A Crisis Made for Facebook

By DirectorCorps

October 29, 2019 All Industries

Facebook has become the perfect example of a company in crisis.

In the words of Chairman and CEO Mark Zuckerberg, the company is facing an “existential” threat from Democratic presidential candidate and Massachusetts Sen. Elizabeth Warren, who wants to break up technology companies. Several agencies in the United States also are engaged in multiple investigations of the company for anti-competitive behavior and privacy concerns. The company has come under scrutiny in European courts and countries.

Facebook also changed the way companies approach crisis communications, prior to its own mishaps. Social media giants, including Facebook, are speeding up expectations for information and transforming the way firms handle a crisis.

Public relations departments globally now monitor social media, including Facebook-owned Instagram, for content that may harm their reputations. Customers walk around with cameras inside their phones, ready to record and disseminate embarrassing or horrifying images.

One example was when Chicago Department of Aviation officers dragged a bloodied, ticketed passenger off an overbooked United flight in 2017 after he refused to give up his seat. The image was captured by fellow passengers, who shared it on social media.

United Airlines’ CEO Oscar Munoz apologized in a public statement using the phrase “having to re-accommodate…customers.” The phrasing became a social media phenomenon of its own, with hashtags such as #NewUnitedAirlinesMottos that prompted the public to come up with their own disastrous mottos.

As Munoz’ misstep showed, executives have almost no time to react when a crisis hits. Davia Temin, the president and CEO of boutique consultancy Temin and Company, says executives have about 15 minutes to react. “You have to say the exact right things, at the exact right moment with the right strategy behind you.”

Temin says there’s a lot of free-floating anger in the world that will attach to anything that happens. She has seven 30” screens on her desk, which she uses to monitor social media. “There’s no playbook anymore,” she says.

The textbook case on how to manage a crisis is Johnson & Johnson’s response nearly 40 years ago when a still-unknown individual laced Tylenol pills with cyanide, leading to the deaths of seven people in the Chicago area. The company recalled all its products, but it took three days to make that decision. In today’s world, “you wouldn’t have a company left” if you took that long to respond, Temin says.

The world has sped up, but that doesn’t mean companies should abandon planning. Temin says planning is critical. Trained employees can act out simulations of actual crisis, modifying statements and templates as the details of any event will differ.

Rhonda Barnat, managing director of strategic communications firm Abernathy MacGregor in New York, has a slightly different take on crisis in the age of social media. “In reality, for sensitive issues, there can be better ways to manage than rushing into social media,” she says.

The modern world pressures companies to respond quickly. But it’s just as important to respond well and not expose the firm to mistakes when executives address the crisis, as happened to United Airlines’ Munoz. Off-the-cuff remarks often get executives in trouble, as evidenced by BP plc’s CEO Tony Hayward, who said, “I want to get my life back” after the Deepwater Horizon oil rig explosion killed 11 people.

Barnat, who declined to comment about individual companies, said she often cautions executives to put their phones down and think. “Who is the person or people most impacted by the crisis? What’s the best way to communicate with them?” An angry person on a social media microblogging site such as Twitter doesn’t always have a stake in the issue. It’s important that executives assess who matters most before taking the next step in communications.

Often, a company can deal with a crisis by reaching out directly to those most impacted. “It is better to look inside a situation and put in place a unique mechanism to find out what the issues are, rather than rush to say something to the world at-large,” Barnat says.

Of course, the BP oil spill and Facebook’s crises involve many more stakeholders than a few customers. Their response, as well as other companies that encounter crisis, will have to be strategic. There are regulators, customers, shareholders, foreign governments and nonprofit groups who expect their concerns to be met. Whatever happens, Facebook and other data-dependent companies will see their businesses evolve as regulators and customers demand changes. They must stay on top of the crisis, to ensure their company survives.

Barnat says the central questions for executives must be: “How do I tell the truth? And how will I be believed?”