Human Resources

JWI 505: Business Communications and Executive Presence Week 5 Lecture Notes

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JWI 505 – Lecture Notes (1206) Page 1 of 7

Crisis Communication

What It Means

What was the biggest mistake you ever made at your workplace? Did you send an email to a colleague containing information they should not have seen? Did you miscalculate some financial data and pass the wrong numbers to your supervisor? Perhaps it was something easily remedied, such as sending a customer the wrong invoice. Alternatively, maybe it was something you could not easily fix, like gravely offending your biggest client. In the face of adversity, what did you do? Whom did you reach out to, and what did you tell them?

Regardless of your role in your organization, you have had to respond to a crisis at some point. That is perfectly normal! In fact, you can expect to face a number of pressing situations every year. But even if crises are inevitable, you still need a communication plan. You must be prepared to mitigate whatever problems may arise, all while exercising a strong executive presence.

In this lecture, you will learn the fundamentals of strong crisis communication. We will explore Jack’s assumptions for crisis management, the resources available to you during a crisis, and what to tell stakeholders if the worst should happen.

Why It Matters

• Poor crisis management can damage your company’s image and your reputation.

• During a crisis, you will not have access to the same resources you normally have.

• A comprehensive communication plan for one issue can serve as a foundation for future crises.

“There is a silver lining to crisis management in that you rarely have to live through the same disaster twice.”

Jack Welch

JWI 505: Business Communications and Executive Presence Week 5 Lecture Notes

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.

JWI 505 – Lecture Notes (1206) Page 2 of 7

What Is Your Gut Instinct?

The biggest mistake you ever made was likely an individual workplace crisis. These happen to everyone and, while they are serious, they rarely threaten the long-term health of your entire organization. Your company will not go out of business because you accidentally filled the company car with the wrong type of fuel. But an organizational crisis, such as a huge public relations scandal, could jeopardize the entire organization’s future.

When you are faced with any crisis, you may be tempted to take one of two actions based on an emotional fear response. Some leaders opt to fight. This often means denying any wrongdoing or loudly denouncing accusers and critics. There are many reasons why this is usually not the best response. You know that passion is a necessity for strong leadership, but you also do not want to have to retract a hasty statement. Emotional outbursts or unfounded claims can also exacerbate your situation. Take United Airlines, for example. In April 2017, the company faced a massive public relations crisis when a passenger was forcibly removed from a sold-out flight; footage of the injured and bloodied passenger being dragged off the plane went viral online. Shortly afterward, United delivered a press release that contained erroneous information. United CEO Oscar Munoz then issued a statement apologizing for “having to re-accommodate” customers. In an email to employees, he also referred to the passenger as “disruptive and belligerent.”1 Both Munoz and United were lambasted for their response, which came off as rash and uncaring.

The other tempting option for leaders is to take flight. They will take extreme steps to avoid a confrontation, including retreating to a remote location or booking meetings all day, so they are unavailable for comment. This is not how a strong leader manages a crisis. The problem will still be there when they finally get around to confronting it, and by then, it may have gotten much worse. In July 2017, Equifax, a consumer credit reporting agency, discovered a cybersecurity breach; the personal data of roughly 143 million consumers had been taken. Neither the company nor CEO Richard Smith made a public announcement about the breach until September. They also did not immediately disclose whether sensitive information like

1 Matt Rosoff, “United CEO Doubles Down in Email to Employees, Says Passenger Was ‘Disruptive and Belligerent’,” CNBC, April 11, 2017, https://www.cnbc.com/2017/04/10/united-ceo-passenger-disruptive-belligerent.html.

JWI 505: Business Communications and Executive Presence Week 5 Lecture Notes

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.

JWI 505 – Lecture Notes (1206) Page 3 of 7

personal identification numbers had been stolen. This late, inadequate response did not help the company’s image at all. Equifax was sued by hundreds of upset consumers; Smith resigned just two weeks after his announcement.

Neither fight nor flight should be your first impulse during a crisis. Instead, you should focus on upholding your best business communication practices. Your messaging must be clear and consistent, and you must be ready to listen and accept feedback from all of your relevant listeners. Shared understanding and alignment of your team’s efforts are essential. When a crisis poses a threat to your company, your reputation, or your career, an effective messaging strategy is vital.

Principles of Crisis Management

Speed is critical in all crisis scenarios, so do not let the situation get ahead of you. As Jack argued, there are five assumptions to apply to any crisis you face, regardless of its scope or whom it affects. Here is what to remember:

1. Assume the worst. Do not think the situation can be easily contained. You will invariably find out that the crisis is much bigger, and affects far more people, than you initially thought. By the time that happens, you cannot stay ahead of the situation, so you need to communicate with stakeholders and the public in a timely way.

Two fatal crashes in late 2018 and early 2019 called into question the safety of Boeing’s 737 MAX airplanes. CEO Dennis Muilenburg sought to reassure investors that he was confident in the planes, saying, “We know our airplanes are safe. We have not changed our design philosophy.”2 His outlook became hard to defend when aviation authorities grounded all 737 MAX planes. Matters got even worse in May 2019, when The Wall Street Journal reported that Boeing had withheld information

2 Cindy Silviana & Eric M. Johnson, “‘Our Airplanes Are Safe,’ Boeing Says as Officials Push Training,” Reuters, December 6, 2018, https://www.reuters.com/article/us-indonesia-crash/our-airplanes-are-safe-boeing-says-as- officials-push-training-idUSKBN1O51QC.

JWI 505: Business Communications and Executive Presence Week 5 Lecture Notes

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.

JWI 505 – Lecture Notes (1206) Page 4 of 7

about the 737 MAX’s safety issues for roughly a year before the first crash. Muilenburg’s reassurances that everything was fine rang hollow. By the end of 2019, investor confidence in Boeing was shaken, and Muilenburg was out of a job.

2. There are no secrets. Do not think you can hide the crisis or keep it out of public view. Eventually, everyone will find out what happened. Never presume you can buy people’s silence, because everyone involved will – and should – be documenting everything.

Uber has drawn intense scrutiny over its workplace culture, especially regarding sexual harassment. Managers and human resource representatives received multiple complaints about certain employees’ behavior. Even CEO Travis Kalanick was alleged to have heard reports of sexual harassment. Not even a major company like Uber could keep this crisis hidden. In 2017, former employee Susan Fowler posted on her blog, detailing her harassment and the threats she received for trying to report it. Kalanick resigned not long afterward.

3. Your crisis management will not be portrayed favorably. Do not think for one minute that outside observers will be on your side, especially if the crisis originated within your company. And you will only make matters worse if you purposely antagonize your critics. Withholding information, blaming others, or lashing out gives people no incentive to sympathize with you.

In early 2018, The Times reported that aid workers from Oxfam, a nonprofit human rights group, committed sexual exploitation while delivering humanitarian relief to Haiti in 2011. The accused workers were removed, but Oxfam now found itself in a massive crisis. Mere days after the report broke, CEO Mark Goldring sat for an interview with The Guardian. While he expressed remorse, he also complained that “people are gunning for Oxfam,” and “anything we say is being manipulated. We’ve been savaged.”3 This was a terrible way to respond to Oxfam’s dilemma; Goldring’s words

3 Decca Aitkenhead, “Oxfam Boss Mark Goldring: ‘Anything We Say Is Being Manipulated. We’ve Been Savaged’,” The Guardian, February 16, 2018, https://www.theguardian.com/world/2018/feb/16/oxfam-boss-mark-goldring- anything-we-say-is-being-manipulated-weve-been-savaged.

JWI 505: Business Communications and Executive Presence Week 5 Lecture Notes

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.

JWI 505 – Lecture Notes (1206) Page 5 of 7

made it sound as if he and the company were being victimized. He resigned by the end of the year.

4. Your organization will undergo changes. Often, a crisis arises due to a failure in policy or process; something went wrong that your company did not catch in time. Stakeholders will demand that you take major steps to prevent such an issue from happening again. They will also expect you to hold people in your organization accountable. It is likely you will have to reprimand or even let go of some of your workforce.

In April 2018, two African American men were arrested at a Starbucks in Philadelphia. The manager called the police on them when they sat down in the store without ordering. Protests ensued, and Philadelphia Mayor Jim Kenney called it a clear example of racial discrimination. In response, Starbucks CEO Kevin Johnson met with the two men and apologized for the incident. The manager who called the police parted ways with the company. Starbucks moved to shut down its U.S. stores for part of a day to hold a racial bias education program. The company also announced a new policy allowing anyone to sit in their stores, regardless of whether or not they were buying anything. By implementing these changes, rapidly and comprehensively, Johnson helped Starbucks stay ahead of the crisis.

5. Your organization will come out of the crisis stronger. It may not feel like it, but the crisis will eventually end. If your company takes the necessary steps to defuse the situation, you will be better equipped to handle any future problems. The key is to draw lessons from the crisis and actually act on them.

Between 2015 and 2016, reports of E.coli and norovirus infections significantly hurt Chipotle’s reputation. In response, company founder Steve Ells issued an apology on national television. For each of its restaurants, Chipotle created the new position of food safety leader to help oversee both food preparation and employee health. Company leadership undertook a series of initiatives, including guaranteeing that employees get paid if they call in sick. Thanks to the major steps Chipotle took, the company weathered its crisis, its stock price rebounded, and customers came back.

JWI 505: Business Communications and Executive Presence Week 5 Lecture Notes

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.

JWI 505 – Lecture Notes (1206) Page 6 of 7

Your Crisis Toolkit

During a crisis, you may feel as if everything is collapsing around you. You may think you cannot control your situation or the narrative being told about you. A crisis can feel particularly disheartening because there is one very important move that you cannot make. Throughout your career, you have hopefully created strong relationships with your superiors, colleagues, and clients. These people can attest to your authenticity and integrity. You will need to rely heavily on these relationships, because during a crisis, you cannot build new ones. This is especially true if your organization created the situation. Few people will want to associate with you in the middle of a crisis since doing so may jeopardize their own reputations. Some of your associates may even cut ties with you altogether. It is painful when this happens, but you cannot blame them.

Whatever you may be feeling, remember that you are not powerless. You have a number of resources at your disposal to mitigate your situation. First, you have more information than anyone else. There may not be any secrets in the end, but you will know the details well before any of your stakeholders or critics do. Use this knowledge to build a comprehensive crisis plan that addresses every possible issue. Because you know more than anyone else, your second key resource is time. You have a head start on responding to your crisis. Issuing a statement as soon as possible shows that you are aware of the situation and are acting immediately to fix it. Having this extra time also gives you a chance to shape your own narrative. How you frame the crisis will set the tone for how everyone else depicts it, whether they are your allies or your critics. Third, you have a wealth of communication channels. Delivering public speeches is usually helpful, but make sure you tell your narrative through social media, too. This allows you to give more frequent updates on your situation, and it helps you reach a wider audience. Finally, you know who all of your stakeholders are. This means you can tailor your crisis communications to different listeners. If your employees are affected, explain what policy changes you will implement and how you will reinforce your company’s values. If you need to communicate with customers, address their concerns before they escalate their complaints.

Above all else, be proactive. Every crisis will lead to change, and you will survive it. How you survive that change will determine what you learn from that situation and whether your company emerges stronger when the crisis is over.

JWI 505: Business Communications and Executive Presence Week 5 Lecture Notes

© Strayer University. All Rights Reserved. This document contains Strayer University confidential and proprietary information and may not be copied, further distributed, or otherwise disclosed, in whole or in part, without the expressed written permission of Strayer University.

JWI 505 – Lecture Notes (1206) Page 7 of 7

Looking Ahead

In this lecture, we explored how to communicate during a crisis. We analyzed Jack’s principles of crisis management. We also assessed an array of response tactics. Remember that all of your communications during a crisis must be grounded in openness and honesty. That is what your stakeholders will respond to best, and that is what will help you weather the storm.

In the next lecture, you will learn how to communicate strategically. We will discuss how to craft purposeful messages that accomplish specific goals. We will also examine different communication styles and assess when to apply them.