Maruti Suzuki Alto 800 and Hyundai i10 were among a batch of five cars (Alto, i10, Nano, Polo, Figo) that failed to pass the global New Car Assessment Program (NCAP) by a UK-based independent charity. Since the time the news broke, there has been very little effort on the part of these companies to come forward with any kind of official communication to address people's concerns. What is the best policy when such a crisis hits a company? Stonewalling a journalist, keeping mum altogether, or communicating its stand clearly?
Founder & director, Thought Starters
A leader never wastes a good crisis. But to leverage a crisis, leaders should first acknowledge that the problem exists. The recent case of how some renowned Indian cars companies have reacted - in fact, not reacted to the questions and allegations following the damning car safety report by Global NCAP - is a classic example of crisis going kaput.
Companies that manage their reputation proactively are able to deal with crises better or even avoid crises. In the case of the car industry, Indian car safety standards do not match global standards for a reason. Across India, a large percentage of cars are used for driving within the city limits at an average speed of 20 km/hr in a bumper to bumper traffic while dodging cows, potholes and jaywalkers. At such low speed, an air bag is unnecessary.
But should car makers have left consumers to discover this insight for themselves? A thought leader would proactively educate their audience about why they built their car a particular way for a particular geography. Leaving a piece of information as critical as safety in the hands of a third entity can cause damaging speculation. In fact, these manufacturers should have leveraged online forums and other media channels to communicate this proactively to their clients. It is an ideal opportunity for car makers to research and share their findings about what works best on Indian roads and how they have used those insights to design their cars for many years while not compromising on customer safety.
So what do you do when the word is out and the damage is done? How do you contain it? Not by hoping for the story to die. After all, this finding has the capacity to put a perennial question mark over any brand's promise of quality. A thought leader would look at this issue as an opportunity to engage with the audience. If car makers believe that they have made the right decisions for their customers, they should answer the questions, not ignore them. In fact, this is the time to plug into their customer base and invite recommendations and responses to the Global NCAP study that would help reinforce their commitment to the customers. They should also bring in opinion leaders from India together to endorse the design philosophy adopted.
Thought leadership is driven from the top in any organisation. Only when the trigger is pressed in the C-suite does the bullet shoot past the organisational layers causing the desired impact. The CEO is the 'face' of the organisation and is an important vehicle for conveying the brand's sentiments. In this case, he should be leveraging the power of digital/social media. An online clip of the CEO explaining the organisation's decision to do what it did would reaffirm people's faith in the brand.
One needs to remember, the source of a leader's power and prestige is the people who believe in the brand promise. The moment you stop connecting and relating with them, you put yourself at risk of losing your influence as well.
COO, Percept Profile
Effective communication is the key to handling a crisis of this nature. Keeping mum or stonewalling journalists is likely to reap negative dividends in the long run. The media will be quick to pick up on the lack of a response from the company which could damage the reputation of a company that has otherwise had a clean record in the past. An inquisitive journalist would be inclined to inquire deeper in the absence of clear answers or clarification from the company. This could yield more unsavoury details, which could have been done without in the first place.
Quick fact checking is the best bet for the PR agency before embarking on a communication and damage control exercise in such a situation. The message that goes out, particularly to electronic media, which is the fastest to react to such news, should be to the point.
Social media needs to be handled with utmost care in such crisis situations. Journalists nowadays use the Twitter platform to source stories as well as to confirm them. This platform can be engagingly used to tackle negative publicity by putting out acknowledgments and countering allegations with positive steps and remedial measures.
One way to deal with crisis on a digital platform like YouTube could be countering it with another video, which projects the positive side of the client, possibly the many safety checks it puts into place before a car is put into a showroom, in this case.
While the companies in question could not have foreseen such a crisis, it is always better for PR agencies to be equipped with a crisis management manual which lists all possible crisis situations. These can list out various people within the organisation who can be tapped into for quick dissemination of appropriate information, the channels of communication that need to be opened quickly and the processes that need to be followed in critical situations. Having the right spokesperson at the right place, at the right time can make the difference.
Even as corporate positioning and overall message determine the company's response channels - press releases, social media, direct media interactions - a company needs to be geared to monitor reactions as they come in and be prepared with responses. Additional interviews and statements can be kept on the standby, and the fire needs to be given a few days to die out. Another asset companies could bank on is the staff. While the top management should be visible prominently during the damage control mission, there's nothing like a viral spread of positive buzz about the company from employees on social media platforms when a crisis threatens to blow out of control.
"Communicating with internal stakeholders is critical"
COO (Domestic), Godfrey Phillips India
When a crisis hits, many CEOs/CMOs simply freeze. And if and when they do, they do so at their own peril. We live in a real-time world. The media, including the various digital platforms, takes a proactive role in highlighting and keeping issues alive. To think that the choice in times of a crisis is between keeping the media updated or stonewalling it is a completely wrong approach. The media has simply raised an issue. The approach should be using the media to effectively communicate with all the stakeholders in the business. One is reaching out to the ultimate consumer, the government bodies, citizen groups and so on.
Crisis management requires a multi-pronged approach. Reliance on advertising campaigns alone is not sufficient. Meetings with consumer groups, dialogue with the government departments involved is equally crucial. To be seen engaging at all levels and tackling the issue in a multidimensional manner, indicates the seriousness of the company's intent in doing the right thing and not just glossing over the matter.
Managing the crisis successfully externally is possible only when it has been addressed internally. That is to say, communicating with internal stakeholders is just as important as communicating with those external to the business. Employees, board members and shareholders are as affected by a crisis as they are involved in its resolution. But it is critical to recognise that the latter is possible only when the former is addressed. Once that is done, different departments within the organisation can be brought in to represent every stakeholders' voice at the table.
Every crisis differs in its magnitude and depth. There may not be a textbook approach to resolve it; each one needing a fairly hands-on approach. But there are surely certain steps that must be taken irrespective of the nature of the crisis. Aligning the interests of the stakeholders and bringing them to the table is one. The actual management of the fallout from a crisis begins with defining it first, understanding its possible impact and import and finally charting out a path to address it. There need to be definite processes in place for this. Splitting up in different teams, each with its own set of defined goals is the ideal approach. It is important to try and assess the consumer responses. Without this, there is no way of knowing the true impact of your corrective action.
Reacting to a crisis is a forced need of the hour. In an ideal world, you must take a step back. Keep your ears to the ground to be in step with the processes you are putting in place in the market and the stakeholder reaction to it.