Communication strategies can be costly if CEOs don’t get it right

The good thing about having extensive media coverage of big companies is that they can provide lessons in what to do and what not to do – a play-by-play of where communications strategies can spiral quickly off track. It provides useful guidance for other businesses, both big and small.

Communications strategy is a vital element to both sustained reputation and brand longevity, and businesses should have it in mind as an ongoing concern – regularly reviewed and refreshed. Bigger companies may have more complex systems in place, with more emphasis on crisis comms, but it’s evident that a lot of the time they don’t get it right either.

Two widely discussed recent examples provide contrasting ways of dealing with company mistakes. The drawn-out Thomas Cook situation has stirred up extensive criticism. It’s an extreme example – two children died from carbon monoxide while on holiday with their father and his partner in 2006, and the conclusion of the inquest recently threw it back in the public eye. Thomas Cook was cleared of responsibility at a Greek criminal trial in 2010 and the inquest accepted it had been misled by the hotel involved, though it concluded Thomas Cook’s health and safety audit had been inadequate.

What stoked the public’s anger was the notable absence of an apology to the bereaved parents, along with the discovery that the travel company had received over £1m in compensation from the owner of the Corfu hotel, Louis Group. After that announcement was made, the travel firm said it had donated the £1.5m received to children’s organisation Unicef, stressing that the company hadn’t profited.

By that point however, the public was already feeling less than sympathetic. In a highly delicate situation, it was a case where Thomas Cook felt it had to toe the line – following guidance from lawyers and management in terms of how best to proceed.

At the same time, when a case like this hits public attention, a company’s reputation can be severely hampered by a perceived lack of care – particularly from those at the top. It’s tricky enough for senior management to maintain the balance of asserting their position as the spearhead figure leading a company, while leaving their door open so employees and clients see their ability to be aware and understanding too. Peter Fankhauser, CEO at Thomas Cook from November 2014, had told the inquest jury: “I feel so thoroughly, from the deepest of my heart, sorry, but there’s no need to apologise because there was no wrongdoing by Thomas Cook.”

It’s the veering on defensive that the public often react badly too – and indeed, the children’s mother said the company should have apologised at the inquest. A letter of apology from Fankhauser lost its value when the first the parents heard about it was via reporters. They said in a statement: “We haven’t had this so called letter of apology. It’s not an apology for their wrongdoing but a general offer of sympathy. It does not address the central issue that their Safety Management System failed and it does not apologise for that.”

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Former editor of News of the World Phil Hall, who founded PR firm PHA Media, said the issue was that Thomas Cook had been “looking at the legal point and not the man on the street’s point – and its core customers will not be lawyers, but the man on the street”. Humility can go a long way with customers when exercised in the appropriate circumstances.

It has been exacerbated by the response of former chief executive Harriet Green, who had been repeatedly criticised by the grieving family for failing to meet them during her two years at the company and not apologising for the tragedy. Green was hired six years after the incident and left the company before the inquest but had been looked upon negatively for her lack of response and the upcoming bonus she was due to receive. Following criticism of her behaviour in the press, she offered to pay a third of her bonus to charity – the children’s mother said it was “abhorrent” for Green to attach the donation to the memory of her children after the company’s handling of everything.

It was recently announced that Green was paid the entirety of her £5.6m bonus entitlement, with Green saying she will honour her previous pledge to donate a third of the figure, £1.9m, to charities agreed by the parents. Thomas Cook said “a substantial donation” would go towards a carbon monoxide charity to fund research into protection from the gas and the parents had been satisfied with the outcome. While the money should go a significant way in helping the charity, Thomas Cook had totally scuppered public trust and appeal by then.

Perhaps even more bizarrely, Green bore the brunt of public criticism – yet the former chief executive who was in charge of the travel company at the time, Manny Fontenla-Novoa, the company’s current chairman, who has been in the position since 2011, escaped without much scrutiny. Meysman is still chairman.

Either way, the outcome has been serious brand damage – an ongoing reputation disaster as the refusal to apologise, a decision surely made by legal directors and advisors, took precedence over providing a humanised response. You only need to take a look at the response on social media as this panned out to see that the general public – from which Thomas Cook will get most of its customers – was horrified, with many stating outright they would not be using the company again. It’s a long way back from this point.

Read on to find out how the owners of Alton Towers handled a tragedy well. Alton Towers accident 2018

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