Don't rush to judgement when a crisis strikes

When a crisis strikes there is a natural temptation to rush to judgment, especially for any organisation whose product or reputation is at stake.

But it’s a temptation which should be resisted to avoid the risk of false or misleading statements, and?reputational damage.

Take the case of the?luxury yacht which sank off Sicily two weeks ago, with the loss of seven lives. Within days – before local prosecutors had issued their first statement – Giovanni Costantino, CEO of the company which owns the shipbuilder, was blaming human error as the cause of the tragedy.

“Everything that was done reveals a long summation of errors” he declared.

Describing the yacht as “virtually unsinkable” he contended that even in very critical weather conditions, a superyacht like Bayesian would be safe “if procedures are followed.” He said it?was certain that the ship took on hundreds of thousands of litres of water, though he agreed that where the water entered would be determined by investigators.

However, an unnamed spokesperson for the company seemed to be in no doubt, and was reported as saying: “A storm had been forecast earlier, no fishing boats went out and yet the portholes were not shut. The yacht sank because it was engulfed by a massive amount of water through open portholes.”

But as the local Chief Prosecutor said: “Media timing is completely different from that of a prosecutor. We need a minimum amount of time to come to a proper scientific conclusion.” The officials said why the yacht sank so fast could not be confirmed until the vessel was recovered, and that is not expected to even start until October.?

While it is understandable that the shipyard CEO was keen to praise the strength and safety of his vessels, blaming human error was undoubtedly premature. And he seemingly offered no message of sympathy for the victims or their families, commenting most unhelpfully: “those poor people ended like mice in a trap”.

Of course, Giovanni Costantino isn’t the first executive keen to blame others when a crisis strikes.?Consider former Boeing CEO Dennis Muilenburg, who?partially blamed aircrew after two 737-Max 8 aircraft?crashed, killing 346?people.?He asserted the pilots did not “completely follow” emergency procedures, and that there was no “technical slip or gap” in the design of the planes.

The American Airlines pilots union later said it was “inexcusable" for the CEO and others at Boeing to point the finger at foreign pilots. “Shame on you,” their spokesperson said. “That’s a poisoned, diseased philosophy.”

Despite the CEO initially insinuating pilot error, the aircraft were grounded for two years and Boeing was required to upgrade software, systems and training before they returned to service. Lawsuits and investigations reportedly cost Boeing $20 billion, and the US Justice Department eventually announced the company would have to pay $2.5 billion in compensation and penalties.

Another lesser-known CEO who tried to assign blame after a crisis was Edward Burkhardt, Chairman of the Montreal, Maine and Atlantic Railway. One of his company’s trains, loaded with petrol, ran out of control downhill in 2013 and virtually destroyed the small Canadian town of Lac-Mégantic with a fireball that caused 47 deaths. ?He failed to show genuine sympathy for the victims and immediately tried to blame fire-fighters and company employees for the disaster. Forbes called him “clueless as well as careless” and Bloomberg dubbed him "Canada's public enemy No 1".

The official inquiry found no one single person or factor to blame, and said the railway had a weak safety culture and no functioning management system to manage risks. Facing massive losses,?lawsuits and a huge cleanup?bill, the company later sued for bankruptcy and was sold.

The crisis lesson here is clear. Take time to express sincere empathy rather than rushing to point the finger and risk creating needless damage to reputation.

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