Big brands show what not to do in a crisis

Some of Australia’s biggest companies have been in crisis mode over the past week, demonstrating the need for all businesses to be prepared for how to respond to negative publicity.

A major fraud scandal at Commonwealth Bank, and the subsequent public criticism of its response to the accusations, saw its share price plunge and the board withhold the bonuses of the bank’s executive team.

Customers, commentators and politicians alike were outraged that when news of the scandal first broke; it did not appear to take the matter as seriously as it should.

Meanwhile, supermarket giant Woolworths hit the headlines after a payments glitch saw it duplicating historic transactions – drawing customer ire not just for “theft” but for a perceived breach of privacy.

Adding fuel to the fire for Woolworths was its lack of clarity on how many customers had been affected and when the money would be refunded. A day after the scandal broke, the ‘Latest News’ page on its website still had no statement to customers about the issue.

In fact, when My Business accessed the page, it featured a series of 10 apologies for catalogue mistakes and pricing errors, with no positive news or insights into the company’s service offering, CSR activities or other events.

The PR disasters echo the comments made by Rick Stone of risk management consultancy Tigertail in response to the fatal Dreamworld accident in October 2016.

“[Businesses] need to be able to plan for dealing with that sort of crisis,” he said.

“It’s primarily a communications art, and it’s about ensuring that you are maintaining the reputation of the organisation and therefore the value of the organisation.”

All three examples demonstrate the role that crisis management has in saving a business’ reputation. Bad publicity, customer feedback or public complaints can be mitigated if the response is swift and comes across as genuine. It is also important to address the relevant consumer or regulatory concerns, making it apparent you have heard and understood their point of view.

Trying to sweep an issue under the rug, or defend the indefensible, is likely to cause much more damage to a business from which it can take a long time to recover.

 

Related Articles

promoted stories