January 9 2023
Every year, hundreds of companies face major scandals and crises that require a significant amount of damage control. There is a lot that PR and marketing professionals can learn from these situations and the selected response. Here are some of the top five corporate crises from 2022 and key takeaways that every leader can use to improve their crisis response management process.
Economic downturns often result in companies making tough decisions, especially when it comes to their workforce. While laying off staff is to be expected during challenging times, delivery is critical. In December 2021, the CEO of Better.com, Vishal Garg received harsh backlash for his approach to laying off about 900 employees. The layoff meeting which took place over Zoom was poorly delivered and viewed as overly callous.
The real trouble started when Garg proceeded to host a follow-up call with the remaining employees. In an audio leaked to the public, the CEO can be heard explaining that the employees that were laid off were “stealing from customers” by slacking off.
The company itself didn’t issue a response. However, Vishal Garg did apologize in an internal email that he “failed to show the appropriate amount of respect” to employees and was “committed to learning from the situation”. This attempt was seen as superficial when Garg was later identified as the author of an anonymous post on a professional networking site that continued to slam Better.com’s employees.
Throughout 2022, the company continued to lay off employees on three separate occasions bringing the total number of layoffs to approximately 3,000.
Even if your company is performing routine activities, delivery is important, especially when people are involved. PR professionals can learn the valuable lesson of not exacerbating the issue by continuing to double down on negative messaging after trying to apologize.
Earlier this year, Slack, a business messaging app left a large number of its 18 million users unable to send and receive messages, upload files, unable to access the program. This caused significant disruption for businesses that rely heavily on the platform.
The company was extremely quick to respond to users letting them know that they were aware of the issue and working to restore access. Slack keeps a special calendar on its website that records and publishes outage updates. The company was proactive in making regular updates (approximately every 30 minutes) until the situation was resolved.
There were two key things that Slack executed perfectly during the crisis. First, they communicated early and often regarding the situation, so customers felt informed. Also, using their website to post updates served as a single source of information so there was no confusion or conflicting information regarding the current status.
In some cases, companies have to deal with crises that are caused by one of their employees or affiliates. In November, John Tyson, the CFO of Tyson Foods, was arrested in Fayetteville, AR, for public intoxication and trespassing. The arrest occurred when a woman came home and found a stranger (Tyson) asleep in her bed.
There were two main responses as a result of this scandal. First, John Tyson issued an apology to investors and committed to taking steps to ensure this never happens again. The company took the stance of not commenting on the arrest directly. Instead, they focused on reaffirming that they were confident in Tyson’s abilities to continue leading as CFO.
Tyson Foods simply accepted and moved forward rather than trying to make unnecessary excuses. Sometimes, that’s the best and most effective way to deal with a corporate crisis.
In November, Ticketmaster began selling tickets for Taylor Swift’s Eras Tour. The much-anticipated launch quickly ground to a halt as massive amounts of consumer traffic crashed the website and caused issues completing orders. This left Ticketmaster customers confused and angered with many missing the opportunity to purchase their tickets.
Unfortunately, Ticketmaster was extremely slow in communicating with customers. When they finally did respond on Twitter, they simply apologized with little information about how they intended to resolve the issue. The same statement was later published stripping out the apologetic language.
When a crisis happens, companies need to communicate proactively and let their customers know they are working to fix the problem. Lack of communication comes across as being insensitive and not caring about your customers’ experience.
In December, Kelly Conlon, an attorney from a New Jersey law firm, was chaperoning her daughter’s Girls Scout troop to see a holiday show at Radio City Music Hall (owned by MSG Entertainment). The controversy started when MSG Entertainment used facial recognition software to identify Conlon. She was promptly escorted from the building.
In a statement from MSG, they explained that they have a policy in place that bars lawyers who have open litigation against them from their venues. Since Conlon’s firm is currently pursuing a personal injury case against a separate restaurant venue (also owned by MSG), she was not permitted to see the show. MSG claims that the law firm and its partners were made aware on several occasions that they were not permitted to attend MSG venues.
While there is a philosophical debate around the use of facial recognition software and personal privacy, MSG’s response was effective. They simply stuck to the facts and pointed to a policy (rather than human behavior) that resulted in the situation. They also made it clear that Conlon had already been informed before visiting the venue.
Every crisis is unique and different. For this reason, understanding how other companies have addressed crises and PR challenges can improve your ability to respond when these situations arise in your organization. The top two things to consider? Always be prepared with a proactive crisis communication plan so you can act quickly, and always work with professionals who have the expertise and experience.
Do you have a proactive crisis communication plan ready for this year? If not, call one of the professionals at PRGN today to find out how easy it can be.