Rolls-Royce Tries Quiet Crisis Response
There is strong consensus across the PR industry for an approach to crisis management that emphasizes proactive outreach, transparency, visible resolution and executive presence. But not all companies subscribe to that strategy. Witness the recent crisis involving Rolls-Royce – whose fiery engine failure on a Qantas jumbo jet forced the airplane to make an emergency landing.
In the face of intensive global media coverage – and speculation on the cause of the engine failure – Rolls limited its initial response to two terse written statements (buried in its website) which essentially said it was looking into the problem. The tone and content of the statements is very much “stiff upper lip”: factual, low-key and devoid of any emotion or empathy. Written by and for engineers. Almost as a after-thought – literally the last sentence of the statement – the Rolls memos assure readers that safety remains the company’s highest priority.
The muted response from Rolls is in stark contrast to both Qantas and Airbus – who built the A380 jet involved in the emergency. As reported by the Wall Street Journal in this article, the Qantas CEO followed the standard airline playbook by being front-and-center in several news conferences and discussing progress in the investigation. Airbus, for its part, put the ball squarely back in Rolls’ court and said it was delaying further A380 deliveries until the engine problem was fully addressed. At the same time, Airbus continues to promote its products and track record through a considerable marketing effort.
Some experts quoted in the media suggest the key to a positive resolution for Rolls is finding an explanation and quick solution to the engine problem, rather than a vigorous public outreach. Rolls’ brand reputation, they posit, is based more on quality and customer service than on any public profile. Other observers say Rolls prefers a robust behind-the-scenes approach that focuses on identifying and fixing problems (and working with partners) rather than providing a stream of public commentary. In other words, the quality of the products and customer service will ultimately protect the brand equity. As one pundit puts it: they have been here before and their approach is “this will pass.” One interesting theory is that Rolls executives became even more gun-shy about public announcements in the wake of the universal criticism of BP executive Tony Heyward. Finally, it’s worth noting there is a fundamental difference between Rolls and Qantas, in that the former sells to companies while the airline interacts directly with customers. It’s a natural tendency for B2B companies to focus on direct communication with their corporate customers than through the public.
Has the Rolls approach worked? It may be too soon to tell, but on one short-term metric – share price – they have failed. Reports this week in several major news outlets – including this one – suggest uncertainty from the crisis has wiped out 10% of Rolls’ share price, or about $1.5 billion of the company’s value.
Though there is merit on focusing on thorough investigation and resolution during a crisis rather than self-serving media activities, Rolls fails to recognize that the debate on its brand and products is now occurring in the public arena. The company’s reluctance to engage in dialogue is creating a vacuum others are only too happy to fill. It is also naive to hide behind the cloak of engineering prowess and focus on direct outreach to corporate customers, since B2C companies like Qantas will certainly consider consumer opinion and brand reputation when selecting their equipment partners. Another lesson some companies have learned the hard way in recent years is that brand reputation is ephemeral – even one with a rich history like Rolls-Royce.
Ultimately, Rolls’ unwillingness to share information and engage in conversation suggests a sense of arrogance and stubbornness that is totally out of sync with prevailing trends on communication and consumer interaction. It will be interesting to see how this all turns out for the major players.
Posted on 19 November 2010 by Bernie Charland
There are 1 comments relating to this blog post.Swissss.com says:
19 November 2010 at 12:36:25
My guess is that their customers (the airlines) are 'engaged in conversation' daily. As a flyer, do I associate the issue with RR or my airline? The airlines need to engage with the public and reassure them. RR need to get on and fix the problem, and maybe not add fuel to the PR fire. Or perhaps they are just being very 'stiff-upper-lip' - a key behavioural trait of the RR brand.
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