CrisisResponsePro’s Worst- and Best-Handled Crisis Communications of 2016
CrisisResponsePro today unveils its second-annual list of the worst- and best-handled crisis communications. CrisisResponsePro tracks and evaluates the communications aspects of thousands of crises throughout the year through its Knowledge Exchange content area, CrisisWire, and database of more than 10,000 public statements by individuals, companies, and other organizations. The list is based on analysis of high-profile crisis matters in 2016 measured against CrisisResponsePro’s knowledge base of best practices in crisis communications.
“Without a doubt, Wells Fargo’s handling of its fake-accounts crisis takes the prize as the worst of the year — just botched from beginning to end,” said Jim Haggerty, founder and CEO of CrisisResponsePro. “On the other hand, Gretchen Carlson’s litigation communications surrounding her lawsuit against Roger Ailes was a textbook example of effectively controlling the public message during litigation.”
Haggerty added: “Overall, we believe that individuals and organizations are quickly learning that in this age of Twitter, Facebook, and SnapChat, effective communications can mean the difference between a crisis that is controlled and one that controls you.”
THE TOP FIVE WORST
- Wells Fargo (fake-accounts scandal)
After Wells Fargo admitted in September that employees had set up about 2 million fake customer accounts to reach sales goals, the bank couldn’t have handled the crisis any worse than it did. Its biggest problem was a simple one: Its response was perceived as dishonest. Connected to that: It couldn’t get its story straight. Third, it didn’t take the problem seriously enough at first. It tried to pawn it off on the 5,300 employees it fired over the years, allegedly for setting up the fake accounts (but at least some for refusing to be unethical). Wells Fargo said it wasn’t its highly charged culture that gave rise to the behavior, but then it nixed the sales goals that created that culture. No heads rolled until CEO John Stumpf finally resigned. And the saga continues: Customers are suing over the scandal and Wells Fargo — because its reputation isn’t yet completely in tatters — wants to force them into arbitration.
- Samsung (Galaxy Note7 recall)
Samsung’s communication around the recall and then renunciation of its Galaxy Note7 phone was almost as pathetic as the substance of the incident. When it got reports of the phone catching fire, it issued an “unofficial recall,” blaming the batteries. Then the U.S. Consumer Product Safety Commission decided an official recall was required. Less than two weeks later, the company put out a release touting the success of the recall. Except that the replacement phones exploded too. Finally, Samsung stopped sales altogether. Its communication resulted only in confusion. It clearly didn’t coordinate with the CPSC. It wrongly told Hong Kong customers their phones weren’t affected. While Samsung was rightly lauded for pulling the product altogether, its lax communication effort was widely, and just as rightly, criticized.
- Theranos (regulatory scandal)
Blood-testing company Theranos’s woes began back in October 2015 when The Wall Street Journal questioned its technology. Theranos kept pushing back as the Journal kept coming up with more unflattering information. Things only worsened this year. The company maintained its defiant, belligerent tone, though its attacks on the Journal dwindled as the truth of the reporting became clear. Then things spun out of control. Regulators banned its founder, Elizabeth Holmes, from owning or operating a lab for two years. The company’s Newark, California, lab had its certification revoked and the feds won’t let it take Medicare or Medicaid payments. Theranos hasn’t been able to respond in any convincing way; its attempts at contrition have rung false. Its in-house spokesperson left, it has fired staff, and former partner Walgreens is now suing it.
- Ryan Lochte (Rio Olympics incident)
One of the big stories of the summer was U.S. swimmer Ryan Lochte’s claim that he and several teammates had been robbed at gunpoint during the Rio Olympics. It turned out they had engaged in some vandalism and were forced to pay for it. Lochte then went about concocting one of the worst apologies of the year: It took him five days, he did it on Instagram, he never actually owned up to his misdeed, and he tried to portray himself as a victim. Lochte paid the price: He lost sponsorships of at least $1 million a year, was banned from swimming for 10 months, and earlier this month turned down a plea deal with prosecutors in Brazil.
- Mylan (pricing controversy)
Mylan had been raising the price of its EpiPen epinephrine autoinjector for years. But in May, when it jacked it up to $609, almost 50 percent over the previous year’s price (it had been $100 in 2009), outrage ensued. None of Mylan’s attempts to quell the anger worked. At first, CEO Heather Bresch blamed the skyrocketing costs on a broken healthcare system. Mylan’s offer of financial assistance for some patients was immediately tagged as a public relations move. Bresch was hauled before Congress to testify. Her attempts to justify the pricing were met with bipartisan skepticism. Mylan settled with the feds over Medicaid rebates for EpiPen in October, but the spotlight, including a New York State probe, remains on the company.
Dishonorable mentions go to: Chipotle’s communication fatigue over its ongoing food-safety crisis, which it handled more energetically last year; ex-Baylor University President Ken Starr’s disastrous handling of a sex-assault scandal and his even more disastrous TV interview that his crisis counselor halted; and Yahoo’s lack of communication surrounding its massive data breach (which we now know affected 1 billion accounts).
THE TOP FIVE BEST
- Gretchen Carlson (sex-harassment lawsuit)
When former Fox News anchor Gretchen Carlson sued Fox CEO Roger Ailes for sex harassment on July 6, she most likely envisioned a drawn-out, hard-fought legal battle. Instead, only two weeks later, Ailes resigned from the company and then, two months after the filing, Fox (as his indemnifier) agreed to pay Carlson $20 million. This outcome was due in no small part to her team’s aggressive and impressive litigation communications. Carlson, untypically in these situations, responded to every statement the other side made. She or her lawyers spoke out when they filed the suit, when Ailes’s lawyers publicly responded to it, and when the defense lawyers said the case belonged in arbitration. Instead of ignoring the court of public opinion, Carlson embraced it and used it to her advantage. She even got Fox to apologize to her — a lawsuit-settlement rarity.
- Apple (San Bernardino shootings)
In February, Apple Inc. was faced with a tough challenge when it needed to explain to customers why it was opposing a court order that it help the government hack into an iPhone owned by one of the attackers in December’s San Bernardino shootings. On Feb. 16 — the same day prosecutors made the order request and a magistrate granted it — CEO Tim Cook released a message explaining how important it was for its iPhone and other customers to feel their personal information is secure. Cook expressed respect for the investigation and the victims. The incident’s backdrop was the ongoing public debate between privacy and the government’s need to combat terrorist attacks. Other tech companies rallied around Apple on the issue. In March, the FBI was able to unlock the phone on its own and the matter was dropped.
- Spectra Energy (pipeline explosion)
When Houston-based natural-gas company Spectra Energy Corp. experienced an explosion at one of its pipelines in Pennsylvania in April, it responded with an almost textbook example of how to communicate an event or accident crisis. The company consistently updated its stakeholders and hit (almost) all the right notes. It issued four statements on the day of the accident alone. It expressed real sympathy for victims and thanked first responders. It kept stakeholders, including neighbors, apprised of remedial efforts. The updates were still coming almost a month after the accident.
- Maria Sharapova (failed drug test)
Russian tennis pro Maria Sharapova got in front of the crisis-communications ball after she failed a drug test. Instead of waiting for the International Tennis Federation to announce the results, on March 7 she held a press conference in Los Angeles and didn’t rely on a lawyer to do her talking. She sat in front of a roomful of reporters and admitted she had tested positive for the drug meldonium at the Australian Open in January. Yes, her explanation for how it happened met with some skepticism, but she was forthright in her subdued comments, unwavering in taking the blame. Some observers called it a “textbook apology.” She faced a possible four-year suspension; she ended up with 15 months.
- Harvard University (men’s soccer team incident)
In November, Harvard suspended its entire men’s soccer team after the school newspaper, The Harvard Crimson, reported that its members compiled a “scouting report” in which they rated new players for the women’s soccer team according to their sex appeal. The comments were often vulgar. It blew up into a major story. An investigation ensued, in which the team members were reluctant to participate. The school’s forceful punishment meant the team’s season was over, even though it led the Ivy League. President Drew Faust said the punishment “reflects Harvard’s view that both the team’s behavior and the failure to be forthcoming when initially questioned are completely unacceptable.”
Honorable mentions go to: Facebook for its good initial response to accusations that it discriminates against conservatives in its “Trending” news section; Texas’s Miracle Mattress for its sincere response to the uproar after it ran an insensitive 9/11 promotion; and Wendy’s for keeping customers informed about its data breach.
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