3 Crisis Management Case Studies We Can Learn From
Of the more than 27 million U.S. businesses in operation, an incredible 99 percent are small businesses with fewer than 500 employees. These smaller firms are arguably the most vulnerable to emergencies. In fact, nearly 40 percent of small businesses close following a disaster. This is proof that small businesses need to be effectively prepared for any crises that may hit.
While emergencies affect smaller organizations differently from their larger counterparts, there is always plenty to be learned from crises that hit the nation’s name-brand companies.
Let’s take a look at some of the most well-known crisis management case studies from the last several years, as well as what we can learn from them:
1. The Target data breach
In late 2013, an IT security blogger broke a huge story: Target’s IT systems had been hacked, exposing the personal data of up to 110 million customers. Target issued a statement the following day and posted a video with more details on its website. The company apologized, explained how the hack had happened, and offered free credit monitoring for affected customers.
Unfortunately, there were a few key problems with Target’s response. First, it responded before officials were fully aware of the scope and cause of the problem. This forced Target to later walk back some of its statements, such as the number of customers whose information was hacked. In the eyes of the consumer, it made Target seem unprepared, unprofessional, and even a bit suspicious.
Second, Target posted the message from its CEO to its website and then later realized it wasn’t garnering many views. That was because most consumers were taking to social media—not to the website—to air complaints and interact with the company. This offered a valuable lesson to Target, and others, to respond to a crisis using the appropriate channels.
2. The Volkswagen emissions scandal
In September 2015, the Environmental Protection Agency accused Volkswagen of manipulating its engine controls to be able to pass laboratory emissions tests. Not only was the company violating the Clean Air Act by selling vehicles that didn’t meet environmental requirements, but it was also violating its customers’ trust by making its cars seem more environmentally friendly.
Unfortunately, the way the company handled the scandal made things even worse. As the story continued to evolve, the company’s response was seen as inconsistent and, at times, contradictory to previous statements. Executives claimed they didn’t know about the cheating, only to reveal they did just a few days later. Meanwhile, the company’s PR and social media teams struggled to keep up. As the company set out to recall millions of vehicles, officials promised to reimburse some, but not all, customers for their troubles.
All the while, consumers reported that the company seemed to be handling the crisis in a dishonest way by not fully “owning” its role in the scandal.
The brand likely would have fared better through this crisis if it had taken a few key steps:
- Been up front and honest as soon as the story broke
- Kept its response consistent, with an empathetic and apologetic tone
- Reimbursed all affected customers the same amount
- Demonstrated a commitment to change in some way (e.g., by setting new emissions goals or partnering with an environmental organization to help combat air pollution)
3. Southwest Airlines’ social media response
Right in the middle of the busy 2016 summer travel season, Southwest Airlines was suddenly struck by a wide-reaching technology failure. Its website and other key systems were down for more than 12 hours, prompting the airline to cancel thousands of flights. Over the course of four days, the company worked to respond to customer complaints quickly and effectively, in large part by leveraging social media. Its approach offers some key lessons.
Southwest did several things right in its social media response: It apologized profusely for the inconvenience, admitted fault, and continually posted updates as the crisis unfolded. Southwest’s team even made use of photos and videos posted to Facebook and Twitter to personalize the response.
Unfortunately, the onslaught of customer-service requests and complaints seemed to overwhelm the company’s social media team. Not long after the IT outage began, complaints on Twitter began going unanswered for hours—and, in the case of Facebook, days. Ideally, the company would have answered each customer in a more timely manner.
Finally, Southwest seemed to forget that such a crisis is bound to impact all of its social media channels—even Instagram. The company failed to post an apology or acknowledgement of the situation on its Instagram account, instead choosing to feature its typical content. As a result, the account received hundreds of angry comments—and all of them went unanswered, surely leaving a bad taste in the mouths of many followers.
What other crisis management case studies offer useful lessons that are applicable to your own organization?