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September 25, 2018

How to handle crisis depends on CEO’s deeds

mcsk employees at work./FILE
mcsk employees at work./FILE

In East Africa it is still a rare occurrence for CEOs of commercial organisations to face public opprobrium. At present, politicians and those in government hog that unwelcome limelight.

But the time will come, when companies and brands will face issues large enough to vie with public sector misdeeds. It’s inevitable. It comes with scale and is made more likely by corporate arrogance. And when it happens, the impact on boards and executive management will be seismic.

Thanks to a freer press and the ubiquity of social media. Frankly, with multiple failures in our local banking industry, I’m surprised it hasn’t come sooner.

As very few corporates here have the internal resources to manage bad news effectively, CEOs will naturally turn to the PR world for help. But I wonder what help they will find.

The PR industry has evolved, taken on international behaviours and language. It even claims to be strategic. But I wonder how its crisis management capability would rank against the effectiveness of its predecessors of 20 years ago.

The old-time PR fixers, who could kill a story stone dead. Their methods may have been questionable, but their impact was not. So it’s time for leadership teams to consider how to deal with the bad news that will one day come. And much of that will rest on the performance of the CEO.

Any book on crisis management features the BP Deepwater Horizon oil spill of 2010. It’s an object lesson in how to turn a crisis into a full-blown public relations disaster.

The explosion of the rig in the Gulf of Mexico killed 11 people and caused severe pollution problems on the US coastline. The BP CEO at the time was Tony Hayward; a man clearly unprepared making for public comments under pressure.

He made several statements which may have seemed reasonable, even human, to him. But they turned the crisis into a media conflagration.

Asked what he would say to the people of Louisiana, Hayward replied: “We’re sorry for the massive disruption it’s caused in their lives.

There’s no one who wants this over more than I do, I would like my life back.” That did not play well with the relatives of the dead.

Nor did the people of Louisiana - whose environment, lives and businesses had been harmed – sympathise with the disruption to his CEO lifestyle. It wasn’t about you, Tony.

Haywood was also ludicrously over-optimistic about how quickly the well would be capped and the environmental impact controlled. He claimed the damage would be ‘very, very modest.”

Either a downright lie or a colossal failure of management reporting. I still have a T-shirt from that time, emblazoned with the BP logo and the slogan ‘Bringing oil to America’s shores”.

BP compounded the issue by running a glossy, multimillion-dollar TV campaign. President Obama drily noted the money would have been better spent on the clean clean-up.

Chris Harrison leads The Brand Inside www.thebrandinside.com

 

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