The Lessons Learned From Profiled Reputational Crises

The examples of reputational crises presented in the prior five articles illustrate

the degree to which a crisis scenario can skyrocket into national news.

The organizations profiled varied dramatically in their responses to the crises. Some organizations, such as Virginia Tech, survived and went on to champion changes in dealing with workplace violence within their own industry academia. Others, such as Arthur Andersen, imploded in a puff of smoke. No organization can ever predict the exact nature of a crisis scenario, but the following themes should be considered as your organization begins work on designing a crisis management plan.

Denial is not a planning strategy. Crisis scenarios will still occur, even if you do not plan for them.

The Virginia Tech shootings were a shocking example of workplace violence. This is not a topic that many organizations like to discuss or prepare to address. Similarly, the topic of fraud or financial mismanagement is not one that organizations generally are eager to address. Both scenarios can destroy an organization if the crisis management response is not credible.

The organization's corporate headquarters need to be able to respond quickly.

Companies, nonprofits and academic institutions with branch offices or franchises need to take special care to ensure that these sub-organizations are fully prepared to deal with a crisis situation. The Domino's Pizza franchise whose employees uploaded the video did not appear to have a plan to deal with a crisis. Fortunately Domino's Pizza Corporate Headquarters did have a plan and at least one person who understood how to communicate with its array of constituencies. If Domino's executive management had not quickly created a Twitter account to combat the negative publicity based on workers behavior, the company's reputation could have suffered even more damage.

Clients and corporate sponsors will flee from companies/nonprofits mired in scandal.

Arthur Andersen imploded almost instantaneously when they were convicted of obstruction of justice in the case involving their audits of Enron. Nonprofits such as ACORN have funding sources that go beyond individual donations such as federal and corporate funding. The House of Representatives voted to withdraw funding for Acorn as did the Bank of America.

The value in having effective crisis management and crisis communication plans.

Effective crisis management and crisis communication plans would have been very beneficial in all of the examples cited. Despite the seeming lack of crisis management and crisis communication plans, some of the organizations such as Domino's and Virginia Tech were able to preserve their reputations. Others, such as Arthur Andersen and ACORN were not. Time will tell if nonprofits such as the American Red Cross will successfully weather their crises with their reputations intact.

Summary

The organizations and crises profiled represent a wide variety of scenarios and responses. In each case the organization's vulnerabilities served to further ignite the crisis at hand and turn what might have been a manageable situation into an event that had a prolonged life in the media and perhaps in the minds of the organization's customers, regulators and other stakeholders.

Copyright (c) 2010 Peg Jackson

by: Peg Jackson

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