Crisis? What crisis? Sarah Freeman talks to Donald Steel, the man companies and organisations go to when things go wrong.
While Donald Steel won’t go so far as to say he loves a drama, where others see only catastrophe, he sees a business opportunity.
Steel describes himself as an expert in crisis management and as the former head of communications at the BBC he certainly has no shortage of experience in dealing with disasters.
He was at the Beeb when journalist Andrew Gilligan accused Tony Blair’s government of having “sexed” up their dossier on Iraq and remembers vividly just how quickly events moved. Just days after being named as Gilligan’s source, biological warfare expert Dr David Kelly was found dead and the Hutton Inquiry was launched.
Steel was also there throughout the competition scandal in which even Blue Peter became embroiled and much more poignantly he was there when newsreader and presenter Jill Dando was murdered.
He left the BBC to start his own company and the last few months have proved that Steel was on the money when he identified there was a gap in the crisis management market.
From Lance Armstrong deciding to confess all on Oprah to the horsemeat scandal and the ongoing investigation into Jimmy Savile’s sex abuse, 2013 hasn’t exactly started quietly.
“There has been a tendency to see having a crisis management plan as a bit of a luxury,” says Steel. “It really isn’t. When it comes down to it, if a company’s reputation is challenged it has an immediate and often devastating impact on business.
“If it’s not handled properly then the damage done may be felt long term and, in the very worst case scenario, mean the business has to close. Research shows that companies which deal badly with a crisis lose value, but those who deal with problems effectively actually see their value increase.”
The horsemeat scandal has provided Steel and pretty much every supermarket and meat supplier in Europe with food for thought.
“Regardless of what the crisis is, companies have what I refer to as a golden hour before they must publicly respond,” says Steel. “That’s generally enough time to check the facts of the story and issue at the very least a holding statement.
“After four to six hours they should be putting a spokesman up for interview, even if the answers they can provide is limited.
“When disasters happen, companies inevitably find themselves under enormous pressure, but not fronting up to the public only makes a bad situation worse.
“I’m not talking about rushing out a gushing apology, but if they don’t put their head above the parapet they risk losing public trust and that can have massive financial implications.
“Lots of companies don’t think about what they are going to do in a crisis until they are right in the middle of one and by then, it’s too late.”
One of Steel’s specialisms is how quickly reputations can be made, but also crucially destroyed in the age of social media. Step forward HMV.
Last month the troubled retailer’s Twitter feed was hijacked by a group claiming to be disgruntled staff. The workers announced the firing of 60 staff from the HR department in what they described as a “mass execution of loyal employees who love the brand.”
Minutes after the live commentary began, administrators Deloitte confirmed the loss of 190 jobs across the company and, proving perhaps just how out of touch HMV had become, one of its bosses asked, “How do I shut down Twitter?”
“Social media has fantastic benefits, you only have to look at how it has given a voice to people caught up in the Arab Spring, but companies have to be very, very careful about who has access to their official feeds.
“It’s not just HMV, Chrysler was left with egg on its face after one of their employees posted an obsene message on its Twitter feed. Companies do have to make it very clear that personal views must be kept well away from official social media streams.
“It sounds simple, but it’s something companies keep falling foul of and, while a tweet can take just a few seconds to type, the fall out can last much longer. Disasters happen, but it’s how you deal with them that counts. People are generally willing to forgive lapses, what they are not willing to forgive is those who bury their heads in the sand.”
Donald Steel will be speaking at an Institute of Directors event at the Museum Gardens in York on March 7. To book a place go to www.iod.com/yorkshire events.