What can small business learn from the PR missteps made by companies such as Toyota, BP and Goldman Sachs?

But it’s not just companies that have had to deal with brand defense. People like Mel Gibson, Tiger Woods and Lebron James have also been under fire for negative PR. Associations, too, like mining and the egg industry have all joined the ranks as entities fighting to save face.

The important thing to remember here is that just because you may be a small business or even an entrepreneur, companies and entities or every size are at risk of losing PR credibility when something goes wrong – in a big way.

If we look further at the three companies (Toyota, BP and Goldman Sachs), many experts agree that there were several bad PR  moves (very similar in nature) that played a big role in the PR process. All three companies didn’t act fast enough, they hid behind something without immediately accepting responsibility, and they were quick to point the finger at someone else.

It’s a common strategy for larger companies (mostly publicly owned ones) to do any combination of these three because they think it will save their stock price. To be fair, smaller companies typically do not have to worry about a stock price.

But the ultra important thing to keep in mind is that in all three cases, they ultimately (in the end) stood before the public and apologized, accepted responsibility, and made important strides to correcting their course. So what’s the lesson here? Simple. No matter how small or large you are, you’re going to have to accept responsibility, apologize and make corrections. So you might as well be quick to doing so.

But why?

In every case, the media plays an important role (which is why 99.9% of the time the scenario falls under the category of being a PR problem). The media is a natural system of checks and balances. They ask the tough questions and demand to know what happened, who’s responsible and what’s going to be done to fix the mess. Factor in the social media phenomenon and you have a breeding ground for checks and balances since you now have hundreds of millions of individuals all across the globe with the ability to be their own media source.

A small business in a small town may not have the same clout as a global operation such as BP. But if someone, anywhere, has been wronged by a company of any size, the story now has the possibility of getting out of control in a big way. For a small business this can be even more costly than a large company because people who’ve never heard of you now have the bad situation as their first impression of you – a branding scenario that’s much more difficult to reverse after the fact. Despite all the good PR you’ve accumulated (hopefully via advice in The PR Toolkit), it can easily be wiped away in a crisis.

A Bad Situation Made Worse

Tony Hayward, the embattled former CEO of BP who was at the helm of the company during the Deepwater Horizon oil spill in the Gulf of Mexico, is a classic example of someone making a bad situation even worse. Mr. Hayward tried to do the right thing. He immediately descended upon the Gulf region trying to show that he cared. It’s when he opened his mouth that he caused the situation to get even uglier for BP.

In speaking to reporters about the spill, Mr. Hayward let down his guard and tried to sound like a human being rather than continue to hammer home carefully planned “corporate speak” from a list of approved talking points. Unfortunately, he let down his guard a little too much when he was quoted in saying he couldn’t wait for the Gulf to heal so that he could get his life back. Unfortunately for Mr. Hayward, this didn’t sit well with the families who had lost 11 hard working oil rig workers in the fatal accident. His comments came off as cold and insensitive, and were played over and over in the news media on newscasts and even late night television shows.

It didn’t end there for Mr. Hayward.

Companies, individuals and organizations appear before Congress for testimony when there is need to seek answers and truth. From baseball players accused of taking steroids and performance-enhancing drugs to companies such as BP and Toyota, top executives are summoned to appear before Congress to answer questions. Sometimes these executives are summoned from all over the world.

Executives have two choices when they appear before Congress – they can either appease their lawyers and say they knew nothing, or they can appease the American public and talk about what went wrong. In Mr. Hayward’s case, he amazingly knew very little despite being the CEO for several years. These Congressional testimonies are played on live television and have delivered some large ratings in the last few years because Americans are hungry for answers. The bottom line is, if you take Mr. Hayward’s approach it won’t get you very far in fixing your PR problem.

In Toyota’s case, they were seen as a much more feel-good company than BP pre-crisis. It’s easy to love a company that’s known for making great cars at even better prices, than a company known for making billions each quarter on sky-high fuel prices. But Toyota’s PR fell apart when it became obvious that they put the lives of millions of people in danger. Worse, they knew about problems with their cars for years and tried to downplay – even hide – the problem and reports, until it was too late and out of control.

Although Toyota had millions of fans pre-crisis, it didn’t help that their crisis occurred at a time when the American auto industry was at a rallying point and plenty of pro “Buy American” people were just waiting for Toyota to finally fall.

As one Merrill Lynch PR executive told The New York Times, it’s easier for people to forgive a company trying to make an effort to achieve forgiveness than it is to forgive a company trying to create a cover-up.

Almost worse than the cover up was the fact that Toyota’s secondary strategy seemed to try and blame the drivers for the accidents. Catch phrases like unintended acceleration and pedal misapplication became popular as the company incorporated into daily talking points and press release updates. This strategy certainly didn’t sit well with many people even though reports began to surface that some drivers may have been at fault.

Ultimately, small businesses and entrepreneurs need to know they’re not immune to bad PR. The act of waiting until the storm blows over either through stonewalling, lying or flat out denying is simply bad company policy. And even if you’re not on the radar of 60 minutes or the NBC Nightly News, social media today puts you on their radar even if you bake cookies in a little town.

John Sternal is co-founder of UnderstandingMarketing.com and has counseled companies large and small on their PR strategies. Contact John (John at UnderstandingMarketing dot com) and ask him a question about your small business PR.