Predicting the Perfect Storm

Chris GidezBy Chris Gidez

Senior Vice President, Risk Management/Crisis Communications, Hill & Knowlton USA

“… a tempest created by so rare a combination of factors that meteorologists deemed it ‘the perfect storm.’”

Sebastian Junger, The Perfect Storm

In many respects, the Toyota recall has been the perfect storm. A “rare combination of factors” has caused it to be the Tylenol of our time – a definitive case study in crisis management.

The general consensus view is that Toyota may have stumbled out of the starting gate, and this may have compounded the situation. But it was able to recover its balance in short order. Was irreparable damage done? The final chapter in this book has yet to be written, so it remains to be seen whether Toyota will earn kudos or criticism when all is said and done.

However, it is not too soon to dissect the anatomy of this crisis; and in doing so we can see that in many respects its trajectory was clearly predictable, and not all that surprising.

Several months back a client asked me, “Is it possible to predict whether a situation will remain just a mere nuisance, or instead morph into a full-blown, pants-on-fire crisis?”

In fact, by examining various crises that have dominated headlines in recent years we can see a commonality of combustion factors that can cause a matter to ignite. The presence of a larger number of these combustion factors simply increases the likelihood the situation will escalate.

  1. Is the problem real? Of course, the first question to be asked is whether the situation poses a legitimate threat to the enterprise. Reality is more dangerous than rumor or speculation.
  2. A clearly defined, tangible, measurable risk. When a risk appears real rather than abstract, the issue has a greater likelihood of escalating. Think epidemic vs. climate change.
  3. A sympathetic victim or set of victims. Cynical as it may sound, the media are far more interested in conflict where there is a vulnerable party. Children, the elderly and animals are the most attractive to the media.
  4. Scale. Together with the need for a sympathetic set of victims, this is perhaps the most significant combustion point. The wider the universe of affected people, the greater the crisis.
  5. Topicality and trends. I call this the shark attack syndrome. Each year (typically at the beginning of the summer), there is a news report of a swimmer attacked by a shark. Then another and another. It would seem the memo went out to all sharks – “Attack!” (And let the media know)” In fact, media love trends, particularly when they complement a matter of social interest.
  6. Hypocrisy. In addition to being one greatest in his sport, Tiger Woods was happy to play the family card, promoting his affection for his parents, being photographed on the 18th green with his wife and children. With the revelations of his philandering, the media were quick to pounce on the hypocrisy. John Daly would never have suffered such media attention, because there was no disconnect between his behavior and his purported values.
  7. Irony. A cousin of hypocrisy. Toyota built its reputation around safety and quality. Would there be as great a firestorm if Chrysler had such a recall?
  8. Deceit. Companies, politicians and celebrities caught in a lie simply compound their problems.
  9. Compelling images in a YouTube world. What nearly wrecked Michael Phelps’s career in product endorsements was not that he smoked pot, but that someone happened to have a camera to capture the moment and then post it to the internet.
  10. Mismanaging the crisis. The tone of a crisis is established in the first few days. Once Toyota stumbled, everything they did subsequently was tarnished by the perception of their early handling of the crisis.
  11. Timing. Another way of putting it is, “wrong place, wrong time.” Sometimes matters escalate simply because they occur during a slow news cycle.
  12. Someone to throw fuel on the fire. One of the truths about crises is that, like a fire, for them to be sustained there needs to be fuel, and someone able to throw that fuel on the fire. In the U.S, politicians, trial lawyers and the media play this role.

So, what is the lesson here?

We can use these combustion points as yardsticks to guesstimate how severe a crisis may become, enabling us to plan accordingly. The greater number of boxes checked, the more severe the crisis is likely to be.

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