Commentary From Crisis Management Expert Edward Segal, author of Crisis Ahead: 101 Ways to Prepare for and Bounce Back from Disasters, Scandals, and Other Emergencies (Nicholas Brealey)

A traditional best practice for companies when confronted with a crisis is to immediately tell their side of the story about the situation.

Tesla has apparently decided to go in a different direction.

The Washington Post reported that a Tesla employee had "filed a rare lawsuit against the electric vehicle maker, alleging Tesla fostered a climate of sexual harassment at its Fremont, Calif., factory, where she says she was subjected to catcalling and aggressive physical touching." 

Missing from the article, however, were any comments or reactions from Tesla about the allegations. But it was not for lack of trying by the news organization. According to the Post story, "Tesla did not respond to multiple requests for comment. The company, which has not had an active public relations department since 2020, does not typically respond to press inquiries." 

Sending The Wrong Message

A company that does not immediately acknowledge and address a crisis runs the risk of damaging their image, reputation and credibility, and making the crisis worse. Saying "no comment"—or nothing at all—can send the wrong message to the public about the organization's actions, concerns or culpability about the crisis.

Saying Zip About Zillow 

In a story headlined "What Went Wrong With Zillow? A Real-Estate Algorithm Derailed Its Big Bet", the Wall Street Journal reported that, "This month, Zillow conceded failure in what amounts to one of the sharpest recent American corporate retreats. It said it would close Zillow Offers, which was responsible for the majority of the company's revenue but none of its profits; cut about 2,000 jobs, or a quarter of its staff; and write down losses of more than a half-billion dollars on the value of its remaining homes."

'"This is code red," Joshua Swift, senior vice president of Zillow Offers, said during [a] virtual meeting, according to the person who attended. Mr. Swift declined to comment through the company."

Morgan Borer is a partner at Bevel, a communications consultancy which specializes in digital and traditional media relations, crisis communications, public affairs and investor relations.  She said the Zillow home-flipping story is an example "of a crisis where executives refused to speak to the media, ultimately making the situation worse. Best practices for crisis communications include gathering the facts, consulting with legal, framing the message, and reacting swiftly with one, unified voice. When executives fail to do this or outright refuse to speak to the media, it appears that they are hiding something, which always magnifies the situation."

United Airlines' Delayed Response 

Cheryl Dixon is an adjunct professor of strategic communication at Columbia University, a communication strategy consultant and a former marketing and brand executive. She recalled that a passenger was dragged off a United Airlines flight in April of 2017, and videos taken of the event were widely shared on social media. "Threats of boycotts and demands for answers ensued before United Airlines issued the first of several responses the following day," Dixon said.

Dixon said United, "... apologized for the overbooking situation that sparked the incident, and later in the day released a statement from CEO Oscar Munoz that was unsatisfactory to many. United Airlines finally acknowledged responsibility two full days after the incident."

'A Terrible Idea'

Scott Bovarnick, a public relations executive with The Cyphers Agency communications firm, noted that, "It is tempting for business leaders to maintain silence when a crisis breaks out, as many want to believe that a late breaking crisis will blow over quickly.

"This, however, is a terrible idea. No matter what time a crisis breaks, businesses must be ready, able, and willing to respond to it. Not responding in a timely manner to an inquiry or a reporter during a crisis will always make a business look like they don't care, and consumers have a longer memory than people would like to admit."

Bovarnick said, "Image and perception are incredibly important in the modern business environment. Consumers are much more likely to avoid businesses that do not handle a crisis well than they were in the past. Even if the crisis seems unimportant to a business leader, they need to be prompt in their communications.

"Handling a crisis well costs a lot less than handling one poorly, and it is a lot less expensive to pay people to respond to reporters at odd times than to pay for clean-up. Plus, good relationships with reporters are great for any company to have, and promptly responding to their inquiries is a great way to build them," he said.

Others Will Fill The Vacuum

Dixon of Columbia University advised that, "If the company isn't talking, others will certainly fill in the blanks through speculation or with their own version of the story. When a crisis hits, people will try multiple channels to get answers—employees, partners, holding companies and brand ambassadors.  

"A company should have a crisis plan and policy in place that identifies key leaders who act as official spokespeople and ensures employees are directing questions to the appropriate team members in communications, PR and legal."

She observed that, "a big contributor to a company's reputation and ability to move past a crisis is how it actively and quickly it acknowledges an issue and how it responds to it."

Transparency

Dixon counseled that, "Internal and external stakeholders, customers, media and the general public expect transparency, a show of concern and promise of action. To not be visible when a crisis is swirling—even though the company might be actively investigating and fact finding—is very detrimental and can easily be perceived as the company not caring, acting selfishly and refusing to accept any responsibility."

Don't Wait For All The Facts

"One of the biggest mistakes companies make is waiting until they have all the facts before responding. Or the review and response process is so complicated that the key leaders are unable to gain consensus and respond quickly. It is fine to say, 'We are investigating and don't have all the facts yet...'"

"Preparing and delivering a holding statement that demonstrates awareness and concern as well as the known facts can also help dispel rumors and untruths. It may also help to keep the crisis from escalating,'' Dixon concluded.

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