Smart business owners know that crises can occur in a moment's notice, so they must prepare their employees to handle any type of workplace situation. While you hope it's never used, this proactive planning minimizes damages when an unfortunate circumstance derails your business. After all, it's easy for employees to panic and make rash decisions when they're under pressure to respond to a significant crisis.

Rather than gunning for the immediate solution, you should carefully select the response that's most human and customer-focused. Whether that be apologizing to victims, protecting your company's reputation, or using humor these strategies should always be chosen and practiced before a crisis occurs.

Before we craft an effective crisis-communication plan, we need to understand the different types of crises and how they can affect your business. Let's look at the five types of crises that affect every company, regardless of industry.

Free Download: Crisis Management Plan & Communication Templates

5 Types of Crisis

There are five types of crises that may impact your organization. Let's briefly summarize each type, or you can read a more detailed explanation of each here.

1. Financial Crisis

A financial crisis occurs when a business loses value in its assets and can't afford to pay off expenses. This is caused by either internal or external factors that result in a severe decrease in demand for the company's products or services.

2. Personnel Crisis

A personnel crisis occurs when an internal stakeholder of the organization is involved with an illegal or unethical scandal that impacts the company's reputation.

3. Organizational Crisis

Organizational crises occur when a business exploits its customers to gain more profits or information.

4. Technological Crisis

A technological crisis occurs when an organization's technology crashes -- such as when a server breaks or an error emerges in a software product. When these crises happen, customers and users have no access to the company's products and/or services.

5. Natural Crisis

A natural crisis occurs when severe weather interrupts normal business functions. This can be temporary like a snow delay or more permanent like a flooding evacuation.

Your business can learn a lot from companies that have responded to and overcome these five types of crises. In fact, the next section includes real case studies where notable organizations managed to maintain their reputation in the face of a company-wide crisis.

5 Crisis Communication Examples

1. Tylenol

In 1982, Tylenol suffered a huge blow when seven people in Chicago were reported dead after consuming over-the-counter Extra-Strength Tylenol capsules. Shocked by the sudden crisis, parent brand Johnson & Johnson discussed what to do: Does it risk its reputation by recalling the product or defend its reputation by claiming it to be tampering?

Fortunately, the brand decided to protect consumers over its reputation and conducted an immediate recall of its most profitable product: 31 million bottles at $100 million. Additionally, the company went as far as to issue a national warning against consuming Tylenol capsules. Johnson & Johnson knew Tylenol wasn't responsible for the deaths; however, the brand's focus wasn't on proving its innocence, it was to protect consumers and ensure their long-term safety.

This could've left Tylenol in a very tight spot, but the company's initiative to immediately recall products, issue warnings, and establish hotlines for nervous customers left it in a strong light. Additionally, when Tylenol re-introduced its product, it used tamper-resistant packaging and promoted caplets, which are more difficult to tamper with. It also made over 2,250 presentations on the safety of the new product to educate dubious consumers. The dedication to promoting safety and making customers feel safe has made this notorious incident a model for crisis communication.

2. Pepsi

In 1993, Pepsi faced serious allegations about the safety of its products. The scandal began with an elderly couple in Washington who claimed to have found a syringe in their Diet Pepsi can. Over the course of a week, 50 reports came in about various objects being found in Diet Pepsi cans -- pins, sewing needles, bullets, screws, crack vials, and more.

In response, Pepsi released a four-part video campaign showing the exact process each can follows in production. These videos proved there was no opportunity for a can to be tampered with before it was delivered to a store. Additionally, Pepsi got its hands on a security video showing a woman in Colorado inserting a syringe into a can of Diet Pepsi at her grocery store. This confirmed to consumers that Pepsi was innocent of the crime.

After confirming internally that the business was not at fault, Pepsi took an effective, defensive approach with its video campaign. Rather than claiming innocence and leaving room for controversy, Pepsi proved it using an educational video and security tape. The company even bought a print ad with the headline, "Pepsi, Proud to Introduce … Nothing" as a humorous attempt to move on from the incident.

3. American Red Cross

In 2011, the American Red Cross faced a more lighthearted crisis. One evening, the following tweet appeared on their Twitter account:

Dogfish-crisisSource: HuffPost

The tweet was shared by an American Red Cross social media specialist, who accidentally posted to her organization's Twitter account rather than to her personal one. The organization could have faced repercussions from its followers if it had merely deleted the tweet an hour later and ignored it. However, the American Red Cross decided to take a humorous approach to crisis communication with the following tweet:

Dogfishhead-crisis2Source: HuffPost

Even Dogfish Head brewery jumped into the conversation, encouraging people to use the hashtag #gettngslizzerd and donate to the American Red Cross. All in all, the incident brought more attention to the American Red Cross and enjoyed a spike in donations. The organization's lighthearted response to the situation -- rather than issuing a formal public apology or taking a more serious stance -- showed customers that even the largest organizations make human mistakes.

4. JCPenney

In 2013, JCPenney faced a headache when it released the Michael Graves Design Bells and Whistles Stainless Steel Tea Kettle. In honor of the new product, JCPenney put up a billboard on the 405 Interstate highway in California. Bemused drivers took photos of the billboard and one user posted it on Reddit, claiming that the kettle held a striking resemblance to Adolf Hitler (If you're interested, you can find that image here).

This crisis could have destroyed the brand, causing a sea of consumers to accuse JCPenney of being insensitive or even anti-Semitic. However, JCPenney acted quickly to change the narrative. Taking a humorous approach, the brand replied to tweets with variations of the message, "If we had designed it to look like something, we would have gone with a snowman or something fun."

In a shocking customer relations miracle, the kettle had gone viral by the Tuesday morning and had been sold out by the afternoon. JCPenney's clever message about the crisis led customers to actually increase the company's sales. However, in order to avoid any further offense, the company decided to remove the kettle from its site, as well as the billboard where it was first spotted. This decision showed that JCPenney could laugh about its mistake but also take the initiative to right its wrong.

5. Virgin Group

In 2014, the Virgin Group faced a massive crisis when a Virgin Galactic test flight crashed. The SpaceShipTwo space tourism craft crashed while flying over the Mojave Desert in California. One pilot died from the crash, while the other was injured. The crash caused a large setback to the Virgin Group's space travel plans, as well as to commercial space tourism as a whole.

The Virgin Group began with sharing details of the crash and showing genuine concern for the pilots and their families. Sir Richard Branson, the founder of the Virgin Group, tweeted numerous times with updates and personal remarks. Branson immediately flew out to Los Angeles to be at the scene of the incident and take ownership for the unfortunate situation.

What made this crisis communication so successful was that the Virgin Group and Branson never strayed from their mission. They didn't quit their efforts with Virgin Galactic, rather, their message stayed consistent: "Space is hard – but worth it. We will persevere and move forward together." They didn't want the pilot to die in vain, and this message resonated with the public.

A common theme we can take from all of these examples is the importance of immediacy. The longer an organization waits to respond, the larger the crisis gets. When a company ignores social media and customer reviews, users start to come to their own conclusions on a crisis -- and those conclusions usually place the company as the perpetrator.

Naturally, you can't plan for every type of crisis, so it's important to use your best judgment. Certain communication strategies, such as humor, can be vastly effective in some cases and absolutely inappropriate in others. At the end of the day, every response to a crisis should prioritize the customer, putting the company and its property second. A genuine consideration for consumers is what will help your crisis blow over.

For more tips on handling a workplace crisis, read about situational crisis communication theory.

crisis communication

 New Call-to-action

Originally published May 9, 2019 8:00:00 AM, updated July 12 2019

Topics:

Crisis Management