The New World of Crisis Management

By Andrea Sachs

David Neeleman's weeklong media apology tour took the JetBlue CEO from the Today show to David Letterman to Anderson Cooper to beg forgiveness for the popular airline's Valentine's Day debacle. The company had stranded more than 100,000 travelers after bad weather decimated its operating ability--in one case JetBlue passengers were left on a snowed-in runway for more than nine hours. Neeleman's mea culpa reached its apogee with a series of full-page national-newspaper ads: "Words cannot express how truly sorry we are for the anxiety, frustration and inconvenience that you, your family, friends and colleagues experienced." Neeleman rolled out a Customer Bill of Rights soon after, promising to reimburse customers for future travel mishaps. By Feb. 20, the airline's operations and ticket sales were back on track.

Not a bad public relations comeback, right? Maybe to mollified customers, but to professional masters of disaster, who specialize in bailing out companies in crisis, JetBlue is emblematic of a new model of calamity, one that is instantly visible, viral and capable of inflicting business-busting damage. And one that demands a fresh kind of crisis-management approach. Will Yum! Brands, owner of KFC and Taco Bell, never cease to see clips of a rat-infested New York City store on YouTube? "Saying you're sorry might be O.K. for a love-story script, but it's not enough to assure consumers that they should continue using your product," says Mike Sitrick, who has advised such p.r.-challenged celebrities as Rush Limbaugh, Tommy Lee and Halle Berry. He gives JetBlue a B--. Eric Dezenhall, co-author of a new book on crisis management, gives Neeleman an A for taking responsibility for the mess but says JetBlue could have done better in helping the trapped passengers.

These tough critics are the "trauma surgeons of public relations," as Dezenhall puts it--the people whom companies call in when lawsuits, recalls, boycotts, federal investigations or just plain bad luck hits. "These unwanted events are our daily challenges," he writes in Damage Control: Why Everything You Know About Crisis Management Is Wrong. The field traces its recent roots to 1982, when seven people died from taking cyanide-laced Tylenol pills, and the manufacturer, Johnson & Johnson, quickly recalled 30 million bottles of Tylenol and introduced tamper-proof packaging. That storied recovery showed corporate America the power of getting it right in a crisis.

But 25 years later, crisis management is proving harder than ever. (Just ask Don Imus.) The biggest change comes from the demands of always-on news. Companies now have to sweat not only the morning's headlines but endless blog postings and runaway video clips that can (and do) appear 24 hours a day. Even when there isn't much new information, blogs can keep a crisis alive--and smart companies must pay as much attention to them as they do to the national media.

In the case of Menu Foods, the Canadian pet-food company whose products are at the center of a nationwide recall, Dezenhall says the company should be vigilant about informing the public about the source of the contaminated pet food. With frantic, emotional pet owners desperate for information, that means not waiting for the results of the government's investigation. In the absence of a definitive answer, veterinary and pet-owner blogs have been filled with theories, some of them bizarre, about the source of Menu Foods' tainted products.

The bad news is that in any recall "the public always assumes that the crisis is being mishandled, that the company is holding something from the public," Dezenhall says. "The reality is the company under siege may not know what's causing the problem." If it doesn't provide information, though, speculation and commentary fill the gap.

Sitrick says companies have to be aggressive about responding to bloggers, lest a minor controversy multiply into a major media scandal. Sitrick employs so-called truth squads in sensitive cases, who monitor blogs for items on clients and quickly counter any false rumors.

From a corporate point of view, the world has become more difficult because almost no crisis is just a local issue. Coca-Cola learned that lesson in 1999, says Dezenhall, when several Belgian children reportedly were sickened after drinking the soft drink. Soon afterward, similar reports appeared in France and other European countries. Coke responded slowly, he says, and underestimated how quickly Europe's simmering anti-Americanism would snowball into a p.r. disaster. "When outrage takes over, there is no emotion more powerful than the urge to place blame," Dezenhall says. "Coke found itself the beneficiary of an entire continent's wrath for a nonlethal problem."

With so many variables, how can a company prepare? Crisis cowboys force them to think about the unthinkable. "Whether you're a school with a lot of young students or an airline with lots of people traveling, you know that there are 10 things that could happen to you," says Paul Argenti, a Dartmouth professor who advises major investment banks on crisis p.r. "Think about them ahead of time, and how you would deal with them." Argenti says JetBlue enjoyed a trouble-free ascent in the airline industry, leaving the company unprepared for this year's customer-service nightmare. "When you've had such a meteoric rise as an organization, these kind of things happen," Argenti says. "You're not prepared to deal with adversity."

This kind of hand-holding does not come cheap. In the middle of a crisis, companies pay consultants anywhere from $50,000 and up, depending on how long and how many people are deployed. A precrisis preparation session costs at least $25,000. Still, says Dezenhall, who has represented such companies as Procter & Gamble, ExxonMobil, Eli Lilly and GE, "the amount of money spent on crisis management is a drop in the bucket compared to what you might lose." Corporations routinely analyze how political risk or interest-rate risk might affect their bottom line. Argenti says the "reputational risk" of handling a crisis poorly should be part of the equation.

There might be little a p.r. consultant can do to erase the image of fat, happy rodents running around your restaurant. But trying to downplay the event is no longer possible. "You can't not do it," Argenti says about preparing for the worst. "You can't just say, we're going to be O.K."