There are lots of guides for businesses on how to respond to crises so the damage to their reputation is minised. Many of the steps are commonsense. Yet, as Toyota and BP show, even the best resourced companies make repeated bad decisions that cause crises to become PR disasters too. What is it that causes executives to repeatedly make the wrong calls? This article looks at the psychology behind decision-making and why it often fails under the intense media pressure generated by a crisis.

1. Why some companies turn a
crisis into a PR disaster ....
and how not to be one of them
Tim Prizeman of Kelso Consulting (www.kelsopr.com)
considers: why do organisations frequently mishandle
crises, often inflicting on themselves a PR disaster whose
damage is far greater than the initial problem?
The tactics for stopping a crisis becoming a PR disaster are well A crisis
known and have been extensively documented, so why do well- A sudden event that has the potential to in�ict long term
resourced companies with lots of bright people (like Toyota et al) �nancial harm on a business.
make such a disaster of it? Poor tactics may be the end result, but
such PR problems are often driven by underlying psychological A PR disaster
factors that lead to group-think, denial and disastrous management Mishandling the communication (often in the �rst few
decision-making under pressure. Overcoming these traits before a hours) so that the harm from the publicity generated by the
crisis develops is needed to ensure great PR tactics aren’t thwarted crisis is far greater than the event itself!
by your own organisation.
Toyota will go down in the annals of corporate communications build before they took on damaging proportions. Early action by
as a case study of how not to handle a crisis. There is a lot to learn management would have nipped them in the bud.
for businesses of all sizes from the way Toyota mishandled
its response to allegations of faulty accelerators. The question “how do you deal with a crisis and minimise adverse
coverage” is simple to answer – have a crisis response plan based
Many people assume that a crisis is something that appears out on a worse case scenario; have a crisis communication plan within
of the blue – and certainly businesses can be hit with seemingly it that will allow your business to immediately show concern and
unforeseeable events. However, what is foreseeable is the leadership as it deals with the crisis; rehearse them, and apply
probability of some sort of crisis – oil companies will inevitably a few other commonsense ingredients widely covered in the
have spillages; food companies will inevitably have product recalls; numerous books on the subject!
professional �rms will inevitably have their standards criticised;
and each year many businesses will �nd their premises burnt or Given dealing effectively with communication to the media in
�ooded. There is no excuse for �rms failing to have contingency a crisis is so well documented and is, in the scheme of things,
plans for dealing with sudden emergencies. reasonably straightforward, of more interest is the question
“why do organisations frequently mishandle crises and manage to
By contrast, many crises that become PR disasters, such as Toyota’s inflict on themselves a PR disaster whose damage is far greater than
accelerator pedals, are issues that have been allowed to fester and the initial problem?”.
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KELSO CONSULTING
21 Bloomsbury Way, London WC1A 2TH 020 7242 2272 www.kelsopr.com pr@kelsopr.com
Media Relations • Thought Leadership • Business Social Media • Crisis Communications

2. Accelerators - what went wrong
Toyota initially refused to acknowledge the problem
After sustained pressure it offered an explanation (badly
�tting �oor mats) that was greeted with skepticism and
did not address the allegations
After more pressure it changed its position again and
agreed to replace the accelerator pedals in affected
vehicles
Insights from behavioural economics (a combination of economics
It allowed others to set the agenda, which in the US
and psychology that considers why customers and, particularly,
culminated in a panic over their cars’ safety
investors often act irrationally) holds some useful insights to
decision-making in a crisis too. As well as seeming indecisive, Toyota’s bosses went to
ground as the story erupted – failing to show either
For instance, people have a “self-serving bias”. Its traits include: concern or leadership in tackling the problem
• we typically attribute our successes to personal factors but Public appearances and contrition only happened under
failures to factors beyond our control (people with low self- duress after months of sustained pressure from the US
esteem do the opposite). This gives the common human Congress and media
tendency to take credit for success but deny responsibility
By this time, Toyota’s shares had lost more in value then
for failure – think of the heads of big banks after the credit
the entire value of Ford!
crunch.
• we evaluate ambiguous information in a way that supports our
interests (of course you and I don’t think we do....but we do!)
• we believe we perform much better than the average person in As a CEO, when a crisis occurs you
areas important to our self-esteem (and, in order to maintain
will believe:
this belief, we will always rationalize-away failures to – again,
think heads of banks or Sir Alex Fergusson’s comments when It won’t happen to us
Manchester United gets beaten: it is always the referee or We can deal with it when it happens
injuries to blame, never a better squad or manager!).
When it happens, you will believe that it is not our fault
When people hold a view that is demonstrably wrong, do The criticism of us is unfair or misguided
they change their mind? You’d think so. In fact, in the face of
The problem is not as bad as is being made out by
mounting evidence people generally become even more adamant the media
they are right (think of George Bush’s and Tony Blair’s comments
on the invasion of Iraq long after the subsequent non-discovery of We are being picked on unfairly
weapons of mass destruction). The media is out to get us (paranoia has now set in!)
We can �x it if they leave us alone (which no one trusts
So as a crisis mounts and the pressure builds, management and
you to do – as you have already failed to �x it!)
advisers become even more convinced that they are right and
outsiders are wrong. Contradictory information is ignored, and If I keep my head down it will be okay in the long run
advisers who give contrary views are distrusted.
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KELSO CONSULTING
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Media Relations • Thought Leadership • Business Social Media • Crisis Communications

3. Why do organisations go into “no comment” mode when
What you experience in a crisis they know it is damaging? Everyone knows that saying “no
comment” and generally refusing to answer legitimate questions
Ultra-compressed timescales
is generally the worst thing you can do since it is equated with an
Lack of clear information admission of guilt. Yet under pressure senior executives suddenly
Rumour and speculation forget all this.
Events unfolding out of your control
Journalists (whose job involves them dealing with many
Decision-makers unavailable companies all the time) will judge the company by how
professionally it handles the communications during the crisis
The need for fast decisions
– and companies are often judged at least as harshly on their
Communication becomes more adversarial, more competence in handling the communications as they are about
probing, faster paced and less predictable the crisis itself.
“News journalists” replace business correspondents
(and your problems really begin!) Sadly, there are many companies that have found to their cost that
the court of public opinion is both immediate and harsh, and if
this aspect is mishandled then the business will suffer far more
at the hands of customers and investors then it ever will at the
The right way to handle a crisis hands of a judge. For instance Andersen, which was embroiled in
controversy over its advice to Enron, ultimately won in court....
Britain’s top chef, Heston Blumenthal, faced a high pro�le
sadly, all that was left of this accounting giant by then was a
crisis when more than 500 diners, including several well known
celebrities, suffered food poisoning in early 2009 at his Michelin- handful of employees winding it up. All the clients and employees
starred Fat Duck restaurant. Not only the restaurant, but his had walked in the meantime.
personal brand were threatened.
The celebrity chef immediately acted with direction and concern, HOW KELSO CONSULTING CAN HELP
closing the restaurant and ensuring it was sanitised from top
to bottom. Kelso Consulting helps our clients prevent PR disasters
through working with them to develop, plan and rehearse
Suppliers weren’t blamed, the buck wasn’t passed to scapegoats
and sick diners’ claims weren’t dismissed. Having done everything crisis communications plans to ensure their con�dence and
immediately and transparently that could be expected, his �agship preparedness to respond quickly and appropriately when
restaurant re-opened to widespread media interest and the episode problems, whether small or large, occur.
was ultimately a non-incident.
The outbreak was investigated by the Health Protection Agency. We work within the grain of human behaviour, using scenario
According to The Guardian newspaper later than year “Their planning and rehearsal, to ensure management within an
�ndings, released today, established that diners were infected by organisation are ready for their role in preventing crises as well as
the norovirus bug, which had spread throughout the country at responding to them. We also help organisations learn from how
the time. It is thought to have been brought into the restaurant their competitors and comparator organisations handled crises.
through contaminated shell�sh, and inspectors criticised food
safety standards in the kitchens.”
Where clients are concerned about potential negative media
It goes on to report numerous failings in the restaurant’s food interest, we provide experienced counsel on minimising coverage
hygiene standards, but an initial strong and responsible reaction
and harm.
ensured the restaurant and chef were well placed to weather this
critical coverage.
For more information, please contact us on 020 7242 2273.
At the time of writing he is featuring in Waitrose adverts, has a www.kelsopr.com
series on the TV, and the Tasting Menu at the Fat Duck, including
a course entitled “Sound of the sea” costs £150.
PAGE 3 OF 3
PR
KELSO CONSULTING
21 Bloomsbury Way, London WC1A 2TH 020 7242 2272 www.kelsopr.com pr@kelsopr.com
Media Relations • Thought Leadership • Business Social Media • Crisis Communications