CRISIS MANAGEMENT: When it all goes wrong

Robert Gray takes three high-profile corporate crises recently in the news and analyses exactly what happened.

Barely a week goes by without a corporate crisis hitting the headlines. Disaster, like last month's Virgin Trains crash in Grayrigg, Cumbria illustrates, can strike in an instant. And as last year's Cadbury's salmonella scare proved, if crisis communication is not handled immaculately, brand reputation and corporate trust can be damaged longer-term.

We look at three high-profile crises of recent months, exploring how the organisations caught in the media maelstrom responded. We have canvassed the views of journalists covering each story and solicited the objective judgments of third-party crisis PR experts, as well as getting input from those at the heart of the crises.

Although most major organisations have crisis management procedures in place, research from crisis comms specialist Regester Larkin has found that strong crisis leadership, rather than process, is the key differentiator in dealing with the situation effectively

Jeremy Kent, director of PR agency The Brand Counsel, says that the handling of the Bernard Matthews bird flu scare, which we explore in greater detail in this piece, was in stark contrast to the response to the Virgin Trains crash.

‘Communication with the media from all parties at the crash site was swift, efficient and accurate, with Virgin chairman Richard Branson, and John Armitt, CEO Network Rail, both briefed and available for interview at the crash site,' says Kent. ‘As the inv­estigation continued, Armitt was the central spokesperson for Network Rail and gave an honest, full and up-to-date disclosure at every point.'

Here we look at how three very different crises were handled.

BIG BROTHER RACISM FURORE

Nature of the crisis Apparently racist comments on Endemol's Channel 4 show Celebrity Big Brother sparked record viewer complaints and led Carphone Warehouse to pull its sponsorship.

How it was reported ‘C4 accused of race whitewash' ran one headline in The Sun, while other newspapers dubbed the show shameful and lambasted the ‘weasel words' of defence from the broadcaster's management.

Crisis management strategy Amid a barrage of viewer complaints, media criticism and a minor diplomatic incident, the number one objective for Channel 4 was to keep CBB on air and maintain live production. ‘Our strategy is always to defend our right to broadcast contentious material,' says Channel 4 head of press and publicity Matt Baker.

‘Channel 4's remit is to take risks and be innovative for audiences.'

Initially Channel 4 took the view that the bullying and racist comments directed at the show's eventual winner Shilpa Shetty, though unpalatable, were the basis for an important debate - not to mention a ratings winner.

Five days after the comments were made, Channel 4 chairman Luke Johnson appeared on Radio 4's flagship Today programme. Although pressed four times to discuss CBB, he declined. Later that day Carphone Warehouse withdrew its sponsorship and Channel 4 chief executive Andy Duncan was forced into giving a press conference at the Oxford Media Convention in which he maintai­ned that it was unquestionably a good thing that the show had raised the issue of racism.

He added that it was unclear whether the comments directed at Shetty were racially motivated or whether they stemmed from broader cultural and social differences. The Mirror responded by dubbing the show ‘Celebrity Bigot Brother', calling Duncan a ‘doughnut' and slamming his ‘weasel words'.

Baker admits, with the benefit of hindsight, that it would have been better if C4 had had an outside perspective. ‘You get close to these things and you get the feeling that you've been there before,' he says. The recent appointment of PR agency Maitland to a corporate brief indicates that Channel 4 has moved to address this issue.


Journalist's View ‘The mistake that Channel 4 made was to consistently underestimate the strength of feeling around the story,' says The Times media editor Dan Sabbagh. ‘Although they escalated their response, each time they were short of the mark. Johnson's appearance on the Today show was disastrous as he really didn't seem prepared. There weren't enough senior comms people at Channel 4 to handle it.'

Third party crisis expert's view ‘Channel 4 and Endemol could have killed the story early on by editing out those comments, but they took a commercial decision not to,' argues Brahm PR mana­ging partner Phil Reed. ‘C4 misjudged the reaction. It only became a crisis for C4 when Tessa Jowell threatened a funding review and Carphone Warehouse withdrew sponsorship. Putting ratings ahead of reputation, C4 ignored a basic principle of crisis management.'

Timeline...

13-14 January Shilpa Shetty the subject on air of allegedly racist comments by CBB housemates Jade Goody, Danielle Lloyd and Jo O'Meara.

15 January Viewer complaints begin to flood in.

16 January The furore spreads to parliament as Labour MP Keith Vaz tables an early day motion condemning the Bollywood star's treatment.

17 January The racism contro­versy sparks international protests that impinge on Gordon Brown's visit to India. The Chancellor reassures his hosts that Britain ‘prides itself on tolerance and fairness'.

18 January Carphone Ware­house pulls out of its £3m sponsorship of the series, CEO Charles Dunstone citing racism and bullying as being at odds with its brand values.

26 January In an interview with Broadcast magazine, Channel 4 director or television Kevin Lygo said that while the racism row had not been manufactured it had saved the series from being the most boring Big Brother ever.

28 January Shetty wins, polling 67 per cent of the final vote.

BERNARD MATTHEWS BIRD FLU OUTBREAK


Nature of the crisis Outbreak of the H5N1 strain of the bird flu virus on a Bernard Matthews turkey farm in Suffolk leads to a mass poultry cull.

How it was reported TV images of qua­rantined farm and slaughtered turkeys heading for mass incineration were a body blow to the brand. Questions were raised about the quality of BM's bio security and its honesty about the transfer of poultry meat.

Crisis Management Strategy
Hill & Knowlton handled the crisis, communicating with consumers, political stakeholders, retailers, staff, industry bodies and the media throughout a turbulent period.

It was deemed very important to get the message to retailers that BM products were perfectly safe to eat and this was a key focus. Retailers were given daily updates about BM's products and procedures, which also relayed the FSA messaging that properly cooked poultry was safe. This information was supported by detailed Q&As. As a result, no BM products were removed from shelves.

Two weeks later, a piece ostensibly penned by company founder Bernard Matthews appeared as an exclusive in the Daily Mirror.

Matthews claimed that the reason he had not appeared all over TV screens was not because he disliked journalists or was ‘shying away from the seriousness of the issue' but because he was advanced in years and had handed day-to-day running of the business to a strong management team.

 


Bearing the Brunt: Matthews survived

Journalist's View ‘Bernard Matthews wasn't fantastic in that first week,' says one prominent national news­paper journalist. ‘It was fundamentally obstructive and highly misleading. At one point we had to wait 48 hours to get an answer - and when it came it bore no relation to the question we'd asked. All of the journalists [following the story] I spoke to were angry. They felt misled. It engendered negative feeling towards Bernard Matthews.'

Third Party Crisis Expert's View ‘From a communications perspective major food crises such as this require a substantial response on a timely basis. Formal briefings to all stakeholders at least twice daily - to media, retailers, government and trade associations - and directly via their website to consu­mers,' says Kissmann Langford managing director Martin Langford.

‘Also very regular staff briefings to already beleaguered employees are critical. Over-communication rather than under-communication should be the rule of thumb for this type of crisis. One aspect that is so often missed in food crises is how to relaunch products post crisis.

One of the steps I would have advised is to brief one of the company's top marketing people to draw up a post crisis relaunch plan.'

Timeline...

1 February BM poultry farm placed under DEFRA restrictions as suspected bird flu outbreak is investigated.

2 February DEFRA announces more than 1,000 turkeys at farm have died.

4 February Slaughter begins.

10 February BM accused by MPs of telling ‘untruths' after conceding it may have imported infected Turkey meat from Hungary, after initially denying any trade between the plants.

15 February Bernard Mat­thews breaks his silence in a Daily Mirror exclusive.

19 February BM announces 130 redundancies following a 40 per cent plunge in sales.

ALEXANDER LITVINENKO POISONING


Nature of the crisis Former spy Alexander Litvinenko, and subsequently his associate Mario Scaramella, admitted to University College Hospital (UCH) with radiation poisoning.

How it was reported
Worldwide media attention on a story that mixed political intrigue and espionage with serious implications for public health.

Crisis Management Strategy While doctors, nurses and consultants worked tirelessly to try to save Alexander Litvinenko’s life and scientists tried frantically to identify what exactly had poisoned him, the world’s media gathered outside UCH’s doors in Euston Road, hungry for answers.

The morning after his admission, the hospital PR team was getting a call a minute from the media. For the rest of the week the pace was relentless.


Litvinenko saga: surprised hospital

The team was constantly reacting to events out of its control – comments from Litvinenko’s friends who continually briefed the media on his medical condition and other medical professionals who were speculating on his symptoms and what might have caused them. There were times when the team had to proactively regain control of the message because a lot of the speculation was wild and inaccurate.

 

 

University College London Hospitals NHS Foundation Trust media relations manager Ian Lloyd frequently took the time to speak to media crews gathered outside the hospital, giving them a steer on when an update would be released.

Journalist’s View ‘I think at first the hospital was surprised at the level of interest in the story,’ says Sky News home affairs correspondent Mark White. ‘But overall the hospital did well, issuing statements and fielding consul­tants. Normally hospitals don’t want to expose a patient to the media. But UCH realised Litvinenko had a story he wanted to tell.’

Third Party Crisis Expert’s View ‘From the outside I would say UCH followed textbook practice in the form of a refusal to speculate, primary expressions of concern focused quite rightly on the patient and his family, regular information updates and joint working with the Health Protection Agency and police on the release of information,’ says Kinross + Render CEO Sara Render. ‘UCH also appear to have managed to provide rapid reassurances on the low risks of contamination.’

Timeline...

17 November Alexander Litvinenko admitted to hospital.

19 November
Hospital issues condition check statement.

20 November First statement given in front of the cameras by clinical head for haematology Stephen Rowley.

21 November The now iconic picture of the sick Litvinenko in his hospital bed is taken and distributed through Bell Pottinger, which is working for certain Litvinenko supporters.

22 November Story breaks that three unidentified objects are seen on x-rays of the ex-spy’s body. Hospital issues statement that this is mis­leading and the shadowing on the x-ray was caused, as might be expected, by Prussian Blue, a non-toxic substance used in treatment.

23 November Litvinenko dies.

1 December Litvinenko associate Mario Scaramella admitted to hospital.

4 December Scaramella gives unapproved interview to CNN.

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