What to Do In the Hot Seat: How to Recover From a Scandal

Business.com / PR / Last Modified: February 22, 2017

Has your business found itself in a mess? Manage your reputation, Olivia Pope style: Handled.

Think about the last time you ate out at one of your favorite restaurants or fast food chains.

Remember, for a moment, what the environment was like, why you chose it, how you felt when the food was delivered and how you left satisfied.

Now imagine that the next day you are catching up on your social media gossip and you see an article posted concerning your favorite restaurant.

What do you find out? It was shut down for sanitation reasons, perhaps for animal droppings near the soups.

What does the idea do to you? Does it make you question your dinner from last night? Did you eat the soup?

Related Article: Does Your Business Need a Code of Ethics or Conduct?

What a Scandal Means

The above scenario is relatively common, unfortunately. It may not necessarily be for animal droppings, but definitely for failed health and sanitation inspections and problems with ingredients. You could say that the business is now experiencing the workings of a crisis, maybe even a scandal. You could say that its reputation has been marred.

How would it even begin to recover? How could it convince its market that it still has good, clean food? What would it have to do to get you back in the doors once it reopens?

Businesses everywhere, regardless of size or industry, experience some degree of scandal at some point in their existence. Just like the people who run them, businesses are far from perfect, even though they strive to be.

Trust, after all, is hard to reestablish once it’s been questioned. Isn’t that all a scandal is?

A scandal is really just a breaking of trust between two entities. Whether it’s between the business and its investors, employees or customers, the trust is broken when a party doesn’t live up to the expectations set upon them or breaks the ideals the brand stands for.

What Can Be Done?

Recovering from a scandal can be difficult. Take, for example, the recent snafu in the automobile industry. Volkswagen, ranked the world’s largest automaker for the first six months of the year, is in the middle of a pretty large and, need it be said, expensive scandal. Reports revealed the manufacturer cheated vehicle emissions tests with advanced software.

This scandal has resulted in declined sales on some vehicle models and increased sales on competitors’ models. The brand is desperately trying to reestablish its reputation with cash payments to customers, layoffs of executives and by using some of the same steps toward recovery seen below.  

Steps Toward Recovery

Everyone hopes that when a scandal comes their way, it can be quickly softened. Here are some steps to consider when a scandal or crisis comes your way:

1. Move Quickly

One of the best things you can do is acknowledge there is a problem and do so quickly. If something comes to light that is potentially damaging, don’t hesitate to get something – anything – out there to let people know you are actively doing something about it.

Not moving quickly enough is what damaged the reputation of Walter Reed Army Medical Center, whose care of wounded soldiers has been under the microscope since 2007. Attempts to react weren’t as thorough and quick as they should have been, resulting in more discussions and news attention as recent as 2013.

Related Article: 6 Lessons in Corporate Ethics from the GM Recall

2. Be Straightforward, but Be Discreet

When a crisis comes up, it can be tempting to blurt out a response to give background on the emerging story. Acknowledge that something has happened, but don’t give heavy details until a team has been assembled and all of the facts are straight.

3. Set up a Team of People to Plan a Way Out

There are people out there who make their livelihood from making other people look good: PR specialists, marketing managers, reputation managers, lawyers, etc. Use them as resources to guide your way back to the good graces of your customers.

It’s always important to be proactive, so build your team quickly in order to rebuild your reputation.

4. Remember the Emotions of Your Market

It’s important to consider your market. This may seem like a no-brainer, but this really means you should consider all aspects of your market. Nestlé’s baby formula fiasco has had lasting effects and building back its brand has surely been difficult. This isn’t, of course, the only scandal to happen to this large corporation. Recent news shows Nestle is pulling $50 million dollars of product from shelves due to high lead content.

What does this mean for consumers and shareholders? The effects of careless business practices are what are real and tangible to the consumer. Their babies are the ones who died from misused, and unnecessary formula. They are the ones who’ve been soaking up lead with each delicious Maggi noodle.

5. Apologize When It’s Necessary

Whether the scandal you’re preparing for or dealing with now is on a small or large scale, know when it’s appropriate to apologize. Sometimes it’s helpful, and sometimes it’s not. There are many different opinions on this, but generally an apology is courageous.

Whatever you decide to do, decide it with your team.

6. Give Actionable Items for How the Scenario Will Be Fixed

In the case of Volkswagen, the CEO, Martin Winterkorn quit his job. Now, Volkswagen is actively seeking someone else, and it’s not hiding it from the media. Strategic moves like this can help your case as consumers and stakeholders will see you are actively moving and responding.

Let the media, no matter how small and on what scale, know what you are doing. Give them releases for all of the good that is happening, and invest in local communities as much as possible. Doing so brings good rapport back with the people who are most connected with your product and business.

Related Article: The Implosion of An Iconic Brand: Lessons from Volkswagen

Regardless of whether or not your crisis involves a personal matter, a failed health inspection report or a large-scale scandal, it’s important to acknowledge that something happened and not sweep it under the rug. Use this article as a starting point to doing further research with your team in developing a comprehensive reputation management plan.

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