring new perspective and help restore confidence.
Bottom Line: 2016 was littered with PR disasters worsened by flat-footed, sluggish and insensitive responses. These are some of the most high-profile PR crises exacerbated by poor communications management.
What do you believe were other inappropriate PR crisis management responses? Please comment below.