CrisisManagementCrisisManagementBasics“Nocomment”fuelshostilityAlwaystrytobehelpfulBeawareofdeadlinesBefriendjournalistsbeforethecrisishitsCrisisManagementTipsAppointaspokespersonwhoispersonableandcredibleSetupacentralplacewheremediaandthepubliccangetinfoKeeptheinformationcomingBeaccessibleandreturnallcallsBehonestExamplesofCrisisManagementOdwallaExxonCaseStudyOdwallajuicee-colioutbreakin1996HealthofficialsinWashingtonstateinformedthecompanythattheyhaddiscoveredalinkbetweenseveralcasesofE.coli0157:H7andOdwallafreshapplejuice.CaseStudyOnechilddiedandmorethan60peopleintheWesternUnitedStatesandCanadabecamesickafterdrinkingthejuice.Salesplummetedby90%,Odwalla'sstockpricefell34%.Customersfiledmorethan20personal-injurylawsuitsandthecompanylookedasthoughitcouldwellbedestroyed.Whatdidthecompanydo?Odwallaactedimmediately.Althoughatthepointwheretheywerefirstnotifiedthelinkwasuncertain,Odwalla'sCEOStephenWilliamsonorderedacompleterecallofallproductscontainingappleorcarrotjuice.Thisrecallcoveredaround4,600retailoutletsin7states.Internaltaskteamswereformedandmobilized,andtherecall-costingaround$6.5mwascompletedwithin48hours.TakingResponsibilityOnallmediainterviews,theCEOexpressedsympathyandregretforallthoseaffectedandimmediatelypromisedthatthecompanywouldpayallmedicalcosts.This,alliedtothepromptandcomprehensiverecall,wentalongwaytowardssatisfyingcustomersthatthecompanywasdoingallitcould.InternalcommunicationsTheCEOconductedregularcompany-wideconferencecallsonadailybasis,givingemployeesthechancetoaskquestionsandgetthelatestinformation.Thisapproachprovedsopopularthatthepracticeofquarterlycallssurvivedthecrisis.ExternalcommunicationsWithin24hours,thecompanyhadanexplanatoryWebsite(itsfirst)thatreceived20,000hitsin48hours.Thecompanyspoketothepress,appearedonTVandcarriedoutdirectadvertisingwiththeWebsiteaddress.Allpossibleattemptsweremadetoprovideuptotheminute,accurateinformation.FixingtheProblemThenextstepwastotackletheproblemofcontamination.ThecompanyswitchedfromunpasteurisedjuicetoaprocesscalledflashpasteurizationwhichwouldguaranteethatE-colihadbeendestroyedwithoutcompromisingflavor.FixingtheProblemWithinmonthsoftheoutbreak,thecompanyhadinplacewhatsomeexpertsdescribedasthemostcomprehensivequalitycontrolandsafetysysteminthefreshjuiceindustry.OnDecember5,thecompanybroughtbackitsapplejuice.ThenewprocesswascommunicatedinalladvertisingandpublicoutreachcampaignsCostandbenefitOdwallamadearapidrecovery.Muchofthegoodwillandtrustithadbuiltupovertheyearsremained.Salespickedupagainquitequickly.CostandbenefitThecompanydidpayalargecost.Odwallapleadedguiltytocriminalchargesofsellingtaintedapplejuiceandwasfined$1.5m-thelargesteverassessedinafoodindustrycasebytheUSFoodandDrugAdministration.CaseStudyIn1989,theExxonValdezoiltanker,enteredthePrinceWilliamSound,onitswaytowardsCalifornia.Theshipranagroundandbeganspillingoil.Withinaveryshortperiodoftime,significantquantitiesofits1,260,000barrelshadenteredtheenvironment.CaseStudyAtthemomentofthecollisionthethirdmate,whowasnotcertifiedtotakethetankerintothosewaters,wasatthehelm.TheprobablecausewasestablishedthattheCaptainandmanyofthecrewhadbeendrinkingalcoholinconsiderablequantities.Whatdidthecompanydo?Theactiontocontainthespillwasslowtogetgoing.Thecompanyrefusedtocommunicateopenlyandeffectivelytothepublicabouttheincident.TheExxonChairman,LawrenceRawl,wasimmenselysuspiciousofthemedia,andreactedaccordingly.PoorCrisisManagementMediacoverageescalatedwhileExxondodgedthemediaTheChairmanrefusedtobeinterviewedonTVandsaidthathehadnotimefor“thatkindofthing.”Acompanyspokesmanmisrepresentedtheextentofthespillandclean-upeffortsThiswasincontrasttothefootageoftheecologicaldisastershownonTVFailuretoFixtheProblemWhileExxonstalledandattemptedtocoveruptheproblem,theclean-upoperationwasslowtobeginAround240,000barrelshadbeenspilled,withanothermillionstillontheship.Duringthefirsttwodays,whencalmweatherwouldhaveallowedit,littlewasdonetocontainthespillage.Thisspillagespreadoutintoa12squaremileslick.TheProblemCompoundsThenthebadweatherstruck,makingfurthercontainmentalmostimpossible.Aftermorethanaweek,thecompanywasstillgivingnogroundontherequestforbettercommunication.ThemediaclamorbecamesohostilethateventuallyFrankLarossi,theDirectorofExxonShipping,flewtoValdeztoholdapressconference.Itwasnotasuccess.Smallpiecesofgoodnewsclaimedbythecompanywereimmediatelycontradictedbytheeyewitnessaccountsofthepresentjournalistsandfishermen.OutrageBuildsJohnDevens,theMayorofValdez,commentedthatthecommunityfeltbetrayedbyExxon'sinadequateresponsetothecrisis,incontrasttothepromisestheyhadbeenquicktogiveofhowtheywouldreactinexactlythiseventuality.PoorCommunicationEventually,ChairmanRawlwasinterviewedliveHewasaskedaboutthelatestplansfortheclean-up.Itturnedouthehadneglectedtoreadthese,andcitedthefactthatitwasnotthejobofthechairmantoreadsuchreports.Heplacedtheblameforthecrisisatthefeetoftheworld'smedia.TheAftermathThespillcostaround$7billion,includingthecleanupcosts.$5billionofthiswasm