THE FIRST few days after a disaster can be a make-or-break time for a company’s reputation. What senior executives say and do can worsen the reputational damage caused by the crisis, as was the case for BP following the Deepwater Horizon explosion in 2010, or mitigate it, as Johnson & Johnson did in 1982 when seven people died after taking Tylenol pills that someone had laced with potassium cyanide. The botched communications effort made by Montreal, Maine and Atlantic Railway this week following the crash of one of its trains on July 6th that killed at least 50 people in the town of Lac-Mégantic, in Quebec, puts it firmly in the same class as BP’s response to the Deepwater disaster. Few people instinctively know the right thing to say when the public wants to assign blame for sudden and horrible deaths or a spreading oil slick is threatening livelihoods. But there is plenty of research into what the corporate response should be and lots of public relations firms that are willing to advise on the cardinal rules. Montreal, Maine and Atlantic and its boss, Edward Burkhardt (above), broke so many that Pauline Marois, the premier of Quebec, called their handling of the situation “deplorable”.

What should they have done?

Be visible: Arriving at the scene of a disaster is not an easy time for an executive. But as Lawrence Rawl discovered as chairman of Exxon in 1989 when the Exxon Valdez struck a reef and spewed its oil off the Alaskan coast, waiting a week to comment on the incident and delaying a visit to the site will only stoke public anger. Michael McCain, the head of Maple Leaf Foods, a food-processing company, took the opposite tack in 2008 when people started to die following a listeria outbreak at one of its plants (linked to 22 deaths). He held numerous news conferences, publicly apologised and was highly visible throughout the crisis.

Mr Burkhardt did not arrive in Lac-Mégantic until four days after the crash and although he had a perfectly good explanation (there were company representatives on site almost immediately, he felt he could better co-ordinate the corporate response from Chicago, and he did media interviews from there) the company’s men had kept such a low profile in the disaster-struck town that few people knew they were there.

Accept responsibility: Johnson & Johnson set the gold standard in accepting responsibility, even though the company thought from the beginning that an outsider had tampered with Tylenol tablets (the culprit is still unknown). That didn’t stop it issuing a nationwide recall of all Tylenol, costing it $100m. Jim Burke, its chairman, was named one of history’s ten greatest managers by Fortune in 2003 and the company’s response to the situation has become a casebook study on crisis management.

In his statements to journalists, Mr Burkhardt made it clear that Montreal, Maine and Atlantic accepted some of the responsibility for the disaster, but he complicated the picture by pointing the finger of blame at others, which brings us to the next point.

Just deal with the facts: In the midst of a crisis, the truth of what happened can be elusive and company representatives that stray too far from the facts will be forced to retract them later. Tony Hayward, BP’s embattled chief executive at the time of the Gulf of Mexico oil spill, had to step down because he had tried to minimise the environmental impact, saying it would be “very, very modest” and that “the Gulf of Mexico is a big ocean”. But BP significantly underestimated how much oil was leaking. Its handling of the crisis has become a textbook case in what not to do.

Mr Burkhardt was discredited by blaming the volunteer firefighters in a nearby town of inadvertently causing the train crash by shutting off the engine, thus disabling the air brakes, when they were fighting a fire in one of the engines earlier in the evening. He later retracted that, but laid the blame on the train’s engineer for not setting an adequate number of hand brakes on its 72 railcars. With the investigation still in its early stages, it might have been wiser to stick to the proven facts.

Be sensitive to the local environment: It is often the small things that can set a negative image in stone. Mr Hayward’s thoughtless remark in the middle of the BP controversy—“I want my life back”—made him seem heartless, given that 11 workers had lost theirs in the accident. In that same vein, Mr Burkhardt’s reply to a question about his personal wealth—“A whole lot less than Saturday”—while accurate, was unfeeling, given that he said it within blocks of where perhaps 50 people had died and scores of businesses levelled. His quip about potentially needing a bullet-proof vest prior to visiting the devastated town was equally unwise.

When he finally met the local media in Lac-Mégantic, Mr Burkhardt did not have a translator and conducted the press conference in English, a faux pas in the French-speaking province of Quebec.

Good corporate leaders are expected to delegate. In this case, delegating the response to a public relations firm skilled in crisis communications would have been the right move.



