This week Charlie discusses how crisis management can go wrong when not handled correctly.
Occasionally in the news you hear a story and wonder how the organisation can get it so wrong when the solution seems so obvious. Thomas Cook’s handling of the deaths of Robert and Christianne Shepherd nine years ago is an example of a company which got its crisis management very, very wrong and caused major damage to its brand and reputation. The simple solution was for the company’s CEO to apologise sincerely to the family and accept responsibility for the deaths of the two children. It has taken them nine years to eventually agree to do this and within the last couple of days the CEO has been on television apologising to the family saying he would also be doing this face to face in private.
The cause of the death of the two children, which also almost caused the death of the parents, was carbon monoxide poisoning from a faulty boiler in their holiday apartment in Corfu.
It is interesting that Thomas Cook didn’t own the apartments themselves but they were owned by a third party. So although the customers were Thomas Cook’s, the people responsible for the maintenance of the boiler were a third party. Whenever I am training I always point out ‘you can outsource the activity but not the risk’. Thomas Cook’s health and safety procedures were found to be inadequate and they had not spotted the faulty boiler. So the actual organisation, which caused the death of the children, wasn’t Thomas Cook.
As far as I can see all the family wanted was for Thomas Cook to admit responsibility for the deaths and to apologise. They weren’t looking for a multi-million pound settlement or for people to get long prison terms but a simple sincere apology was what was required. You often read in the newspapers about similar cases where there has been negligence which causes a death. The family would like to know why their loved one died and the person responsible to admit their mistake, look them in the eye and apologise. What you end up with instead is a multi-million pound court case which drags on for years, the victim is forgotten and the family is unable to move on. When the case is finally settled, the only person who seems to come out well is the lawyer who has made large fees out of it. Even if the family does eventually get some kind of settlement either an apology or a financial settlement, they feel the apology is made under duress and the money is ‘blood money’ and won’t bring their loved one back.
This particular case has been made worse by the recent handling of the event by Thomas Cook. It has come out during the recent court cases that Thomas Cook were given £3.9m by the company which owned the apartments but gave a much smaller compensation payment to the family. They decided to donate £1.5m of the settlement to charity without consulting the family and the CEO was quoted as saying ‘it was not Thomas Cook's fault’ in Court. Once you are in the spotlight during a reputation crisis, you have to be hyper sensitive about every action you carry out, to see if it could make the situation worse.
How much better would it have been if soon after the event Thomas Cook apologised to the family face to face and paid substantial compensation. The loss of reputation and the money spent would then pale into insignificance compared with the money they have now spent and the damage to their reputation.
I recently listened to an excellent podcast with Agnes Day speaking to David Carroll. United Airlines broke David’s Taylor Guitar during a flight and after spending nine months trying to get compensation from the company, wrote the song ‘United Breaks Guitars’
which went viral with millions of hits on YouTube. In the interview he said that the eventual cost to the company could have been as much as $180m in loss of share price. If the company had bought him a new guitar straight away they would have saved themselves massive amounts of money. Bad things happen, we are human, we make mistakes from a serving a bad meal to failing to maintain a boiler and causing the death of two children. In the end it is how we handle our response to these incidents that makes all the difference.
If you are making an apology remember the 4 R’s:
- Responsibility- where the person or organisation takes complete responsibility for the offense or misdeed
- Remorse - where they actually say sorry
- Restitution - where they identify the steps they'll take to reverse the damage
- Repetition - where they will stress they will not repeat the offense