Since the Costa Concordia ran aground last week in Italy, Costa Cruise Lines and its parent company, Carnival Corporation, have seen their reputations and bottom lines suffer severe blows. While a crisis situation could be around the corner for virtually any company, planning for and effectively enacting a crisis response plan can mitigate damage to a company’s reputation and financial ledger.
From the crew’s delayed and fumbled reactions after the ship hit the rocks; the response to the accident has been widely panned by experts and the court of public opinion. With the delayed response by Carnival and Costa Cruise Lines placing blame on Captain Francesco Schettino after knowing that the ship had previously taken a similar route tells me that if these companies did have a crisis response plan, their personnel didn’t know how to implement it. As a result of this disaster, Carnival’s stock price has dropped 10.88 percentsince the accident on top of $93 million in damages the company is claiming.
Plans need to be constantly updated and reviewed. The oil companies learned this lesson during the BP spill in the Gulf a few years ago. When questioned during a Congressional Hearing, it came to light that they were using crisis plans in the gulf that were designed for Alaska and one of the main contacts had been dead for five years.
Companies need understand that the money spent up front in preparation to effectively manage crisis situations is a drop in the bucket to how much they can lose due to a mismanaged effort. Simply put, short term pain for long term gain.
“Xenophon’s vital support allowed the Coast Guard to leverage an unprecedented level of cutting-edge social media venues and technology to reach the broadest audience possible.”