Coaching

This is the first of a five-part series on crises. Let’s start by asking ourselves what makes crisis, more specifically, a corporate crisis. A crisis is a situation in which a company’s public reputation deteriorates dramatically so that there is the danger that the company may suffer permanent damage, up to and including ruin.

One of the most egregious examples of a corporate crisis was the proposed sinking of British Petroleum’s Brent Spar drilling platform twenty years ago, or McDonald’s ill-advised reaction to activist protests around the same time. Or consider Tepco, the utility that runs many of Japan’s nuclear reactors, and its mishandling of the destruction of the Fukushima power plant.

In a crisis, a company’s communications department plays a key role. However, before a company sounds the alarm and goes into crisis mode, it is this communications department’s foremost duty to examine whether there actually is a crisis going on. Negative headlines alone, after all, do not constitute a crisis and do not warrant massive reaction. Nor should companies simply fear crises. True, a crisis will put a company’s strategy to the test. But if the company handles the crisis skillfully, it will not just limit any damage it might suffer, but even build its reputation. To find out how, watch this space. Be back in two weeks, and we’ll have more for you.