Three Recent Crisis Management Case Studies That We Can Learn From

     

crisis-management-case-studies

It’s been a wild and fascinating period recently in the world of crisis management. Let’s take a look at three highly visible crisis management case studies from the past year, looking in particular at what we can learn from them:

  • United Airlines customer service failures

What Happened

It’s close to a year ago that videos shot by fellow passengers of Dr David Dao being forcibly removed from United flight 3411 blew up on social media and, very soon thereafter, the mainstream media.

It started when airline staff in Chicago asked passengers for four volunteers to give up their seats to make room for United employees headed to Louisville. No-one volunteered.

Four passengers were then directly asked to remove their luggage and vacate their seats. Three complied, one did not.

Staff insisted and Dr Dao continued to stay in his seat. Then airport police were called.

That’s when the events unfolded that have been seen millions of times on video.

A passenger with a bloodied face, who had paid for his seat, being forcibly dragged down the aisle as he yelled complaints.

Next morning, United CEO Oscar Munoz issued a statement justifying what happened, describing it as ‘re-accommodating the customers’. Munoz also sent an email to United staff commending the actions of the crew.

More recent mishaps with United Airlines’ treatment of traveling pets has both reminded people of the Dr Dao incident and focused yet more attention on United’s continued failure to build a customer-focused culture.

What We Learnt

This was a perfect illustration of the need for speed.

It took United a day to respond, and even then their response was inadequate, betraying any understanding of the role of social media in reporting and magnifying failures in company customer services.

By Monday morning the story of what happened on flight 3411 had been told and viewed by millions. It took United several days to finally respond in a way that acknowledged the seriousness of what happened and how it made the airline look in the eyes of customers and regulators.

It was too late.

The damage to the reputation and business of United lingers to the present day – refreshed by the unfortunate incidents with the pets.

  • Equifax and the Data Breach

What Happened

On July 29 2017 Equifax discovered a massive data breach which affected the personal information of up to 143 million Americans, including social security numbers and driver licenses. The company believed that the hack had taken place several weeks earlier, even as early as mid-May.

Equifax waited until September to make a public announcement of the problem.

The data thieves knew where to target. Equifax is one of three nationwide credit-reporting companies that track and rates the financial history of U.S. consumers. The companies are supplied with data about loans, loan payments and credit cards, as well as information on everything from child support payments, credit limits, missed rent and utilities payments, addresses and employer history, which all factor into credit scores.

Subsequent events only made the situation worse:

  • The website and consumer telephone lines set up by Equifax so that people could get information and sign up for credit protection were overwhelmed and it took weeks to get them working effectively.
  • It was reported that three executives sold nearly $2m in shares after the breach was discovered but before being publicly revealed.
  • Equifax subsequently twice upped its estimate of the numbers of consumers impacted – by 2.5 million in October 2017 and by 2.4 million in February 2018.

What We Learnt

This is why we build crisis preparedness plans.

A data breach must have been very high on the potential risks that Equifax faced. Given their business, any data loss is serious.

A plan would have had laid out the crisis team, how they should work together, the steps to take, the initial messaging and statements – and the process for escalating the response as it got worse.

Nothing in Equifax’s slow motion and bungled response suggested it had anticipated and planned for such an event.

  • KFC and the shortage of chicken

What Happened

In February 2018, KFC had to close more than half of its 900 stores in the United Kingdom because of a shortage of…chicken.

The social and mainstream media enjoyed the irony of a chicken shop without any chicken and went to town on the story.

The cause was a delivery problem after the chain switched its contract to DHL which said that due to ‘administrative problems’ a number of deliveries were cancelled or delayed.

Loyal customers vented on Twitter and took their families to McDonalds. Some even complained to their local politicians.

Then KFC, even while struggling to get the restaurants re-opened, managed to switch the narrative entirely.

It ran an apology advertisement that was extremely funny (especially to the brand’s core younger consumers) while taking ownership of the problem.

The company was widely applauded by customers and the media for its deft handling of the situation and became the poster child for how well to handle a crisis.

What We Learnt

Among the key elements in a best-in-class crisis response plan are:

  • An understanding of the brand’s key stakeholder, particularly the core consumers. Who are they? Where are they? What are there key considerations? What’s likely to be on their minds when the brand is facing challenges.
  • An understanding of the brand’s promise and ‘voice’. How is it positioned? What’s likely to support or break the trust in the brand in how it responds to a crisis.

KFC’s clever, authentic and borderline obscene response showed it deeply understood both these factors.

It knew its audience (young, hip and irreverent) and it followed through in exactly the kind of tone and language that was consistent with how the brand was positioned in other, more positive marketing.

The result was a swift abatement of the criticism for the closed stores – and the sound of widespread applause for a model crisis response.

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About The Author

Mike Hatcliffe is founder and president of The Hatcliffe Group, a reputation, issues and crisis consultancy. Previously, Mike spent nearly 25 years with two of the world's leading PR agencies. Most recently, he spent 10 years at Ogilvy, as managing director of its US corporate practice, and before that 14 years with Ketchum in both the US and the UK. Mike has worked on crisis and reputation assignments with a range of blue chip companies, leaders in their fields, including LG Electronics, Wells Fargo, Carlsberg, Zebra Technologies, CDW, Quintiles, Rockwell Automation, Unilever, Pepsico, Deloitte, Grant Thornton and HSBC.