Wry & Dry

How Not to Manage a Crisis 101

W&D is old enough to remember the 1982 Tylenol murders.  Not just for the shocking murders, for which the culprit has not been found and an unclaimed reward of $100,000 is still available, but for the sensible, swift and ethical response of the owner of Tylenol, Johnson & Johnson.  In that incident, there was a series of poisoning deaths (seven) in Chicago resulting from the tampering with Tylenol capsules on pharmacy shelves.  For more details readers should consult the interweb [1] .

Johnson & Johnson's response was exemplary.  It decided to take the hard decision and sacrifice short-term profitability for safety.  It distributed massive-media warnings to hospitals and distributors and halted Tylenol production and advertising.  It issued a nationwide recall of Tylenol products; an estimated 31 million bottles were in circulation.  The company also advertised in the national media for individuals not to consume any of its products that contained acetaminophen (paracetamol).

The outcomes were a short-term cost to Johnson & Johnson of over $100m (value about $300m today); but after two years it regained 100% of its pre-incident market share (35%) and hastened the introduction of tamper-proof/ evident packaging in the industry.  Johnson & Johnson gained enormous public trust.  As one scholar put it:

"The Tylenol crisis is without a doubt the most exemplary case ever known in the history of crisis communications. Any business executive, who has ever stumbled into a public relations ambush, ought to appreciate the way Johnson & Johnson responded to the Tylenol poisonings. They have effectively demonstrated how major business has to handle a disaster."

Which brings W&D to the sad event at Dreamworld, a southern Queensland fun-park, where earlier this week four visitors were killed in a fun-ride accident.  W&D writes with caution and concern: his colleagues in First Samuel's Brisbane office speak of a city numb with grief.

But W&D's quill is grumpy.  The first response of Ardent Leisure, Dreamworld's owner, to four visitors being killed was , "Dreamworld would like to assure the public and park guests that at the time of the incident the park was fully compliant with all required safety certifications."

Clearly penned by a lawyer.  And not a smart one at that.  That is a mealy-mouthed CYA response

Dreamworld planned to re-open today: business as usual.  Until the police said "Nuh".   The Queensland Police has saved Dreamworld from a further PR disaster.

This is a PR 101 epic fail. Who are these people? 

Let W&D give readers the whisper.  He has ridden on that very ride with his older children.  And was planning to take his two step-sons in the future.  But now.  No way.  It's a matter of trust.  What mother or father is going to let her/his children on a Dreamworld ride? 

In view of the age of the rides and history of faults, which are now emerging, Dreamworld is going to have a very, very tough time on its hands.  

The W&D preferred response would be for Dreamworld to display immediate public contrition.  And implement a long-term plan to regain trust.    

In short, shut down the whole place.  Let the heat settle, as much as possible.  Care for the victims and their families.  And announce that it will dismantle and re-assemble or re-build every ride.  And that the killer-ride would be dismantled and removed.  

Take the extreme step and the short-term cost.  As Johnson & Johnson did.

But that takes a special sort of CEO and board.  W&D is not sure that Ardent Leisure (which owns Dreamworld), now called Main Event Entertainment Limited, is up to the mark.

Coincidentally, Ardent Leisure had its Annual General meeting yesterday.  The CEO, Deborah Thomas, was proud to announce that, "Our bowling division had an outstanding result".

Weep.

[1] There is much literature, but a good start would be: Johnson & Johnson crisis management.