Companies have their fair share of mishaps, but how they respond to those mishaps defines them. That’s why crisis communication is important in letting your audience know you are a trustworthy company. After all, “an organization’s reputation is as important as any other corporate asset,” (Ashcroft, 1997, para. 3). So, what is the proper way to respond to a crisis? Let’s take a look at Chipotle’s 2015 crisis.
Between August and December of 2015, Chipotle’s food caused almost 500 people to become ill (Scudder, 2016, para. 12). The illnesses ranged from E. coli to salmonella poisoning, and several of the victims were hospitalized. Chipotle failed to react quickly and made the public aware of the situation after the outbreaks were over. This hurt the company badly and caused their stock to drop by 30 percent (Scudder, 2016, para. 14). In addition, the CFO of Chipotle bashed the media on the topic of the outbreak, which stirred up even more trouble.
In the middle of December, Chipotle finally addressed the problem when their CEO did an interview on the “Today” show. In the interview, he apologized and talked about their plans for safety in the future. These plans did indeed play out when Chipotle closed on February 8 for a national safety discussion (Scudder, 2016, para. 20). Customers could also download a coupon for free Chipotle because locations were closed.
Overall, Chipotle could have handled their crisis better, but they did make an effort to recover from it. According to The Conflict Management Life Cycle, companies should go from being proactive, to strategic, to reactive, and then recover from the conflict (Wilcox, Cameron, Reber, & Shin, 2013, p.172). During the strategic phase, crisis management plays an important role. This is one aspect that Chipotle failed to handle well. Because the company did not address the outbreaks right away, it caused their public trust to go down. They did not plan ahead for the crisis and failed to manage it right away.
Though their failure to react quickly hindered their ability to handle the crisis, Chipotle did handle conflict resolution and the recovery phase well. Because they were open with the public, apologized for the outbreaks, and held a national safety meeting, it showed that they were striving to create change in the company. The fact that they gave away coupons to earn public trust added to the recovery of their image and reputation.
So, what can we learn from how Chipotle handled their 2015 crisis?
- Be transparent. By apologizing and letting the public see that they were at fault, Chipotle was on their way to recovering from the crisis.
- Implement a conflict resolution. Let the public know that you are taking precautions to make sure the crisis never happens again.
- Let your audience know what you value. “When you can articulate your values and act and live in accordance with those values, then you can earn credibility for a reputation of trust,” (Citroen, 2012, para. 12). A company is nothing without trust from the public. Chipotle let the public know that they valued safety when they closed locations to hold a national safety discussion, and it led to greater trust in the company.
Mishaps can define a company. In Chipotle’s case, it damaged their reputation and they may never be the same as they were before. But by being prepared and having a crisis communication system in place, companies can avert going through what Chipotle did.
Ashcroft, L. S. (1997). Crisis management – public relations. Journal of Managerial Psychology, 12(5), 325-332. Retrieved from http://search.proquest.com.ezproxy.gvsu.edu/docview/215863770?pq-origsite=summon
Citroen, L. (2012, Aug 6). How to Repair a Damaged Reputation (Reputation Management). LIDA360. Retrieved from http://www.unleashingyourbrand.com/how-to-repair-a-damaged-reputation-reputation-management/
Scudder, V. (2016, Apr 26). In the C-Suite: Chipotle Mexican Grill’s Rise, Fall and Road to Recovery. Public Relations Society of America. Retrieved from http://apps.prsa.org/intelligence/TheStrategist/Articles/view/11483/1125/In_the_C_Suite_Chipotle_Mexican_Grill_s_Rise_Fall#.WKEua_krK00
Wilcox, D. L., Cameron, G. T., Reber, B. H., & Shin, J. (2013). Think Public Relations. New Jersey: Pearson.