Communication strategies can be costly if CEOs don't get it right
14 min read
02 July 2015
The PR strategies taken by Thomas Cook and Merlin Entertainments – the company in charge of Alton Towers – have been notably different in the face of difficult situations involving both firms. There's a lot to be learnt from each method, not least the sometimes overlooked asset of compassion.
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.
— The Telegraph (@Telegraph) May 27, 2015
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.
On the flip side, another big company which also suffered a tragedy more recently is of course Alton Towers. The incident itself was a disaster – The Smiler rollercoaster is now at the centre of a major investigation after 16 people were trapped when two carriages were crashed, leaving four seriously injured, two of whom had to have a leg amputated.
The amusement park was closed for five days as an investigation into the crash took place. Another delicate situation, and one which could’ve severely damaged the park’s prospects had the senior team got the tone wrong, it was already reportedly losing £500,000 a day for each 24 hours the park remained closed and had seen almost £100m wiped from its value – with predictions forecasting it to lose millions in lost bookings.
In these situations the first thing to get right is having the correct senior person out immediately, and Nick Varney, CEO of Merlin Entertainments, the company which owns Alton Towers, was out to deal with the fall out as soon as word broke – both sincerely apologetic and compassionate. The company hand-delivered letters telling all victims to instruct a lawyer to submit a claim for compensation which would be dealt with “swiftly”. Again, the humanisation of a business is crucial here – being seen as more than the brand and actually having representatives providing caring responses can make all the difference.
In a now infamous interview with the formidable Kay Burley on Sky, Varney was a PR’s ideal spokesperson. He held his own and provided the correct responses to her grilling, even when talked over and pressed about the, at the time, unconfirmed reports about one of the victim’s amputation.
“With all due respect, to be telling you stuff like that…that is absolutely personal information to those individuals and their families,” he replied, managing to convey the sensitivity of the situation and prioritise the right people.
Varney has provided apologies where appropriate, a recommitment to addressing safety where it is not up to standard, while also drawing attention to “misreported” aspects of the story to reassure customers where possible. While CEOs will be heavily briefed ahead of taking the spotlight in a comms crisis, how lasting the damage is to the company brand can be entirely in that individual’s hands – particularly when it comes to media appearances.
Being dictated by media pressures is a sure route to disaster – to get to that point, the business has already stirred up ill-feeling and resentment among the public. Making hasty amends once the media latches onto its failings stirs up the matter again – and essentially serves as a roundabout non-apology while showing itself to be at fault in some way. This then leads to further coverage crowing that it’s all too little too late. Which it is.
Varney put it well when he said the company could not “undo the events of last week, but everyone in the company and at Alton Towers is determined to do all we can to provide appropriate support to those who were injured and their families”. The believability is the swing factor that could see a brand restored or irrevocably damaged, and Varney conveyed his commitment effectively.
It may take a while to build back loyalty from customers – a recent break down of the Air ride at Alton Towers may be viewed with more concern in light of these recent events – but the quick, entirely appropriate communications strategy throughout, has meant the public still believe in the Alton Towers brand, and more importantly, the people in charge of it.
The two examples are big companies and the incidents involved at the extreme scale of things going wrong, but the principles all businesses can learn from them remain the same.
Ensuring your main spokesperson is a good communicator is not something that should be downplayed – and if the time requires it, you can’t be slow to make sure the senior figures are fielding the big questions. Fobbing the responsibility off to a less senior person will have a knock-on effect in how people perceive you to be feeling about the situation. You’ve already effectively downgraded its importance as a matter to be dealt with.
Balancing legal matters and public perception can also be difficult if this is an incident which may be seen by the average person and discussed on social media. While ensuring you’re playing everything by the book is important, brand reputation can be severely hurt by how the typical person views your communication strategy.
When in doubt, taking a step back and viewing the situation as if you were a member of the public looking in, may help humanise you to the matter. If you’re in the wrong in some way, you don’t want to be the last person to say so.