How crisis affects company’s reputation

Today I’m going to talk about a subject I’ve especial interest in: crisis communication management. Organizations are usually implementing their communications’ strategy in stable environments, where the communication process can be easily monitored and constantly observed. Unfortunately environments aren’t always stable. What can happen when organizations have to face an unexpected event which destabilizes the environment that they are in? Are companies prepared to adapt and efficiently communicate to society in transparent yet measured manner in such critical scenarios?

The importance of strong and prepared risk communication in volatile environments is a key to a company’s survival. It’s an important tool of strategic communication and should be implemented in every single organization, no matter the segment or size. No company is immune to going through unexpected obstacles or disasters. Companies should think the unexpected and prepare for it. However, if the company doesn’t prepare to respond quickly and with agility, years of a good reputation can be damaged in a matter of seconds with only a few words. In the global and digital market today, quick feedback is required. As soon as an event occurs, misinformation or lack of information can easily destroy a company’s positive reputation.

For example BP’s oil spill in Gulf of Mexico in 2010, known as the worst environmental disaster in U.S. history. The oil spill occurred in April and a few months later the company was still struggling to survive and maintain a healthy reputation at the global market. At the time BP clearly showed it wasn’t prepared to face a crisis situation and as a result its image was negatively impacted.

In addition every company should be able to “read between the lines”. I mean, very often, before facing the crisis the company faces rumours, alerting something is going wrong. Usually those rumours/emerging feedbacks should be treated as early warnings to possible crisis and not being treated as insignificance and ignored by the companies until they get big. Therefore, being able to listening and interpret the signals early are crucial for companies to treat and control issues when they are still manageable. For instance BP received several early “alerts” from employees stating the company was facing problems concerning safety. (more information see: http://www.pbs.org/wgbh/pages/frontline/the-spill/).

 Eventually BP faced two serious accidents, the Texas Refinery explosion in 2005 killing 15 workers and injuring over 170 more and one year later the oil spill in Alaska. Despite its history of safety issues the company didn’t create robust systems and culture capable of capturing early warnings to prevent possibly future accidents. As a result a few years later it faced the worst accident in U.S. history and its image got severely damaged.
 ex-BP CEO Tony Hayward answers questions from the media on an oil-stained beach

Therefore it’s important that crisis communication management isn’t only a plan for when the things going wrong but is systematized and part of the organizations’ culture. The company as a whole needs to understand and practice at the daily basis the importance of a crisis communication management. It should be part of the company’s value providing lots of training and information necessary to employees. This way the company will decrease frequency of crisis scenario since the rumours/ feedback will be addressed at early stages. Furthermore the whole company is going to be prepare to deal and face crisis when and if comes.  

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