Five Worst Crisis Management Blunders of 2011

January 02, 2012

2011 was a quite a year for crisis management with PR disasters hitting government leaders and businesses with amazing regularity. Which were the worst storms?

By Eric Rabe, Fels Senior Advisor

When bad things happen to people, businesses or government officials, it is critical to get the facts, act quickly and be candid and honest. That’s almost impossible if an organization is unprepared, so PR pros spend much of their time thinking about worst cases, judging the most hostile public reactions possible and deciding what they’d do if the worst happens.

But not always. And in 2011 we had some world-class examples of business, government leaders and others simply getting it all wrong. Here then the Top Five Crisis Management Blunders of 2011.

Penn State Sandusky Sex Scandal. It’s hard to overstate how badly this one was handled by Penn State. The crisis had smoldered for months before it burst into flames in October. Months before that, social media and even the daily newspaper in Pennsylvania’s capital had reported on a grand jury’s investigation of the allegations of sexual abuse by the former Penn State defensive football coach Jerry Sandusky. Yet when the grand jury released twenty pages of horrific allegations against Sandusky, the University was caught totally flat-footed. It reacted first not at all and then badly.

Crisis experts agree that an institution has about one hour to hold a news conference or at least make a public statement before the Internet ecosphere takes over. Penn State took almost five days before taking action. With the president, the football coach and others all called before the grand jury months before its presentment was released, how could the administration been so unprepared?

Herman Cain Presidential Flame Out. Herman Cain was riding high as Republican presidential contender when the first allegations of his extramarital sexual exploits appeared. Cain’s response was to deny that anything significant had happened, and aggressively take to the TV talk shows with his story. Only problem is that he was kidding -- certainly kidding the public and perhaps kidding himself.

Anyone who aspires to public visibility of the kind that a Presidential candidate receives must have a serious heart to heart with himself. What do I know about my own life that, if public, would be ugly? Girlfriends? Unpaid taxes? Nannies paid under the table? There is a whole club of politicians who have gone down on just these three issues, so clear out the skeletons before you run for office. Have an honest talk with yourself, and with your spouse. Be prepared for the worst to become common knowledge and have a plausible explanation ready.

Netflix Crash. Netflix began life as a DVD-by-mail house but wants to move its millions of customers to the free (for Netflix) on-line streaming movie delivery service. It’s late summer decision to break its service in two -- one for discs and one for online movies -- and charge what amounted to twice as much for its service didn’t fly. Customers did the social media equivalent of demonstrating in Tahrir Square,and Netflix backed down.

Surely honest market research could have predicted that the new pricing plan wouldn’t fly, irrespective of how attractive it seemed from the business’s point of view. But too often business leaders justify what seems like a good idea for the company without considering that in today’s world customers have plenty of ways to protest policies they don’t like -- and are only too happy to use them.

Anthony Weiner/Brett Farve. Ah, com’on you guys. How could you expect not to get caught doing something stupid when you have your kind of public profiles - or we might now say pubic profiles. One politician and one football star are now on the sidelines after using social media to send obscene photos of themselves to women.

No amount of crisis management can head off the problems something like this will cause. If you don’t want to read about it online, just don’t do it.

BoA $5 Fee. Bank of America didn’t count on Molly Katchpole. The Washington, DC, woman started a social media revolt when the bank decided to charge customers $5 for using their debit cards to purchase products and services. This is the same problem that Netflix faced. Again, where was the market research that should have told management that the idea -- justified though it might have been in some business plan -- just wasn’t going to work for customers? Too often executives listen to themselves instead of carefully listening to customers and taking an honest look at the world they are working in.

So that’s the list. The sad thing is that each of these was an entirely avoidable crisis. Yet each ended up causing embarrassment, lost revenues and worse. So...expect the worst, react fast if bad things happen, and, most of all, avoid trouble in the first place by honestly thinking through the consequences before taking action.

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