08 May. 2014 | Comments (0)
Imagine that you were just named to a CEO position at a top corporation. This has to be one of the most thrilling adventures of your life. But after only a few weeks on the job, you learn that the company has been hiding information for over a decade about a product defect that cost the lives of 13 people, and you will need to recall millions of units from consumers. Mary Barra, CEO of GM, doesn’t have to imagine the situation; she is living it. Most of the people who end up in top jobs have never had any training for or experience in dealing with communicating in a crisis on the big stage. I thought it might be useful to put together a playbook that every leader should have ready for when it hits the fan.
First, you need to realize that defining and solving the problem is critical, but equally important is how you handle the situation. John F. Kennedy famously stated in a 1959 speech that the word crisis in Chinese is comprised of two brush strokes. One represents the word “danger” the other “opportunity.” While experts have since noted that the linguistic point isn’t quite right, the bigger idea is still valid. Ms. Barra seems to understand this because in her letter to employees on March 4th, she stated: “Our company’s reputation won’t be determined by the recall itself, but how we address the problem going forward.”
So far, however, she doesn’t seem to be heeding her own advice. While news reports say she ordered an apology, it’s not clear whom she was ordering to apologize. The first rule of crisis communication is to admit your mistakes publicly. While this may drive your lawyers crazy, it will build tremendous goodwill in the court of public opinion.
In addition, she has remained silent and refused to do any interviews. My second rule is to communicate early and often: tell it all and tell it fast. At the very least, in the weeks ahead, she will have to answer questions from government officials. The day after her letter to employees, the National Highway Traffic Safety Administration ordered the company to answer over a 100 questions about events leading up to the recall. In my own research on crisis communication I have found that the leader’s voice is one of the most critical components in developing a strategy for communicating during a crisis.
Besides hearing from the leader, however, the media wants to tell a good story with victims, villains, and visuals. Despite Ms. Barra’s wishes to keep information private, the New York Times was able to write a front page business section article using its inside sources. I like to tell my students and clients that communication is like a communicable disease. As a result, my third rule is that you need to be able to tell your side of the story most efficiently and most eloquently through the media or someone else will do it for you.
Communicating early and often, however, is easier said than done. Usually you have to communicate before all of the facts are in. As a result, companies need to communicate values, such as concern for their customers’ safety, and to show a commitment to coming to the aid of people affected by the crisis, even if you do not have all of the details yet. Barra did address this in her letter to employees when she said: “First and foremost, everything we are doing is guided by one unwavering principle: do what is best for our customer. Customer safety and satisfaction are at the heart of every decision we make.”
The problem companies face in a crisis, however, is that often the evidence doesn’t seem to back up the rhetoric. Why didn’t senior executives like Ms. Barra know about the problem given that it had surfaced over a decade ago if the customer comes first at GM? And is the bureaucracy so debilitating that no senior executive in the company heard anything about the defect in question for over a decade? This leads to my fourth rule, which is that you need to explain why things will be different in the future. What everyone will want to know is how she is going to help GM fix the actual defect on the 1.6 million cars, but more importantly, how she is going to change a bureaucracy that can hide that problem for over a decade.
Finally, while I admire Ms. Barra’s commitment to handling the problem herself, this may prevent her from following my fifth and final rule for executives who find themselves in this predicament, which is that you need to keep the business running. We can expect weeks of challenges from lawyers representing those who died as a result of GM’s negligence, from congressmen hoping to score points in an election year by beating up on the company the US government once owned, from the media which will lose patience with her silence, and from employees, who must be wondering if the company can weather yet another storm. What we have heard from sources the media has spoken with is that Barra named several key executives to oversee the recall. Who is going to make sure that the company remains vibrant and doesn’t get sucked into the crisis full time? At one company I worked with a few years ago, the CEO focused on managing the crisis while the COO and president focused how to make the business more successful after the storm had passed.
Assuming Ms. Barra and GM do weather the storm, they would do well to remember the words of President Kennedy’s rival in the 1960 election, President Nixon. In his famous Checkers speech of 1952, Nixon said, “The easiest period in a crisis situation is actually the battle itself. The most difficult is the period of indecision—whether to fight or run away. And the most dangerous period is the aftermath. It is then, with all his resources spent and his guard down, that an individual must watch out.”
This blog first appeared on Harvard Business Review on 3/11/2014.
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