Tag Archives: Crisis Communications

United Airlines & Sean Spicer — Two Case Studies in Crisis Communications

28 Apr

 Crisis Comm Title Grapihcs.002    United Airlines and the White House are among the world’s most powerful brands and both recently gave divergent examples in managing crisis communication.  Within a 24-hour span, one had to foam the runaway for a public relations crash landing, while the other managed to grab the stick in a mid-air tailspin and get back on course.  Together, both United Airlines and White House Press Secretary Sean Spicer offer unique case studies on how to manage and not manage a crisis.

    By its very definition, a crisis can happen at any moment.  And how organizations immediately respond and manage the messaging can make all the difference in either containing potential damage, or creating a contagion that spins out of control and causes severe damage to the brand and the business.  That’s exactly what happened on April 10th.

    When United flight attendants forcibly removed passenger Dr. David Dao from an overbooked flight 3411 in Chicago, it not only caused a scene, it caused severe social turbulence.  With the speed of a smartphone shutter button, the images and videos flew faster than non-stop flight on a clear day.

  As outrage virally spread on social media, United issued a tone deaf response apologizing only for having to “re-accomodate passengers.”  Spokesman Charlie Hobart told the New York Times, “We have a number of customers on board that aircraft, and they want to get to their destination on time and safely, and we want to work to get them there.”

    It took took two full days for United’s CEO Oscar Munoz to issue an outright apology and launch a communications strategy, but by then the damage was already spiraling out of control.  United’s stock price stalled like an airfoil.  Within five days United lost $1.15 billion in market capitalization. (Figure 1) That’s a steep price for forcibly removing passenger who refused to give up his seat for $1000 voucher.

UAL Stock Price.001

Figure 1

    Less than 24 hours after United’s crisis, White House spokesman Sean Spicer created his own self-inflicted PR wound.  In trying to frame the seriousness of Syria’s use of chemical weapons against its own people, he invoked Adolf Hitler.   At his daily press briefing on live television, Spicer said Hitler “didn’t even sink to using chemical weapons.”  Never mind that Hitler’s SS used chemical gases to exterminate Jews in Germany’s concentration camps during WWII.  The reaction was swift, incredulous, and furious.  The difference in Spicer’s crisis is in how me managed it.  Within an hour he not only issued an apology, he was on the air live with CNN’s Wolf Blitzer retracting his remarks and admitting he made a tremendous error in judgement.

     By owning his mistake and taking immediate action to correct the record and apologize, Mr. Spicer managed to deftly keep the story out of the next day’s news cycle.   As I’ve written in this forum before, there are established best practices for crisis communication:

  1. Cease and desist—stop doing what you’re doing.
  2. Apologize to those you’ve wronged—and mean it.
  3. Change your tactics.
  4. Communicate the change to employees and customers.
  5. Establish performance measures for how the change is working.

     Mr. Spicer followed the most important of these mantras in a mater of hours.  United’s Oscar Munoz took a week and a half to form a cohesive and strategic response that was finally posted on Facebook and communicated to its employees and customers.  The response issued a strong apology and pledged to customers to no longer force anyone out of their seats, and to reduce the amount of overbooked flights.  United’s attorneys also settled with Dr. Dao.  But the changes come only after United had already caused significant damage to its brand.

 

     What’s especially troubling for United is this incident completely destroys a unique brand equity that it has spent decades earning with its customers.   For years before its merger with Continental Airlines, United implored air travelers to “fly the friendly skies.”    It wasn’t just a marketing slogan, it was a brand promise.   When passengers flew with United, they expected something special–it was part of United’s ethos.  Many successful brands such as Johnson & Johnson have famously made their own brand promises part of their corporate culture.   Johnson & Johnson has a credo that dictates its core values in guiding everything from product development to employee relations and customer service.   In responding to the passenger incident, United’s customer service and communications team lost site of its historic brand promise to use as a guidepost.

    United may now be in the process of charting a customer service flight plan, but it took a disastrous grounding to make it happen.

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Strategic Crisis Communications – How Fairview Hospitals’ Chairman Gets It.

1 Jun

It seemed like such a simple idea.  Then the Attorney General weighed in.

Fairview Health Systems Chairman Michael Mooty appearing at U.S Senate hearing on payment collecting practices at Fairview hospitals.

The idea was a basic business proposition.  Get the customer to pay for the services they need before walking out the door.  But in this case the business is a hospital and the customer is sick.

It is under that scenario that Fairview Hospitals in 2010 hired Accretive Health to help it recover more money from patients.  In an era of health care where costs are up and margins are down, the hospital system’s sustainability was increasingly dependent upon securing payment for the care it provided.  The “Revenue Cycle Agreement” between Fairview and Accretive Health ushered in a new culture at Fairview that often times focused on payment before care.

Minnesota Attorney General Lori Swanson

That’s where Attorney General Lori Swanson cried foul.  Her compliance review of Fairview’s contract with Accretive Health released on April 24th uncovered six volumes of alleged abuses and violations of federal law.  The evidence included internal Accretive Health emails that revealed how the aggressive bill collecting tactics led to some patients leaving the hospital in disgust before seeing a doctor.  In one affidavit, an employee describes how they were forced to obtain payments from patients in the emergency room or they would be fired. (Figure 1)

Figure 1 – Affidavit from MN Attorney General’s compliance review of Fairview hospitals and Accretive Health.

In almost every respect, it is another contemporary case study of an organization losing site of its core values and mission—in this case, the commitment to always put patient care first.

It’s perhaps fair to say that Fairview board chairman Charles Mooty never wanted to become the subject of such a case study.  But Mooty deserves some notice for his handling of the crisis and his attempt to take corrective action.

There are several hard and fast rules to effective strategic crisis management and communications:

  1. Cease and desist—stop doing what you’re doing.
  2. Apologize to those you’ve wronged—and mean it.
  3. Change your tactics.
  4. Communicate the change to employees and customers.
  5. Establish performance measures for how the change is working.

In a congressional investigative hearing this week, Chairman Mooty followed the script with near precision.  While testifying in a field hearing before U.S. Senator Al Franken, Mooty offered both contrition and a plan for moving forward. Here’s his very strategic response:

1. Cease and desist.

“We’ve stopped collecting past due balances and co-insurance payments in emergency departments, and we’re reviewing emergency department information and workflow processes.”

 “Fairview terminated its work with Medical Financial Solutions, a part of Accretive Health on January 6 of 2012 because of their failure to comply with the Attorney General’s billing and collection agreement.”

 2. Apologize.

“To those patients I offer my personal apology and firm commitment on behalf of the entire Fairview organization to regain your trust.”

3. Change tactics.

“We are reviewing and revising our training tools to ensure each patient interaction reflects Fairview’s core values.” 

 4. Communicate change.

“In addition to our termination of agreements with Accretive Health, we also have initiated better approaches for escalating patient, employee and physician concerns so that they receive prompt attention.”

 This last statement by Mooty perhaps telegraphs what may have been an critically important breakdown within Fairview.  Mooty told the Senate hearing no less than four times that Fairview was going to do a better job of listening to its stakeholders.  Attorney General Swanson’s investigation provided several documents that Fairview doctors and staff had expressed deep concern about the new payment collecting policies instituted by Accretive Health.  Mooty’s testimony strongly signals that those concerns either didn’t get communicated to Fairview leadership, or that leadership simply wasn’t listening.

One of Mooty’s most important changes came during the week before the Senate hearing when he and the board of directors decided not to renew the contract of current Fairview CEO Mark Eustis, the man who hired Accretive Health.  The board named Mooty as interim CEO sending a clear signal that it was breaking with the past.

While Mooty gave no clear indication of how Fairview intends to measure its progress, he clearly used a big stage to send key strategic messages to several key audiences, among them his patients, employees and the public.  But in this case his primary audience is government regulators.  If Mooty can’t convince them that he’s prescribed the right medicine, a more rigorous regimen will be forced from outside rather than inside.

The stakes are high.  So is Fairview’s credibility and trust.

PR Failure: When Good Brands Like Applebee’s Refuse To Join The Conversation About Bad News

1 Oct

            Mistakes come in all packages.  This one comes on a 5 x 11” piece of paper.

            The slick color direct mailer went out to 10,000 customers with a nice $5 coupon.  The mailer trumpets a newly remodeled Applebee’s in Maple Grove, MN.  Any marketing executive would tell you it’s a great and efficient “activation” driver to bring lapsed users into the restaurant.  Tragically, the headline on the back of the mailer launches another driver: Buzz.  And this buzz is not good.

            Here’s the headline:  “REDISCOVER YOUR WHITE MAPLE GROVE APPLEBEE’S!”

Applebee's Mailer

            It speaks for itself.  Applebee’s did not.

            Several irritated viewers contacted us about the mailer wondering how could the neighborhood restaurant be so insensitive?  It turns out it was a printing
mistake.   Similar mailers were created earlier in the year for the reopening of the Applebee’s in White Bear Lake, MN.  Applebee’s believes the printer didn’t quite
interchange all of the words.

            When Fox 9 contacted the corporate spokeswoman, there was no apology and little explanation.  My colleague Erik Runge, a good and seasoned reporter, was stunned.  He inquired about getting an interview from someone at Applebee’s explaining the error and was denied.  He then asked about getting a written statement and again—denied.

            There are some basic rules about crisis management.  One of them is get ahead of the discussion.  But the most important rule is to become a part of the discussion.  Applebee’s corporate silence is equivalent to sticking its head in the sand.   By not becoming a part of the narrative, they let everyone else—including their customers and the media—create the narrative for them.  Once that happens, they have lost control of their brand.

             Those of us who are Applebee’s customers know it as a good neighborhood restaurant chain with great service.  The tragedy is it’s painfully obvious that the spokeswoman in the corporate office is not committed to the brand or its soul.

            She needs to be force-fed some PR soul food.  And then she needs to be fired.

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