The worst nightmare of any Fortune 500 executive is to find a real giant killer on their front door, and a mishandled PR crisis is a major problem.

No company is completely immune to the consequences of bad press, which can include lost customers, lost revenue, and lost credibility. In the consumer world of today, a reputation still takes a lifetime to build, but only a single tweet to destroy. There is a reason 5WPR encourages its clients to be proactive rather than reactive to the various crises a company encounters. One thing in common for companies in a crisis that have weathered the inevitable storm is that they did not have to INVENT a public relations process. They simply utilized what they already had in place.

 

Facing The Giant of Bad Publicity: 2009-10 Real World PR Crisis Analysis by 5WPR

Take, for example, arguably the biggest 5 PR crisis of the past 5 years, Toyota recalling nine million automobiles worldwide. From late 2009 to early 2010, Toyota was forced to issue three separate recalls due to reports of unintentional acceleration caused by misplaced floor mats and sticking accelerator pedals. Already struggling to stay above water after the recession, this hit the company where it really hurt: public image. The PR crisis kept escalating and by late January 2010, Toyota’s shares decreased in value by 15% and the fallout continued from there.

Although the aftermath could have been managed in a way to soften the blow to Toyota, the company committed a major PR mistake at the very beginning of the crisis which forced them into a defensive position right off the bat. Toyota’s top executives, including the company’s president, Akio Toyoda, remained quiet. Who knows what they were thinking. Maybe they thought that it would simply go away. But to be silent during the first few critical days of the crisis allowed the problem to snowball and when they finally did speak, they had a lot more explaining to do.

So while we can analyze what Toyota has done in reaction to this crisis, always remember the truth is that this can happen to any company, even yours. The second you forget, that is the moment it happens.

 

PR Crisis Unintended Consequences

Toyota’s immediate non-reaction to the crisis ultimately worked against them.When faced with a crisis, employees, consumers, the media, and in this case, lawmakers, want to hear from the very top. And as the top executive, you should want to get out in front of the media blitz so that you can retain a bit more control. The consequences of their attempt to keep silent during the conversation that the public was having about them had a negative effect and Toyota was left picking up the pieces. More questions were raised. It just so happened that at this time

Toyota was cutting jobs at a British plant. The perceived hypocrisy of cutting corners while quality suffered only fanned the flames of consumer outrage. As a result of the recalls and the blow to Toyota’s credibility, the media had a feeding frenzy and consumer opinion of the company, long known for reliability and quality, plummeted. To add to the chaos, several investigations, including hearings in the House Energy and Commerce Committee and the House Oversight and Government Reform Committee, were launched which put the company under a major public scrutiny.

Was staying quiet at the beginning of the crisis a good move on Toyota’s part? Many top PR firms say no, and for good reason. The decision to stay out of the conversation does not keep the conversation from happening. The public that was aware of the crisis, and at the time the Rasmussen poll indicated that 72% of Americans were following the Toyota recall fallout, railed against a company.

Today, Toyota has recovered some of its positive image, and while they are still suffering from the scandal from hits on social media, investigations, and more, the fact of the matter is that you don’t
become top dog in the industry without making at least a few enemies. Still, the scandal not only cost them in credibility and customer loyalty, but also 2 billion dollars in correcting recalls and lost sales.

So what could have been done differently? Here are the top three things, but keep in mind, hindsight is always 20/20. At the end of the day, prevention and preparation will win you public support every single time.

1. Transparency is the Key
For starters, a good reputation in this day and age revolves around transparency. When your name is being dragged through the mud, the only defense that doesn’t smack of “cover-up” or prevarication is being able to open your arms wide and say, “We have nothing to hide.”As companies like BP have demonstrated, when mistakes are made, apologies will be accepted by the public, as long as you are open and honest about what you are doing to fix them. You can’t do that from behind closed doors, or by shutting down or changing the name of your company.

2. Do Not Play Favorites
What an individual does with the name of your company is not much different than if the company sanctioned
the behavior. So when you are facing a company-wide crisis that suggests a mistake was made, find out who was responsible and make that part of your communication. By taking public action and responsibility by solving the problem, and clearly communicating what you are doing to make sure the problem does not repeat itself, you demonstrate with actions and not words that you are committed to the same values that the public will hold you accountable for if you don’t.

That goes the same for upper management as well, unfortunately. A friend of mine once said, “The appearance of propriety is just as important as propriety itself.” If your management cannot account for what happens within
your company, then YOU will. If your management team holds up their hands and says, “I don’t know what happened?” then they are part of the problem in the first place. Don’t make the same mistake twice.

3. Emphasize the Positive
How do you push down bad news? By turning bad news into good news and problems into opportunities. Eventually Toyota caught on and used this crisis as a way to underline customer appreciation. The company took to social media, television, and print to reach out reinforce their commitment to the consumer. People love to hate the villain, and in a scandal, a large company makes for the sort of villain everyone can easily root against. But having the capacity to admit mistakes and refocus your company’s image makes for a compelling story.

The moral of the story is…
While there is no substitute for prevention, preparation means making sure that your company has the sort of culture that can stand up to public scrutiny. If your company policies are something that you feel you might need to apologize for in the future, you should start the countdown now for your own PR crisis. However, even if you do everything right, that doesn’t mean your employees will. Having policies in place that address bad behavior, both as a reflection on the company and how the customers perceive you, gives your company the chance to take the sort of action that your customer can admire, rather than ridicule to the billions of others online looking for the next crisis to gossip about.