Guest Post: Crisis Comms Means Knowing When to Hold ‘Em and When to Walk Away

Another day, another crisis, it seems. But when a crisis arises, is it mandatory that a company react publicly?

Chris Gidez, U.S. director for risk management and crisis communication at Hill & Knowlton, takes a look at two recent case studies – Toyota and Taco Bell – to compare and contrast when a public response is appropriate, or even necessary. One of those circumstances: “The company is backing up its words with actions – e.g., file suit, etc.”

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When is it the right strategy to fight back in public?

Two recent and unrelated events brought to mind the hearing scene from the great 1981 film, Absence of Malice.

In the scene, James Wells, a Justice Department official (played by Wilford Brimley) is questioning a number of people about a criminal investigation gone awry.  One of those being questioned is Michael Gallagher, a liquor wholesaler (played by Paul Newman):

Wells:  “Everybody’s just doing their job.”
Gallagher:  “And Teresa Perrone’s dead. Who do I see about that?”
Wells:  “Ain’t nobody to see.”

Having done crisis management for the better part of my adult life, and seeing companies’ reputations sullied, I can relate to the line, “Ain’t nobody to see.”

Too often, companies’ reputations are unfairly damaged – often permanently, thanks to Google – by allegations (sometimes malicious) ultimately proven wrong.

Company executives struggle with the question, “Who do I see about that?

Traditionally, companies have resisted the idea of joining the public fight; choosing instead to maintain a low profile out of fear of exacerbating the situation, or hoping to prevail in the court of law.  They believe that they must adhere to Marquess of Queensbury rules, even while their opponents steal from the WWE playbook.

But faced with the prospect of a public flogging at the hands of the media, trial lawyers and/or publicity-seeking politicians, more and more companies are rethinking that approach.

The two events that reminded me of this scene were Taco Bell’s aggressive and deliberately public reaction to the class action lawsuit accusing the company of misleading customers about the composition of its ground beef they use, and last week’s report from the National Highway Traffic Safety Administration (NHTSA) that ruled out electronics problems as a cause for the reported stuck accelerator problems that led to the infamous Toyota recall last year.

Let’s start with Toyota.

Around this time last year the auto company found itself in the middle of a world-class s**t-storm following the recall of millions of vehicles due to accelerator problems.   Congressional investigators – helped in part by trial lawyers and auto critics – could smell the blood in the water and Toyota executives were hung, drawn and quartered on live television.

The popular scapegoat for the problem was on-board electronics.  And notwithstanding the insistence of the Toyota executives that there was no evidence to suggest the electronics were the cause of any problem, the politicians and the media weren’t about to let go of that theory:

At a February 24 House oversight committee hearing, Rep. Brian Bilbray pressed the question to Toyota CEO Akio Toyoda:

You stated that you had 100%, you were 100% sure that the difficulties with the pedals, with the acceleration, was not electronic, that it was not going to be involved with the data systems, that it was a physical problem.  Do you stand by that statement?

At the same hearing, Ohio Rep. Marcy Kaptur (in her own, fractured sort of way) chose to excoriate the company for issues well beyond accelerator safety:

Mr. Toyoda.  I am not satisfied with your testimony.  I am being very forthcoming.  I do not feel it reflects sufficient remorse for those who have died.  And I do not think you have accurately reflected the large number of complaints that have been filed with Toyota for nearly a decade.  So I as one member am disappointed…  Mr. Toyoda.  How did Toyota lose its way?  You say in your testimony your company grew too fast.  Some smart lawyers gave you those words.  I think what happened was your company went from emphasizing long-term quality values and corporate responsibility to fighting against safety regulations, against insider influence inside this city and your own capital in Japan, and environmental regulations and indeed worker rights and card checks inside your company.

And even though Mr. Toyoda told lawmakers that he was “absolutely confident” that the electronics of Toyota’s gas pedal systems were not the source of problems, his word evidently didn’t count for much.