Crisis Management

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Most of the time, it’s inevitable. Once (or maybe more, hopefully not at all but you know, things happen), a company will have a few issues and sometimes, a crisis.

Firstly, what is a crisis?

‘A crisis is any event that is either going or is expected to lead to an unstable and dangerous situation affecting an individual, group, community, or whole society.’

(Wikipedia 2017)

But, what is a crisis in public relation terms?

‘A crisis is the perception of an unpredictable event that threatens important expectancies of stakeholders related to health, safety, environmental and economic issues and can seriously impact and organisations performance and generate negative outcomes.

(Coombs 2014)

Why is crisis management so important?

‘Crisis management is a critical organisational function.  Failure can result in serious harm to stakeholders, losses for an organisation, or end its very existence.  Public relations practitioners are an integral part of crisis management teams.’

(Coombs 2007)

The impact of a crisis on a company/organisation can include:

  • The collapse of the organisation;
  • The loss of revenue, profit and a loss of staff; and
  • The credibility of the company.

It is important than in an event of a crisis, that a company/organisation have a Crisis Communciation Plan. Embedded in this plan is a process in which companies/organisations need in order to be prepared for a crisis – as majority of the time, crises are unpredictable. As it is never efficient to plan for a crisis, whilst it is happening, time is crucial factor when it comes to reacting to crises. Most PR departments will have their own type of Crisis Communication Plans, but here is great example of one created by the Digital Training Institute, which you can find here.

Let’s take a famous case, the Johnson & Johnson Tylenol Crisis. In 1982, Tylenol was the most popular over-the-counter pain killer for Americans.  In October 1982, seven people were reported to have died after taking extra-strength Tylenol. It was later found that the capsules were laced with cyanide, which is a deadly poison.

Once J&J found out, they quickly responded. The company issued public announcements, warning people away from the product, recalling 32 million bottles of Tylenol at a cost of $100 million dollars, established relationships with authorities such as the FBI and Chicago Police Department to help find whoever was responsible for the killings, and were the first company ever to introduce triple-seal, tamper-resistant packaging. They also issued consumers $2.50 coupons as compensation for when they threw out their Tylenol pills to purchase new ones which were eventually restocked.

Due to the quick actions and handling of the situation by CEO of Johnson & Johnson (at the time), James E. Burke and his executives, this crisis has been said to be one of the best corporate responses to a crisis.

J&J were able to restock Tylenol on the shelves. Despite the skepticism of never being able to rebuild any reputation, Tylenol regained 30% of the market and became the top selling pain killer, once again.

Alan Hilburg, President and CEO of HilburgAssociates, who led the Johnson & Johnson team in the textbook management of the Tylenol crisis, explains the crisis management that J&J put into place at the time below.

Buzzfeed Blue created a video about the Tylenol crisis which you can watch below.

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