Crisis management or poor planning?

​Here’s a question for corporate leaders: When is a crisis not a crisis? FT management editor, Andrew Hill, pours cold water on the crisis management culture and its consultants.
Paul Lewis
May 22, 2017

True, there are genuine crises—an unheralded event such as the Fukashima nuclear accident or a response to sectoral disruption, as faced by Nokia—but ‘genuine internal crises came around about once every 15 years’ says one CEO. Corporate leaders have ‘fetishized’ crisis management, partly because of the appealing idea that a crisis always represents an opportunity – though mainly for crisis management specialist. They have ‘an interest in fostering a nervous sense of constant uncertainty,’ Hill writes, aggravated by the concept of never-ending disruption.’ Worse, some ‘managers assume they must foment a sense of crisis to get anything done.’ Too often, it’s just ‘an easy excuse for self-inflicted failures.’

Whether James Quincey, the British born 51-year-old new CEO of Coca-Cola, turns to crisis mode will be an interesting test case, given the challenges the company faces. According to the FT’s Monday Interview, these include: refocusing on its core function of developing and marketing drinks rather than distribution; consumer pressure for greater variety and nutrition; regulator pressure to tax sugary drinks (which represent three quarters of Coca-Cola’s sales volume); and falling sales as a consequence of less thirst-inducing online shopping.

Perhaps most challenging is repositioning a brand that for decades has been a byword for US-led globalisation. Once a brand leader, Coca-Cola has slipped to 27th over the past decade, according to BrandFinance rankings, and its share price has underperformed that of its rival PepsiCo. ‘A brand has to stand for something’ says Quincey. But the backlash against its Super bowl adsuggests that not everyone agrees with the company’s message of inclusivity and diversity. Like many other big companies, Coca-Cola was also caught in a political cross-fire during the presidential election. On the one side, there are important policy areas, such as an anti-obesity drive, where government relations is vital; on the other side, many anti-Trump consumers want the company to distance itself from the new administration.

Paul Lewis

Editorial Director at Headspring