INDUSTRY: PUBLIC RELATIONS
Crisis Communications Management
President, Gallagher 20/20 Consulting
By Tim Gallagher
The nation’s largest maker of implanted heart devices, Medtronic, said yesterday that it was urging doctors to stop using a crucial component because it was prone to a defect that has apparently been linked to five deaths and has malfunctioned in hundreds of patients.
The New York Times, Oct. 15, 2007
Medtronic reported a surprising 59 percent boost in second-quarter profit Tuesday, as increased sales of implantable heart devices defied reports of weakening demand from competitors.
The Associated Press, Nov. 24, 2009
At first glance, these two paragraphs might not seem to make sense. If you tell the world there is something wrong with the product you make or the service you offer, you can expect to go out of business soon, right? Wrong.
In crisis management for business and people, the most important lesson is to tell the truth, as much of the whole truth as you know, and as quickly as possible. Tell it loudly and use all of the media tools available. The public, the prosecutors, and the pundits forgive your mistakes quickly if you practice transparency.
Those companies or individuals who deny culpability or conceal the truth pay an added penalty in the court of law and the court of public opinion when the truth finally comes out. Think Enron.
Now think Medtronic. In the case cited at the beginning of this article, the natural inclination for Medtronic might have been to delay, to hide the “bad news,” to blame someone else, to deny the test results, etc. Anything but accept responsibility. Following the “delay, deny, and blame” strategy might buy you some time if you have a problem. But reporters (even the dwindling few in the news media these days) and SEC regulators have a way of eventually getting to the facts. It is one thing to make an error in business. It is another to know about the error and lie.
Telling your story honestly – even if you made a mistake – pays off in a shorter news cycle for your bad news. Look at Toyota. Sales are already beginning to bounce back after some of the worst publicity any company has ever received.
I recently helped a small business owner whose momentary mistake with a former employee had the potential to destroy her family business.
She had terminated an employee who decided to take some company merchandise in lieu of a final paycheck. But the merchandise was worth a lot more than the check. The business owner went to the former employee’s home to reclaim the goods. What happened next? Law enforcement was called in and the business owner was arrested. The former employee called inspectors to investigate the business before going on an Internet rampage, anonymously slandering the business. Sales tanked.
Every time someone Googled the company, more than half of the search returns showed the former employee’s rants.
I was called in to help with the crisis management for the business.
My first advice to the business owner was to admit the mistake. It was foolish to go to the employee’s home.
Second bit of advice: Tell the story of the business in a positive and truthful light.
Third lesson: Fight fire with fire. We began an Internet campaign of our own, finding customers of the business who liked the company and would write their own Web reviews of the business. We posted YouTube videos of the company in action. Soon, the Google search returns showed them in a positive light.
We gave interviews to the media while also writing an op-ed piece giving our side of the story while convincing the inspectors to tell the press that they found the business exceptionally well-run when they made their surprise visits. And it really helped when the criminal charges were dismissed in a trial covered by the media.
We were open and aggressive and used the traditional media as well as the social media available to us.
Today, sales are starting to return to pre-crisis levels.
Whether you are a large company, such as Medtronic, or a small company, such as my client, the rules are the same. Tell the truth and tell it quickly. Hunker down and take your lumps. As the Bible says, “This, too, shall pass.” It just passes a lot more quickly when you tell the truth.
