Another month another massive reputation disaster by a major corporation.  Most of the UK and increasingly the US and Europe have been closely following the ongoing drama of the phone hacking scandal that has blighted News Corp over the past month (although it’s been simmering for a lot longer). It’s the stuff of Communicators nightmares and is only spreading as investigations and revelations continue.

So where did News Corp go wrong in their handling of the crisis?

1. The belief they could contain the crisis: Many analysts, and indeed Rupert Murdoch himself, believed that shutting down the News of the World (NoTW) would  limit the damage. As it only represented 1% of News Corp it seemed a worthy sacrifice.  They were wrong. Circulation of News International’s other titles (The Times and The Sun) have been at an all time low; the share price of News Corp has fallen by almost 20% since the scandal started meaning billions of dollars have been wiped off the company’s market value.

2. Leadership failure to take responsibility: Rupert Murdoch IS News Corp and its brands to the public– they were immediately looking to him for a response. He shunned accountability by saying that he could not possibly know what goes on in an invidvidual paper – a comment that made him and News International CEO Rebekah Brooks seem like either incompetent leaders or just acting in their own self interests. Angry staff even recorded and leaked her speech to Sky News.

3. Lack of a credible spokesperson: Initially the media spokesperson, Simon Greenberg, was left to handle the media alone, giving the impression that leadership weren’t taking the issue seriously themselves. He couldn’t respond directly to difficult questions being thrown at him, particularly when public sentiment suddenly turned viciously against them in light of the Milly Dowler and London bombing victim revelations.

There is nothing like having faced a crisis to understand what you would do differently next time. I’ve outlined below a few of the lessons we’ve learnt from speaking to companies across our network:

Lesson #1: Have a clear system for escalating issues to, and partnering with, central – never underestimate the ability of a seemingly local issue to spread.  With most companies having multiple divisions and geographies it’s essential that they have a clear understanding of what and when to escalate issues so other parts of the business aren’t blindsided.  Check out our new framework for global/local partnerships that helps people on the ground figure out when they should handle things alone and when (and how) they should escalate

Lesson #2: Stay ahead of stakeholder sentiment – with the wave of public sentiment about a crisis changing all the time it is critical for companies to stay ahead of the game.  Traditional monitoring of the media will leave you constantly being reactive. An integrated system to monitor across all digital media will enable you listen from the stakeholders perspective and pre-empt reaction to statements.  Check out how Monsanto’s integrated monitoring that keeps them one step ahead.

Lesson #3: Ensure that leaders take reputational, as well as business, fallout into account – share stakeholder sentiment with business leaders to make sure they are taking reputational risks into account when both making business decisions and communicating more broadly. Check out our podcast series with Richard Woods at Capital One where he shares his template for Reputation Risk Reporting.

Lesson #4: Empower staff to speak on your behalf– one thing is for certain in a public crisis: your employees will be asked by everyone they know (and often now the press as they are so easy to find on Facebook) to dish the dirt and share the inside scoop of what is really happening. This is perfectly natural and can’t really be controlled. Your best bet is to make sure employees feel they know what is going on and explaining what steps are in place so that when asked they at least feel informed.  Check out how Monsanto enable employees to participate

We’d love to hear any other tips or lessons you’ve learnt in how to prepare for and handle a crisis once it hits. Share your ideas below or get in touch with our research team who are currently working on a project in this field

Related CEC Resources:

• Communicate About Challenging Issues Topic Center
• The 5 T’s of Responding to Online Criticism
• Integrate Your Listening Efforts
• Reputation Management Topic Center