Executives Often Underestimate Length Of A Crisis

There are three key timelines in a crisis: before, during and after. Many executives think that once they make a press statement, appear before regulators, or hold a news conference that the “during” part is over and they can go back to business as usual.

Yogi Berra once said, “It ain’t over until it’s over.” Likewise, the crisis ain’t over until an organization’s critical audiences say it is. That means, for example, that the negative press coverage has decreased, that online criticism has waned, that government officials have closed their investigations, and people trust enough to buy your products or services again.

BP and Goldman Sachs, like Toyota, will be in crisis mode for a long time. In the case of BP, we recently learned from a closed-door Congressional briefing that things are much worse than previously disclosed by the company. Whether BP faces more PR damage will depend on how much damage is done to the Gulf of Mexico shoreline. If the environmental damage is contained, then the PR damage will also be contained.

Goldman’s reputation is certainly harmed by the federal criminal investigation, as well as an SEC lawsuit plus six shareholder lawsuits. Obviously, protracted legal actions harm reputation. But the firm’s inability to articulate its genuine commitment to acting in the best interests of all its clients at all times will hurt even more over the long term. CEO Lloyd Blankfein could have gone further in that regard here in comments to some of the firm’s wealthiest clients.

Toyota waited far too long to alert government officials about its sticky pedals and has agreed to pay a $16 million fine. Now much of its reputation will hinge on whether an investigation determines if there were other coverups that might have caused lives and injuries. In addition, it has to make sure that every recalled vehicle is repaired fully and that those recall customers are treated extra special while getting those repairs.

Admitting mistakes — and fixing them as quickly as possible — while delivering public messages that express empathy and concern, are the best ways to shorten a crisis. Those executives who refuse to accept any responsibility for their actions or indecisions, or those of their employees, will only extend a crisis.

One thought on “Executives Often Underestimate Length Of A Crisis

  1. […] About Rich Klein « Executives Often Underestimate Length Of A Crisis […]

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