Business 2.0 Magazine

Uh-Oh Crisis management is tough. Now imagine it in Internet time.

By Joanne Helperin, July 2001 Issue

Johnson & Johnson pioneered crisis management in 1982, when tampering forced the company to recall its Tylenol products. But nowadays protecting a company's reputation and limiting its financial losses is a lot harder. The Internet's ability to instantly distribute information-and misinformation-globally has made crisis management more critical and more difficult. The number of things that can take management by surprise has grown beyond sliding stock prices, product defects, and workers going postal to include server failures and hacker attacks.

But the scariest part is that it doesn't take a real calamity to damage the corporate image. In fact, it doesn't take anything real at all to threaten the brand you've worked so hard to uphold. The old adage that "a happy customer will tell a friend, but an unhappy customer will tell 10 friends" is racing on meth when the Net's involved. Unhappy customers can now share their opinion of your company or its products with millions of "friends."

A customer with a company complaint can go to Baddealings.com, eComplaints.com, Fight Back!, bitchaboutit.com, or TheSqueakyWheel.com, to name a few. Someone with a grudge against the boss can take potshots on FuckedCompany.com. Other consumer complaint sites are company-specific, like WeHatePacificBell.com-not only a forum for Pacific Bell-bashing, but also a list of links to other like-minded sites.

While the new technology aggravates the problem, it's possible for the same technology to help alleviate it. The Net is also becoming a powerful weapon in the crisis manager's own arsenal. PlanetFeedback.com, for example, forwards complaints to the appropriate companies in an effort to elicit an apology or resolve the problem. This provides the companies with the opportunity to salvage the customer relationship. To encourage businesses to take it all seriously, the site tracks the percentage of complaints that each company responds to and publishes its "response rate."

Smart companies react to complaints; smarter companies use complaints as an early warning system. If enough people are griping about the same problem, it might warrant investigation to avoid a bigger crisis. Too few companies monitor consumer opinion on the Net, says Maria Russell, chair of the public relations department at Syracuse University's S.I. Newhouse School of Public Communications. PR nightmares like that experienced by Tommy Hilfiger will always catch a company by surprise, she says, if no one has an ear to the cyberground. "New companies don't know the old rules [of customer service], and old companies don't know the new platforms," Russell says.

Using the Internet for customer feedback is only the beginning. The Web also plays an important role in disseminating information to consumers and the press during a crisis. Companies are now expected to respond to a crisis immediately, putting pressure on executives and PR professionals alike to be ready for anything at any time. A company that doesn't have in place a detailed crisis prevention and management plan that includes the Internet is very likely to get blindsided.