Mitigating the Impact of a Crisis

The article, published by a highly credible news outlet, detailed serious allegations of misconduct throughout this corner of the company’s industry. There were claims of bribery, kickbacks and connections to organised crime. The central focus of the article was a handful of companies with overseas operations. But his company was the only US-based entity mentioned by name.

While the reporter had carefully couched every- thing as “allegations” and not “facts,” the clear takeaway was that all of the companies mentioned were connected to potentially unlawful activity.

The article would soon reverberate across the industry and would pose an existential threat because the company relied on ongoing access to financing, good relationships with foreign and domestic governments, and the continued trust of various critical business partners. As a result of this story, those relationships would be strained.

As he read line after concerning line, texts from colleagues started to come in, raising the internal alarm about the story. Soon, a calendar invite arrived for an executive leadership team call at 10pm. It mentioned that additional media outlets were inquiring about the allegations. The crisis was just starting. The situation was evolving fast.

The initial news alert was just the beginning of a negative news cycle and, with no current plan to immediately mitigate the damage, the media coverage was likely to get worse.

Less than a day later, as the crisis mounted, it became clear the impact could have been avoid- ed or at least mitigated. It turns out that a month earlier, the company’s outside communications team had flagged a media inquiry from this news outlet. However, it was the company’s custom- ary policy to avoid commenting in mainstream or business press. Afterall, the company believed, there was often very little upside to engaging with media outside of the trade publications with which it had longstanding relationships. So, while the inquiry was flagged, the decision was made at the time to not return the reporter’s call.

Additionally, a review of social media chatter in the months leading up to the article would have identified an escalating series of rumours and innuendo, all with negative themes that were ulti- mately captured in the initial news report. And, a review of traditional media a year earlier would have revealed that a newly elected government official in a foreign country made comments criti- cal of the industry. While local press covered the comments, they were not picked up in interna- tional media. Yet, this commentary was easily found through a simple Google search.

Blind to these warning signs, there was no appreciation for how bad the situation could get or how quickly it could spiral out of control once a story appeared.

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