When crisis unfolds, it is not the event itself that counts. It is the response.
And while the strength of Facebook’s response to the recent Cambridge Analytica scandal has been disputed around the world across conference rooms and dining rooms alike, one thing remains irrefutable- there are no signs that Facebook’s profitability was hit by the scandal that exposed the misuse of up to 87 million users’ personal data.
Facebook reported an increase in both profits and users last week, as Facebook Inc. shares subsequently rose.
“Facebook…..has demonstrated for several quarters how resilient its business model can be as long as users keep coming back to scroll through its News Feed and watch its videos” wrote Reuters journalists David Ingram and Munsif Vengattil in an article commenting on Facebook’s resiliency in the face of major scandal.
So how has Facebook managed to avoid succumbing to this major crisis?
First of all- they’re spending to be sure their users aren’t scared away by scandal. Facebook CFO David Wehner explained that expenses would increase between 50 percent and 60 percent this year, which marks an increase in prior range from 45 to 60 percent. This increase in spending is for users’ safety and security, according to Wehner, and will endow efforts to eliminate fake accounts, eliminate hate speech and remove violent videos.
Another reason why Facebook has fared so well in light of such precarious circumstances is its crisis communications. Though met with a fair amount of discord, Facebook’s public response to the scandal (led by CEO Mark Zuckerberg) has been perceived as mostly honest and transparent.
“We have a responsibility to protect your data, and if we can’t then we don’t deserve to serve you,” Zuckerberg said in a statement on his Facebook page after news of Cambridge Analytica’s misuse of users’ data began making headlines around the world.
Public discourse shifted favorably towards Zuckerberg after he issued an explicit apology in an interview with CNN: “This is a major breach of trust, and I’m really sorry that this happened”. Oftentimes, the ability to rebuild trust amongst customers is rooted in something as simple as an admission of fault.
When a company is unprepared to handle crisis, even a small predicament can damage that company’s profits, operability and reputation. Yet a company that prepares itself ahead of crisis may have the ability to leverage undesirable events to work in its favor. Instead of frantically reacting to deteriorating circumstances, organizations that are sufficiently prepared will be able to offer timely and appropriate crisis communication to the public and to stakeholders while implementing their pre-designed operational response.
Although it is impossible to plan for everything, organizations can and should plan for crises that are associated with their business’s main functions. To this end- when crisis unfolds- these organizations will be poised to operate proactively in a manner in which they can truly counter undesirable outcomes, as opposed to merely scrambling in attempt to keep things afloat.