In today’s always-on, 24/7 news and comment environment, the reality is that no matter what the nature of a crisis, what you say is always less important than what you do or have done. It used to be that the VP of corporate communications might have a few hours to say “we’re looking into it” before facing the news crews. But today, if you get an hour to keep a potential crisis from exploding into a “twitstorm” in Twitter or on the blogs, you’re doing well.
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KATIE PAINE |
Which is why the recent crises faced by Toyota and Royal Caribbean provide such interesting fodder for Image Patrol. One acted, one didn’t and their respective customers responded with their pockets accordingly.
Royal Caribbean is one of the largest outside commercial investors in Haiti, with a major resort destination in Labadee, on Haiti’s north coast. Its cruise ships regularly stop there for the day, dropping tourists off to enjoy the beaches and water sports. In the wake of the 7.0 earthquake in Haiti, the question obviously arose: Should they continue to offer this option to their passengers?
The area was untouched by the earthquake, so Royal Caribbean was in the unenviable spot of not wanting to appear callous, but also of wanting to do well by the Haitian community. They consulted with the Haitian government, which encouraged them to continue to stop at Labadee. Once the decision was made, Royal Caribbean’s CEO, Adam Goldstein, went on NPR and gave a detailed explanation of the decision-making process, and affirmed that he felt that continuing to bring revenue into Haiti was the right thing to do.
Various PR and marketing magazines and blogs vilified the company for the decision; public comments were almost universally in support of the company’s decision. Even more telling, cruise bookings are up.
On the other hand, Toyota’s problem with its unintentional acceleration festered for years until a dramatic 911 call—made moments before the caller and all of his passengers died in car crash—brought the problem into the spotlight. It quickly escalated from a media crisis to one involving the National Traffic Safety Board. Toyota blamed it on floor mats (even though an investigation of another fatal crash found the floor mats in the trunk). The NTSB wasn’t satisfied and just last week, Toyota announced recalls of even more cars and will now repair and replace parts of the accelerator in hopes of solving the problem.
In a striking parallel, the CEO of Toyota was also on the talk shows explaining how sorry they were. But this time customers weren’t buying the explanation. With the publication of a major exposé by The New York Times, more horror stories surfaced, as well as another problem with brakes on the Prius. Despite the proposed accelerator fix, the estimates were that the crisis would have a serious negative impact on Toyota’s sales. PRN
CONTACT:
Katie Paine is CEO of KDPaine & Partners. She can be reached at [email protected].
Image Patrol Tables
Royal Caribbean Cruises
Criteria |
Grade |
Comments |
Advice |
Extent of coverage |
B |
While it was a hot topic for a few days, other news emanating from Haiti quickly eclipsed the Royal Caribbean story. |
It always helps to have other major news stories bury your lead. In general, however, having your CEO out in front answering questions goes a long way to putting a crisis behind you. |
Effectiveness of spokespeople |
A |
CEO Adam Goldstein came across as a caring, concerned, responsible investor in Haiti. He stressed their long-term commitment to the country and clearly had weighed all sides of the decision. |
Train your CEO to be open and honest enough to be able to talk candidly, not just about his or her feelings, but about the decision-making process. |
Communication of key messages |
A |
Goldstein did a terrific job of articulating the key messages without sounding like he was reading from a script. So when the negatives did come out, they were nicely balanced against the rational and good works that Royal Caribbean was doing. |
Key messages should not sound like key messages. CEOs or corporate spokespeople should always speak from their hearts, not from a script. |
Management of negative messages |
C |
Given Haiti’s domination of the news, it wasn’t surprising that the controversial decision got a fair amount of headlines, and with it the usual negatives. But relatively speaking, the negatives didn’t have a long shelf life. |
There are advantages and disadvantages to tying your story to a major disaster or another event that is dominating the news. The plus is, unless you are really saying or doing something horrific, if it’s bad news it will quickly get subsumed by other news, which is what happened with Royal Caribbean. The downside is that your message can easily get lost, and you can lose control of your reputation. |
Impact on customers |
A |
Given that most passengers didn’t cancel their trips, bookings are up and Royal Caribbean is forecasting a strong 2010, there doesn’t seem to be a lot of evidence that customers disapproved of the decisions. |
Keep your focus on what matters. Don’t get distracted by “nattering nabobs of negativity”—or your PR peers and other so-called experts. Listen carefully to your customers and let that dictate your decisions and actions. |
Overall score |
A- |
The reputation of public relations and its so-called experts took a bigger hit than did Royal Caribbean. |
Your customers, your community and other stakeholders are the experts in a situation like this, and that’s where you should go for guidance and direction. |
Toyota
Criteria |
Grade |
Comments |
Advice |
Extent of coverage |
F |
The media coverage was—by necessity—enormous since the company obviously wanted to get the word out to as many people as possible. The problem was that in this globally connected world, the news was just as big in Japan, causing even more image problems at home than it did here. |
Never forget the international implications of news stories and be cognizant of different perceptions. In the U.S., Toyota customers were concerned about safety. In Japan they were concerned about how the decline in Toyota’s reputation might impact Japan’s reputation for manufacturing prowess. |
Effectiveness of spokespeople |
D |
The fact that there was a 12-day delay between the announcement of the recall and the first press conference was not lost on the media. Toyota’s spokespersons Shinichi Sasaki (in Japan) and Jim Lentz (in the U.S.) were both well-spoken and articulate, but the fact that the president, Akio Toyoda, was gallivanting in Davos and absent from the news conference was no secret to anyone covering the story. The media continuously faulted Toyoda for not saying anything sooner, and journalists were made even more unhappy by having to travel hundreds of miles only to find him not there. |
First of all, in a situation of global proportions, the only appropriate spokesperson is the CEO. Secondly, if you have bad news, announce it in a central location, where it is easy for the media to attend. Never “summon” the media to your location. |
Communication of key messages |
D |
Toyota’s message seems to be that they were more concerned about the impact of the recall on revenues and sales than they were about the people who died in their cars. By not doing anything until forced to by the NTSB, they abrogated the opportunity to express care, concern and compassion. In fact, the major message seemed to be an acknowledgement that it had taken them too long to act, rather than any expression of concern for their customers. |
In any situation when people have died as a result of something your company has done, the message must be “I’m sorry,” and it needs to be conveyed from the highest level on down. |
Management of negative messages |
F |
Toyota lost control of its message early on in this crisis. The only message that they were able to convey was the size and nature of the recall. The NTSB, angry customers and other automotive experts filled in the gap in communications with their own messages, most of which expressed doubts about Toyota’s future, anger at how long it took for Toyota to respond and speculation about the money that the company would lose as a result. |
Without an appropriate corporate response in today’s 24/7 social media world, your competition, your customers and a host of industry experts will quickly fill any vacuum created by the absence of an accessible corporate spokesperson. |
Impact on customers |
F |
With sales declining, and customers openly expressing fears about the safety of their vehicles, the customers were clearly impacted by the news. |
Don’t wait until customers begin to abandon you and lose trust in your brand. It doesn’t take much these days to listen for a response and a reaction from your target audience. |
Overall score |
F |
Toyota did just about everything wrong in its handling of this crisis. Its lack of a rapid response from the CEO, its lack of good messaging and the fact that it didn’t take action quickly enough all contributed to the extent and severity of the damage to its reputation. The question will be, can it recover? |
We have a saying around our office: “’Tis better to beg forgiveness than ask permission.” In a crisis, it is always better to act, do the right thing and then beg forgiveness if you make a mistake. |