The Good, the Bad and the Ugly of crisis management: Part 1

In case you haven’t noticed from our Weekly Dose of #PRfail, PR+Ruse loves a good PR fail.

Not only are they supremely entertaining to follow, but they serve as great learning tools for PR pros who are bound to have at least one mishap over the length of their careers. In the spirit of learning lessons, we give you a three part PR fail series: the Good, the Bad and the Ugly of crisis management.

Texaco logo

The Good: Texaco, 1995

Situation Analysis

After only four months on the job, Texaco CEO Peter I. Bijur was forced to respond to a major corporate crisis when the New York Times released an article describing a recorded conversation between Texaco executives. The conversation centered on destroying incriminating evidence in a racial discrimination lawsuit filed against the company by 1,400 former employees. The executives were also heard making racially charged comments regarding minorities.

Boycotts against the company were immediately instituted.

Strengths

The response to the crisis was immediate.

Daily meetings were scheduled between the executive and the company’s communications, human resources and legal departments. Bijur quickly took on the role of spokesperson for the crisis, issuing a public apology for the comments made by his employees and expressing his embarrassment.

The executives partaking in the conversation were swiftly suspended, with pay but without benefits. The staff member who recorded the conversation was also suspended for being part of the conversation, showing that the comments in question were inexcusable regardless of the persons involved.

Texaco executives visited its various branches to personally apologize to staff members and customers. Public and continuous apologies were instrumental in expressing a feeling of sincere remorse for the racial comments. High visibility by company executives was also an excellent tactic as it showed that the company was willing to personally respond to employee concerns.

The lawsuit was quickly settled at $176 million.

The company hired an African-American owned advertizing agency to run a campaign highlighting Texaco’s new measures against racial discrimination.

Weaknesses

Companies often face flack when suspending offending employees with pay, as it seems like a mere slap on the wrist for their offences.  However, the guilty parties were fired following an investigation.

The public apology given by Bijur was criticized for blaming the company as whole, rather than placing the blame squarely on the shoulders of those directly responsible. While this blame could have positioned Texaco as having a discriminatory culture, it also had the effect of showing a unified front against the allegations. It gave off the sense that no one in the company would be exempt from checks against discriminatory practices.

Opportunities

While a crisis of this kind (or really, any crisis) is undesirable at best, the issue provided Texaco with an opportunity to revise its internal policies and actions against racial discrimination.  Fortunately they did just that by creating a permanent policy for discrimination checks for all executive and management employees. Public anger greatly dissipated following the company’s response to the crisis.

Threats

At the time, the company was facing financial downturn due to an unrelated issue, and this crisis did nothing to curb the damage. Its financial issue had the potential to absorb the attention of the executive. Luckily it didn’t. Bijur and his active executives made the crisis their primary concern, taking proactive steps to stop the damage before it really took off.

Conclusion

Nothing is worse than being caught red-handed in a crisis. With nowhere to hide, Texaco put itself in the spotlight with its sincere apologies and willingness for transparency, and made itself a success story in crisis management.

Agree or disagree with the analysis? Sounds off in the comments!

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