Now, in the form of Target’s CEO, we know [again] the cost of bad crisis management.
President and CEO Gregg Steinhafel lost his job yesterday.
Could anyone have handled Target’s credit card breach effectively? Maybe, maybe not. But that’s not the point. The point is that bad crisis management will ax the CEO. Decent crisis management might keep him or her around. Effective crisis management will make the CEO a superstar.
Look at the sendoff Alan Mulally got at Ford last week. He beat the crisis.
Here’s what the AP reported about Target:
The departure suggests the company is trying to start with a clean slate as it wrestles with the fallout from hackers’ theft of credit and debit card information on tens of millions of customers. The company’s sales, profit and stock price have all suffered since the breach was disclosed.
Otherwise, things are great.
Surely Steinhafel will not be filling out any unemployment insurance forms soon. He’s been with Target for 38 years and he can afford to shop at Tiffany’s, Bergdorf’s and Neiman Marcus if he doesn’t want to walk in to a Target store ever again.
So we won’t cry for him. But let’s look at the mess he and Target suffocated in and what it might have done better. First, it waited way too long to announce a problem. A lot of companies and CEOs don’t want to say they stepped in dog doo. But if they’d announced the hack when they first found out, a lot of people could have avoided problems. Would Target sales have suffered? Yes, but they did anyway and may have suffered worse for the delays.
Next, Target failed to fix the problem. My IT knowledge peaks right before I pick up the phone to call EMA’s IT department. But Target needed to spend the money and fix the problem, yesterday. Instead, it lingered for months.
And, finally, no one stood up — this is for all you CEOs out there — and owned the problem. Why? Because maybe Steinhafel was worried it would cost him his job. Well guess what.
If he’d acted immediately, informed his customers, limited the problem, fixed it and been out front on the fix, the transparency and the speed, he might be enjoying a 40th anniversary with the company.
The content of this blog is about crisis management and mismanagement in a digital age. It originates with Steve Bell, who spent 30 years as a journalist for the Associated Press and in four top editor positions at The Buffalo News. He is now Partner/Director of Public Affairs and Crisis and Reputation Management at Eric Mower + Associates, one of the nation’s largest independent advertising, integrated marketing and public relations agencies, with seven offices in the East. Learn more about EMA at mowerpr.com/crisisready. Steve’s blog is based on his own opinions and does not represent the views or positions of Eric Mower + Associates.