Lessons Learned from Crisis Management.
Background
In January 2018, Swedish giant H&M faced a crisis by releasing a photo of a black child wearing a top with the words “coolest monkey in the jungle” on it. The image was widely criticised for its racially insensitive messaging. The controversy quickly went viral, with widespread condemnation of H&M’s communication strategy and handling of the situation.
Effects
The fallout was swift and severe, with H&M facing widespread boycotts and protests, with some people even vandalising H&M stores in response. Financially H&M saw:
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- Net profit drop 61% – from $1.9 billion USD in 2017 to $0.7 billion USD in 2018.
- Share prices fall by 4.6%.
- Market value declined by billions, costing up to $4 billion in lost market capitalisation.
Lessons Learned
Culture and Context – In a diverse and globalised world, crisis management exists when companies are equally mindful of the cultural context in which their products are marketed – that colleagues and customers have different cultural communication and management styles.
Planning and Preparation – Some criticised H&M’s response to the crisis for being slow and insufficient, which may have exacerbated the damage to the company’s reputation. H&M failed to anticipate and mitigate the potential risks – avoiding a crisis is crisis management.
Power of social media – The crisis was fuelled by social media outrage, and H&M’s response was widely criticised for being tone-deaf and insensitive. Knowing your stakeholder’s social media usage, monitoring brand sentiment, creating a more culturally diverse social media management team, and prioritising transparency will all enhance the message when delivered.
Change takes time – The hoody crisis was not the first culturally sensitive controversy – and not the last. 2015 saw insensitive headwear released, while 2019 saw further accusations of racism in online advertising. Crisis competence takes time – built on principles; training should be focused on creating a culture of shared understanding to enable collaboration in response.
The Murphy Way
Communication is vital during a crisis and a golden thread before and after for engaging stakeholders and engendering trust before it is needed. Using the Murphy platform, you can create a common understanding of the message and the communication strategy, empowering your communications team with the information to inform.
1000s of users from all sectors and levels already signed up for Murphy. From individual administrations to national authorities, small privately held companies to multinational groups and NGOs. Sign up free today and take a look at Europe’s fastest growing Crisis Management Platform.