Do You Still Think Crises Are Mere Consultants’ Creatures?

Do You Still Think Crises Are Mere Consultants’ Creatures?

Jul 28th, 2009

Well, all along our professional life of Risk and Crisis Management consultants and coaches we have been confronted with clients that expressed themselves with statements like: “well, you know, this kind of stuff only happens to others”, generally followed by “we are too small, … too large, too smart, too powerful”, etc.

Do You Still Think Crises Are Mere Consultants' Creatures

“History” of share value disaster in the aftermath of Boliden’s Los Frailes dam failure.

Relentlessly we have kept our stance: crises are foreseeable, crises can be as costly as a natural disaster or a major accident, the public IS THE JUDGE, and the sentences he delivers cannot be appealed etc.
Examples abound in our courses and our latest book, but the one that follows is exceptional for many aspects.

United Airlines Lose $180 Million due to YouTube Video

We learned about this crisis as everyone else, via the media. The media reporting in the morning news about how social media can seriously damage a brand.

The Story

Take a musician (Mr Dave Carroll, from Canada) going to a concert, who sees the airline ground crews manhandling his instrument (a beloved guitar) to its death (broken neck, fatal wound indeed).
Imagine other passengers witnessing the massacre under the indifferent look of totally uninterested flight crew zombies.
Mix to this an interminable series of communications between the victim and a ice cold airline management who refuses to take any responsibility.
Bad enough? Well, yes, for the victim, for sure; but the airline had no clue how bad things were going to turn for them!

You see, our victim-musician had the interesting idea to make a country tune (titled “United Breaks Guitars” by Dave Carroll ) out of his sad story, and such a nice one, complete with an amusing video, that it became an instant success on Youtube (appx 4million views as we speak).

The Results

United Airlines share price dropping by 10% (i.e. 180MUS$ loss, equivalent to over 50,000 replacement of the defunct guitar. I do not think any Court would have punished so harshly the airline, but this is the power of the public-JUDGE: exemplary punishements and NO APPEAL.

Conclusions

In the era of internet, social media and networks, there is no hiding, there is no mercy for the culprits. And in period of exacerbated sensitivity to poor corporate behavior, like amidst a recession, and in the aftermath of large scandals (Madoff, banks etc.), punishments are going to get tougher and tougher.

There used to be a saying that one happy customer would report to three other people, but an unhappy one would spell his story to seven. Well, welcome to the world where a bad story can be broadcasted or is echoed out to four million within days, and for free!

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Category: Crisis management, Risk analysis, Risk management

One response to “Do You Still Think Crises Are Mere Consultants’ Creatures?”

  1. […] risk” that ended up costing an arm and a leg to a famous US airline, please look at Post1 and Post2 Posted in Acceptability, Financial, Hazard, corporate, crisis, decision, management, […]

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