As a continuous student of crises, it still amazes me when companies don’t learn from their peers’ mistakes. When the egg recall crisis began this past summer, I wasn’t at all surprised to find notorious Don Decoster, owner of the egg farm currently under investigation, in the headlines. He ran a scandal-plagued chicken farm in Maine that I covered in these pages back in 1997, questioning whether the Decoster brand would survive. It hasn’t in fact­—the Decoster brand disappeared shortly thereafter, replaced with a series of benign sounding corporate brands.

So, when the seemingly invincible Target brand was tarnished by a $150,000 political donation to anti-gay conservative Minnesota gubernatorial candidate Tom Emmer, I was stunned. Up until this summer, Target has managed to avoid all the anti-big box controversy that plagues its rival Wal-Mart by essentially following the classic crisis avoidance rule: don’t do stupid things, and if you do and get caught, do something to make it right. Through corporate donations and policies, Target has cultivated a hip, gay-friendly image, and the donation was inconsistent with that image.

Adding fuel to the fire, the donation was the most visible early test of last winter’s controversial Supreme Court ruling that allowed corporations to be treated as citizens. While Target quickly saw the error of its ways and issued an apology, in this case, “we’re sorry” wasn’t enough.

Target customers turned to their social networks to get the word out, with nearly 100,000 people becoming fans of multiple Boycott Target pages on Facebook and some 1.3 million watching the “Target Ain’t People” YouTube video. Protesters demanded that Target either take the money back or donate an equal amount to a progressive candidate. It did neither, and this lack of any action has tarnished the company’s reputation permanently.

This corporate amnesia of successful crisis mitigation happens so often that I’m actually surprised when a company actually does something right. So when PG&E not only apologized, but immediately set up a $100 million victim relief fund after a 30-inch gas pipeline exploded in a suburb of San Francisco, I was amazed. Back in the day, when I was covering the utility for the San Jose Mercury, the company was notorious for its “no comment” policy with the media. This time it immediately took to Twitter to get the word out and answer questions, following up its initial crisis mitigation strategy (we’re here, we’re answering questions, we’re concerned and we’re investigating) with the bold action of proactively setting up a “rebuild San Bruno” fund. Just goes to show you that in this topsy-turvy communications world, good guys can be bad, and bad guys can learn from others’ mistakes. PRN

CONTACT:

Katie Paine is founder and CEO of KDPaine & Partners, a communications measurement agency. She can be reached at [email protected].

Image Patrol Tables

Target

Criteria	Grade	Comments	Advice
Extent of coverage	D	It could have been worse. While the national papers picked up on the story, coverage was relatively short-lived. Most of the viral boycott activity was online. However, the fact that this was the first case of a corporation taking advantage of the Citizens United Supreme Court decision ensured that the crisis got more than the usual level of coverage.	There are no lines between traditional and social media anymore, so assume that whatever is online will appear in traditional media and vice versa, although the intensity may vary by medium.
Effectiveness of spokespeople	D	Target CEO Gregg Steinhafel wrote an apology to employees that was both self-effacing and ultimately ineffectual. He needed to do more than just apologize and then leave the scene.	Apologies alone are no longer sufficient to assuage an angry flash mob. Consumers, employees and now investors expect more than just words when a CEO makes a mistake.
Communication of key messages	C	This is the one area in which Target had some success. Most of the coverage included statements about Target’s long-standing support of the LGBT community and its long history of good works.	The one silver lining in a cloud of controversy may be the length of time in which you have the attention of the press. In this case, Target used it wisely to make sure that reporters had a good understanding of the company’s culture.
Management of negative messages	F	While the company’s explanation appeared in stories surrounding Steinhafel’s apology, it was subsequently lost in coverage of angry consumers. As a result, all the negative messages about the boycott dominated the most recent news.	Just because the CEO has issued an apology doesn’t mean that the problem has gone away. Social media and search ensure that a crisis can linger even after the national media has moved on.
Impact on stakeholders	F	Three management firms that collectively hold $57.5 million of Target stock have asked Target’s independent board members to undertake a comprehensive review of Target’s political contributions. The stock price is only now recovering from the plunge.	Institutional investors are on Facebook, too, and they are just as easily spooked by a blog post or a Facebook thread as they might be from an article in the Minneapolis Post.
Overall score	D	Target’s reputation will no doubt survive, but its brand will be dragged through the mud until after the election unless they take action to counter the objections.	If corporations act like citizens they can expect to be treated to all the same mudslinging and attacks that individual candidates suffer. If you make sizable contributions to candidates, expect sizable repercussions.

PG&E

Criteria	Grade	Comments	Advice
Extent of coverage	F	When one of your pipelines sends a plume of fire 1,000 feet into the air that is visible from one of the busiest airports in America, it’s hard to keep a lid on the news. What is most interesting is that many of the details were on Twitter long before they made the local news, presumably provided by local residents with cell phones.	When the news is front-page headlines around the world, there’s not much you can do but keep on top of it, preferably monitoring your Twitter search feed on a minute-by-minute basis.
Effectiveness of spokespeople	A	PG&E spokespeople were out early and often doing damage control and emanating care and concern for victims. The $100 million victims’ compensation fund backed up their words with solid action.	The closer the link between words and deeds the better. The fact that it was just a matter of days between the explosion and when the fund was set up did a lot to enhance PG&E’s credibility—unlike BP, which appeared to drag its feet.
Communication of key messages	C	While PG&E was on the scene and expressing concern, after a few days the major message seemed to be that the utility had old and failing gas lines that were badly in need of replacing.	In today’s crises, the truth from everyone’s perspective is just 140 characters away. A corporation can say whatever it wants, but if residents can just as easily say, and prove, the opposite, you end up with mixed messages and a damaged reputation.
Management of negative messages	C	While it took a few days for the negative messages about PG&E’s deferred maintenance to surface, they will be repeated for months to come as investigations are launched, fingers are pointed and blame assigned.	The shelf life of a negative message is as long as anyone, not just the media, is following the story. So a resident of the area, a competitor and anyone with an agenda can keep the story going these days. Prepare for a long haul in any case.
Impact on stakeholders	D	Given the plunge in the stock price the day after the explosion, shareholders are nervous. My guess is that the stock won’t recover until the blame is apportioned.	The best approach with stockholders is to keep them informed at all times. Remember that they’re just as likely to be on Twitter as your customers.
Overall score	C	Under the circumstances, PG&E is managing the crisis as best as possible. But like BP, a great deal depends on the outcome of investigations and the apportionment of blame.	If nothing else, this particular crisis teaches us to use all and any media available to keep the public and all stakeholders informed.