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WHAT a disaster.
2009/2010: Toyota recalls millions of cars worldwide following the deaths of 52 people, believed to be attributed to faulty accelerator pedals, floor mats and brakes. The recall costs an estimated $2 billion, results in a congressional hearing, plant closures and enormous shame on the Japanese brand.
2010: The Deepwater Horizon oil spill, caused by an explosion that critically damaged an oil gusher, kills 11 men and causes 4.9 million barrels of crude oil to flood fragile coastline in the Gulf of Mexico. Just last week, BP announced a lower-than-expected earnings result, in part attributable to the spill, causing its share price to fall 2%. The clean-up costs at least $8 billion and results in another congressional hearing.
2011: Newscorp shuts down the 168-year-old newspaper News Of The World after serious allegations of phone hacking surface. Senior editors are arrested and Rupert Murdoch and son James are forced to testify before the British parliament. It also wipes out Murdoch's $90 million purchase plan for BSkyB and causes Newscorp shares to plunge 7%.
Better Business discussed these corporate nightmares with two public relations and branding experts, asking them if recovery was possible and what lessons SMEs can learn.
Dtb managing director Michael Molloy said the first response to any disaster was critical.
“The British PM came out and quickly admitted he made a mistake (hiring former NOTW editor Andy Coulson), but the Murdochs were not so forthcoming,” he said.
“I just found they were slow to acknowledge they were at fault, and that trust factor is lost.
“When people acknowledge they've made a mistake and work to try and fix it as opposed to try and deflect it, they gain more in the long run. Up until the end, they defended Rebekah Brooks until she couldn't be defended any more and she had to fall on her sword.”
Mr Molloy however, said people soon forget and reputation recovery was possible.
“The Toyota president stepped out in front of media and took responsibility, and people respected that. I think if it's handled in the right way, people will forgive.
“Bigger companies can do this more easily because they can move on to greener pastures.
“I think they can get some of their market share back, but clearly they have to look at other ways of doing things.”
Mr Molloy said in situations like these it was imperative leadership was clear and that communication was constant.
“You must own up, be proactive and not let things fester. You must be decisive, have a plan in place and outline what will be done to fix it.
“SMEs can look at this and realise they must have clear business values which owners and staff follow.
“It must be clear what is acceptable and what is not, as well as what the repercussions are.”
The Buzz PR owner Nyssa Berryman said while each company's reputation had been damaged, recovery was certain.
“Over time generally people can be forgiving – but it depends on how it is handled.
“More often than not people just want to know who is responsible, and what they are going to do about it. Communication is the key for any disaster for any size organisation.
“It is also interesting how the media can move quickly and take a story from top of mind like we have seen with News of the World case, where it was saturating the news, then the death of Amy Winehouse and the tragic Norway massacre now dominates the news stories. What is top news one day can be old news the following day.”
She said larger organisations recovered easier because they had more damage control resources at their disposal.
“Reputation management is vital. Already Newscorp executives have shown a united front and all appearances, answers, comments, etc have been controlled.
She said these cases should act as a warning to SMEs.
“No matter what type of business you have, you should be prepared for the ‘what ifs', from product recalls, disgruntled ex-employees, unethical behaviour or staff accidents in the workplace, all your procedures should be reviewed in the event of something similar happening
WHAT a disaster.
2009/2010: Toyota recalls millions of cars worldwide following the deaths of 52 people, believed to be attributed to faulty accelerator pedals, floor mats and brakes. The recall costs an estimated $2 billion, results in a congressional hearing, plant closures and enormous shame on the Japanese brand.
2010: The Deepwater Horizon oil spill, caused by an explosion that critically damaged an oil gusher, kills 11 men and causes 4.9 million barrels of crude oil to flood fragile coastline in the Gulf of Mexico. Just last week, BP announced a lower-than-expected earnings result, in part attributable to the spill, causing its share price to fall 2%. The clean-up costs at least $8 billion and results in another congressional hearing.
2011: Newscorp shuts down the 168-year-old newspaper News Of The World after serious allegations of phone hacking surface. Senior editors are arrested and Rupert Murdoch and son James are forced to testify before the British parliament. It also wipes out Murdoch's $90 million purchase plan for BSkyB and causes Newscorp shares to plunge 7%.
Better Business discussed these corporate nightmares with two public relations and branding experts, asking them if recovery was possible and what lessons SMEs can learn.
Dtb managing director Michael Molloy said the first response to any disaster was critical.
“The British PM came out and quickly admitted he made a mistake (hiring former NOTW editor Andy Coulson), but the Murdochs were not so forthcoming,” he said.
“I just found they were slow to acknowledge they were at fault, and that trust factor is lost.
“When people acknowledge they've made a mistake and work to try and fix it as opposed to try and deflect it, they gain more in the long run. Up until the end, they defended Rebekah Brooks until she couldn't be defended any more and she had to fall on her sword.”
Mr Molloy however, said people soon forget and reputation recovery was possible.
“The Toyota president stepped out in front of media and took responsibility, and people respected that. I think if it's handled in the right way, people will forgive.
“Bigger companies can do this more easily because they can move on to greener pastures.
“I think they can get some of their market share back, but clearly they have to look at other ways of doing things.”
Mr Molloy said in situations like these it was imperative leadership was clear and that communication was constant.
“You must own up, be proactive and not let things fester. You must be decisive, have a plan in place and outline what will be done to fix it.
“SMEs can look at this and realise they must have clear business values which owners and staff follow.
“It must be clear what is acceptable and what is not, as well as what the repercussions are.”
The Buzz PR owner Nyssa Berryman said while each company's reputation had been damaged, recovery was certain.
“Over time generally people can be forgiving – but it depends on how it is handled.
“More often than not people just want to know who is responsible, and what they are going to do about it. Communication is the key for any disaster for any size organisation.
“It is also interesting how the media can move quickly and take a story from top of mind like we have seen with News of the World case, where it was saturating the news, then the death of Amy Winehouse and the tragic Norway massacre now dominates the news stories. What is top news one day can be old news the following day.”
She said larger organisations recovered easier because they had more damage control resources at their disposal.
“Reputation management is vital. Already Newscorp executives have shown a united front and all appearances, answers, comments, etc have been controlled.
She said these cases should act as a warning to SMEs.
“No matter what type of business you have, you should be prepared for the ‘what ifs', from product recalls, disgruntled ex-employees, unethical behaviour or staff accidents in the workplace, all your procedures should be reviewed in the event of something similar happening