28 October 2016 14:03:32 IST

Crisis? It can’t happen to us!

Unlike this signboard, crises don't warn people. They catch them unawares | Gustavo Frazao/ Shutterstock

We refuse to accept that it might happen to us or our companies. We think we’re above it all

Who would not have read about the boardroom crisis in the Tata Group, even if no one could have predicted it?

Media has gone to town with the issue, as emails are exchanged, controversies are publicised and dirty linen is washed in public, much to the bemusement of the competition and to the absolute horror of people like me — people like me who have been long term admirers of the iconic brand, which epitomised ‘trust’ in the minds of most consumers. And what is the feature of this crisis?

Like other corporate catastrophes, it has caught most people by surprise and reached amazing heights of visibility in just a few hours. After all, media loves a good ol’ fashioned crisis, because nothing helps increase readership and television rating points more than a full blown disaster being played out in front of a large audience!

And yet, many of us refuse to accept that it might happen to us or our companies. “We are above all this,” we believe, till the crisis almost envelops us. Just think back to some of the corporate crises that rocked India and the world, over the last few months, and you will know what I’m talking about.


Two minutes…

Maggi, the two minute instant noodles that fed more hungry Indians than any other noodle brand and left other food names wondering how they’re doing it, lost almost its entire market share in a few months.

It was banned; it went out of the market, licked its wounds, did nostalgia-themed commercials, conformed to statutory requirements, ate the humble pie and came back to being the number one noodle brand.

But in the intervening period, social media kept demonstrating its power and the media kept talking about some deficiency or the other in some regions. The brand kept losing money, even as the consumer realised what an important part of his/her life Maggi was.

The climb back to the top was slow but it did happen due to the intrinsic strength of the brand. Crisis or no crisis, strong brands will eventually prevail.


Mr Reliable no more

Volkswagen, the brand that had occupied the slot for reliability in the consumer’s mind globally, spiralled deeply as the company owned up to fudging its test results to conform to global standards.

Let’s not forget that Volkswagen is a huge global brand with an enviable reputation: its advertising has been top of the pops for ages, with its “Think Small” campaign being rated as the best ad of the last century. And yet, what happened? A crisis, that left the company red-faced, its consumers irate, and stockholders poorer as profits plummeted and cars returned. There was even talk of the German economy floundering. Boy, was it a crisis! And even if the impact in India might have been minimal, consumers were smarting.

Volkswagen Chief Executive Martin Winterkorn attends the annual news conference of Volkswagen in Berlin, in this file picture taken March 12, 2015. Winterkorn resigned on September 23, 2015, taking responsibility for the German carmaker's rigging of U.S. emissions tests in the biggest scandal in its 78-year history. REUTERS/Fabrizio Bensch/Files


So what’s to be done?

Every few months, a crisis seems to rear its ugly head and catch people unawares. And the reaction invariably seems to be — “Why me?”

While one can sympathise with the victim, it must be said that self-pity rarely helps. What does help is preparedness. Remember the old scout motto “Be prepared”? Never has this been more important than in today’s crisis-ridden society, which consists of a rampant social media, self-styled experts, opinionated but ill-informed people who have a twitter handle, and journalists who burst with self-importance anxious to make a reputation for themselves.

How can one be prepared? While it is certainly difficult to anticipate a crisis of the Tata-kind, it is possible to anticipate a few; like a fire, or an accident, or a product failure, or non-conformity to building restrictions, or flouting environmental norms.

And what do smart companies do? They work out possible crisis scenarios with their PR companies and have a contingency plan. They have holding statements ready and designate people who can take charge; they appoint one spokesperson so that multiple points of views are not floating around.

They are quick to respond, and usually do so away from the scene of the crisis. They draw on the fund of equity they have with target audiences at large. Tylenol is a case in point of a company that had served millions of consumers with Johnson and Johnson’s baby products. After the crisis, the consumers forgave them for their aberration but the same consumers had no affinity for Union Carbide, which merely made batteries.

So if you can, build a reservoir of goodwill for a crisis that might strike you at any moment.

Bottom line

If a crisis can happen to the Tatas, it can happen to you and me as well. So let’s hope and pray, even as we scan the environment anxiously for dark clouds that may be hovering around us. Doing business in the world of the internet is tough but the rewards are phenomenal too. Hang in there, even if people consider you paranoid.

And remember: only the paranoid survive!