How Volkswagen and Turing Pharma Diverge on Crisis Management

BY Katie Paine, CEO, paine publishing

Widespread use of Twitter and other social networks has transformed crisis communications radically. In “the good old days” PR pros and lawyers crafted statements that were carefully doled out to a comparatively docile media. Today, good management of a crisis means avoiding being named the “Most Hated Person in the World.” Walter Palmer, the dentist who killed Cecil the Lion, held the dubious distinction for most of August 2015.

This month the title goes to Martin Shkreli, CEO of Turing Pharmaceuticals, which increased by more than 5000% the price of a little-known drug used to treat AIDS, putting it out of the reach of most of patients who need it. Almost simultaneously an iconic and beloved brand was accused of polluting the planet to a much greater extent than anyone knew. Volkswagen confessed to years of faked emissions numbers on its popular diesel-powered cars. The brand has a lot of equity in its trust bank. That, many mea culpas and swift action probably will see the crisis pass by this time next year. VW appears to have learned from history; Turing seems doomed to repeat it.

Volkswagen

VW has ousted its CEO, quickly authorized an investigation to identify the culprits and begun to clean house. It’s announced plans for recalling the 11 million cars involved, starting early next year. Whether or not part of its strategy was to mobilize fans, a significant amount of media coverage quoted longtime VW owners’ love of their cars and loyalty to the company. All these are actions experienced PR professionals would recommend to senior leaders. They seem to be denting the negative publicity. The long-term implications are yet to be known, as lawsuits and hearings keep the crisis in the news. Predicted layoffs and cost cutting will add to the coverage. Given VW’s long history of good behavior, it probably can survive the current crisis.

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Turing Pharmaceuticals

The same cannot be said of Turing. In a crisis, context is king. For a pharma company to take heat for high prices is nothing new. So what makes Turing, and specifically CEO Shkreli, different? Part of it is Shkreli’s age (32) and his inexperience. Turing’s actions demonstrated a complete absence of strategy, research and understanding of the implications. But whether it was Shkreli’s ego or naiveté (or a lethal combination of the two), minutes after the price hike was announced, the Twitterverse bestowed the “Worst Person on Earth” moniker on him. Days after he promised lower prices, there’s no sign of the labeling lessening. The Feds are stepping up their probes, pols are attacking him, even the industry is distancing itself from him.

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CONTACT: Katie Paine measurementqueen@gmail.com

This article originally appeared in the Oct. 12, 2015 issue of PR News. Read more subscriber-only content by becoming a PR News subscriber today.