Crisis management: How Hilton handled mold PR

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http://www.bizjournals.com/pacific/stories/2002/08/05/story4.html

August 2, 2002

Crisis management: How Hilton handled mold PR

Steve Jefferson Pacific Business News

In 24 hours, hotel executive Schall thrust his company into a

spotlight most executives dread.

By the end of the day on July 24, he had met with guests in 71 rooms, the

state Department of Health, a labor union, 900 employees and seven news

organizations to reveal that his newest tower -- a $98 million project --

was breeding a potentially dangerous mold that was out of their control.

Experts say he did well: Hilton's is a lesson from which all businesses can

benefit.

" We want to be proactive in everything we do to alleviate any type of

speculation or misconception and any kind of inaccurate information that

confuses the public and our employees, " said Schall, senior vice president

and managing director of Hilton Hawaiian Village Beach Resort & Spa.

But not everyone is impressed with the way Hilton has handled its public

relations.

" If this is how Hilton does PR, I would be very concerned for their

stockholders, " said Gill, financial secretary-treasurer of the Hotel

Employees Restaurant Employees Local 5 union, which is in labor negotiations

with Hilton. " They've done nothing to build confidence with us. "

For example, the union found out about the mold from one if its members, not

from Hilton.

" We were preparing an information request when we found out there were

dozens of rooms closing down, " Gill said. " [schall] assured us we'd be

in the loop for everything, but two days later but two days later they had a

press conference when they revealed the species of the mold and we had to

find out from the press. "

" Hilton had admitted they got a subcontractor in May, yet they told the

world they discovered this in June, " Gill said. " Hilton has a bit of a

credibility problem here. And it's not helped when they trot out a

handpicked expert who is unwilling to submit his methodology to a peer

review. "

Much of the trust during any crisis is established in the first few hours of

going public with a problem that many lawyers might advise to bury, said

Rene A. Henry, author and consultant on crisis management.

The natural inclination when something goes bad is to clam up and hope it

goes away -- a recipe for disaster, he said.

" Attorneys would say `no comment,' but that's like waving a big red flag

saying `I'm guilty'! " he said.

Schall said concern about litigation was not an issue when the hotel decided

to go public.

" We went forward because there is a concern for our employees and our

guests, and we did not want them to be exposed to an issue we have

discovered that needs remediation, " he said.

That's smart, Henry said.

" The first thing I say is accept responsibility and admit what's happening, "

Henry said. " If you say it's your fault and there are any victims, it's not

against the law to show remorse, sympathy and compassion. When any

organization does, they'll at least get the public trust. "

Besides, it's the right thing to do, Henry added. Not only will it greatly

reduce the risk of litigation, but being forthright and compassionate will

help a jury side with the company in court, according to Jim Lukaszewski,

chairman of the Lukaszewski Group Inc., a national management consultant

company that specializes in crisis communications.

" It's the single most important issue to a jury, " he said. " If our side

comes off as arrogant and unfeeling, that jury will tear our butt into a

million little pieces and put a dollar sign on each one. "

Health issues, such as the mold problem Hilton is facing, are the most

tricky to navigate and require a solid plan and an unwavering helmsman, he

said.

" Those affect us more personally and the most emotionally, " Lukaszewski

said. " If it is an issue that is going to create victims, people are going

to be concerned. "

For incidents that can create victims, it's vital both to find as many

victims as possible and to understand the psychology involved, he said.

Being a victim is really a self-designation that someone may choose to use

to define himself, Lukaszewski said. They will assume that role as long as

they feel like victims and will stop only when they decide it's over.

Victims require three things, the lack of which undoubtedly will lead to

litigation, he said.

" The first is acknowledgment; if you fail to acknowledge them, this is what

causes people to go find lawyers, " he said. " Secondly, they need a platform

and an audience to tell others and to warn what victimized them. The third

thing they need is evidence that whoever created the situation is taking

steps so it will not happen to someone else.

" Early on, they don't sue, they spread the alarm, " he said, so it's

important to acknowledge as many as possible as soon as possible.

" Holding lots of meetings is a very good thing, " he said.

Schall said he'd do it the same way again and recommended that his peers do

the same.

" I believe that if any company should discover any issue, they should

immediately step forward and inform the public and [tell about] the steps

they are planning [in order] to keep any exposure to an absolute minimum, "

he said. " When you discover a potential health issue, the sooner you take

steps to remediate it, the sooner you can solve them. "

WEB EXCLUSIVE:

There are seven steps a company should take to regain public credibility

after a damaging situation:

Candor: Outward recognition, through promptly verbalized public

acknowledgment (or outright apology), that a problem exists; that people or

groups of people, the environment, or the public trust is affected; and that

something will be done to remedy the situation.

Explanation (no matter how silly stupid, or embarrassing the problem-causing

error was): Promptly and briefly explain why the problem occurred and the

known underlying reasons or behaviors that led to the situation (even if

only partial, early information is available). Also talk about what you

learned from the situation and how it will influence your future behavior.

Unconditionally commit to regularly report additional information until it

is all out or until no public interest remains.

Declaration: A public commitment and discussion of specific, positive steps

to be taken to conclusively address the issues and resolve the situation.

Contrition: The continuing verbalization of regret, empathy, sympathy, even

embarrassment. Take appropriate responsibility for having allowed the

situation to occur in the first place, whether by omission, commission,

accident, or negligence.

Consultation: Promptly ask for help and counsel from " victims, " government,

and from the community of origin -- even from your opponents. Directly

involve and request the participation of those most directly affected to

help develop more permanent solutions, more acceptable behaviors, and to

design principles and approaches that will preclude similar problems from

reoccurring.

Commitment: Publicly set your goals at zero -- zero errors, zero defects,

zero dumb decisions and zero problems. Publicly promise that to the best of

your ability situations like this will never occur again.

Restitution: Find a way to quickly pay the price. Make or require

restitution. Go beyond community and victim expectations and what would be

required under normal circumstances to remedy the problem. Adverse

situations remediated quickly cost a lot less and are controversial for much

shorter periods of time.

Source: http://www.e911.com/exacts/EA066.html