2023 is a year that we will look back on as the year of the crisis.
PwC, Qantas and Optus are exceptional case studies of what not to do when faced with an issue, with lessons for all organisations about the fragility of reputation and the importance of good communications.
The behaviour and actions of PwC earlier in the year was the gift that kept on giving for media, and provided reams of fodder for commentators about how badly the firm handled the crisis and its seeming lack of awareness (or regard) of how its actions were viewed.
Central to the way PwC fanned the flames was its reliance on the legal and regulatory considerations. To many, it appeared to be hiding behind the law, promising a “behind closed doors” review that would take months to come out – if ever – rather than facing up to its failings.
Imagine if PwC had taken a different approach at the very beginning. Instead of misplaced superiority and arrogance, it had acted with humility and penitence, acknowledged the wrong-doing, ensured those involved had immediately resigned, and apologised – yes, apologised.
The same can be said about Qantas. When faced with accusations that it had sold tickets on flights it already knew had been cancelled, Qantas’s response was that it doesn’t sell tickets. It said it sold a ‘bundle of rights’ – a response that left most Australians gobsmacked. It may be legally correct, but it’s certainly not what most people believe or accept to be the case.
This is where the conflict between legal advice and PR advice is stark. Most lawyers would advise against admitting any fault or offering an apology of any kind and instead rely on technical or legal arguments, with the idea of protecting the firm from future claims or lawsuits.
But knowing you are following established legal guidelines must be cold comfort in the face of politicians, journalists and the general public baying for your blood.
A PR and communications adviser, on the other hand, understands the value of honesty and transparency, and taking responsibility for actions. An apology shows the fault has been recognised and admitted to, and goes a long way to diffusing anger.
Of course, the apology needs to feel genuine, and this is one of the key areas where Optus fell down. CEO Kelly Bayer Rosmarin may have proffered an apology for the outage that left millions of Australians without phone or internet – and in some cases, access to emergency calls – but the apology didn’t ring true. Instead she was accused of making fun of small businesses, and acting arrogantly in her refusal to try and explain what had gone wrong.
Most organisations and executives will never have to face the kind of situation that PwC, Qantas or Optus were in. Nonetheless, there are lessons to be learnt on how to manage a crisis from their experiences.
Firstly, it is crucial to recognise there is a crisis. It seems that all these companies were slow to understand how their actions would be viewed and treated, and therefore were continually taken by surprise by the government’s and regulator’s response, the damaging media coverage, and the public’s anger.
Secondly, don’t try to downplay to issue, or hide facts. Any attempt to do so only makes the organisation and the executives look out-of-touch and arrogant. It also means information will continue to be revealed over time, giving the story new life. And hopefully this goes without saying, but don’t lie. When the truth does come out – which it almost certainly will – it adds fuel to the fire and means everything you have said is now open to doubt.
Next, look at the situation from an outside perspective. PwC for example tried to protect its people and its clients – perhaps understandably – but the end result was only to cause more damage, including to PwC staff who were never involved in the original situation. It is difficult to imagine just what morale must have been like at PwC, but it’s possible much of this could have been mitigated if those responsible had immediately left the firm.
Finally, involve your communications advisers early, keep them informed, and listen to their advice. Just because you pay your lawyers more than your PR advisers, doesn’t mean their advice is more valuable.
This doesn’t mean “spin” – no amount of spin can save a company that has acted the way PwC acted, or protect the jobs or legacy of Alan Joyce or Kelly Bayer Rosmarin. But keeping the lines of communication open with employees, journalists, government and regulators, clients, and the general public, and showing that you take the situation seriously and are trying to fix it, are crucial in issues management.