In business, inherent risks are lurking around almost every corner. Changes in the financial markets, rising insurance costs, legal liabilities, employee disputes, etc. The list of potential risks can go on and on. In reality, you can try and influence events around you, but not much in the business world is in one’s complete control. But it’s also the threat of risks that make business so exciting.
Sometimes in business, things can go really wrong such as a product recall when the U.S. Consumer Protection Agency deems a product is dangerous to the public. Or there’s a chemical spill on the freeway when one of your tanker trucks was involved in an accident. Or an employee does not follow company protocol and their rude behavior gets splashed all over social media.
It is because of all the unexpected things that can go wrong that most Fortune 500 and other companies retain risk management consulting services firms. All professional firms include crisis communications planning. This way in the event of a crisis involving your company you can hit the ground running, and be ready to communicate with the press and the public. In today’s world of almost instantaneous communications, a company needs to be able to tweet out the right message directing the press and public to a concise and truthful statement with the company’s apology and their side of the story.
No Plan, Big Problems
Many companies have ignored having a crisis communications plan in place. A crisis occurs and they are slow to respond. Or the company sends out contradictory or conflicting information that made them look as if were hiding things about their responsibility in the incident. This, in turn, hurt the company’s reputation. And when a company’s reputation takes a hit, they can lose customers, stock price can drop, etc. For some companies it can take years to rebuild their reputation and they suffer financial losses in the intervening years.
Recently, United Airlines’ reputation and stock price took a hit after a video appeared on social media of a passenger being violently dragged off a plane. The public quickly jumped on the side of the passenger who had purchased a ticket, but because the airline had overbooked the flight the passenger was forced to give up his seat. When complaints against United Airlines spread across the internet, the airline stood its ground. As time passed, complaints increased against United Airlines and there were even calls for boycotts. It wasn’t until United’s stock price plummet, causing the company and its shareholders to lose millions, that the company did the right thing and made amends with the passenger.
United Airlines would have done well to have a crisis communications plan in place, leveraging risk management consulting services, to address the issue and avoid a costly PR blunder.