Steve Jobs Gets an 'F' in Crisis Management 101

Last Updated Jul 20, 2010 11:30 AM EDT

Steve Jobs Fails Crisis Management 101The three elements of effective crisis management are:

1. Own up to the problem.

2. Make things right.

3. Let everyone move on.

At Friday's Apple iPhone 4 press conference, Steve Jobs failed two of the three elements of crisis management, and in spectacular fashion at that. Oddly, had he cut out most of the presentation - the defiant and defensive stuff - shown even a little humility, and left everything else the same, he would have passed with flying colors.

It's surprising, really, although it does demonstrate how a CEO's pride and hubris can negatively affect his otherwise sound judgement. Here's an explanation of the three elements and how Jobs managed to get an F grade in crisis management handling the iPhone 4 reception issue:
1. Own Up to the Problem
That means be honest about the problem, which, and this may come as a surprise to some people, does mean admitting that there is a problem. Also, if you didn't respond quickly enough, tried to cover things up, or did anything to make things worse, you need to own up to that too. Trying to make your customers feel like dopes by saying, "Just avoid holding it in that way," as Jobs did, definitely falls into that category.

Most of the conference was spent railing about why the problem isn't really a problem at all. By that logic, it must have been a media creation, right? No news flash there. Still, call me crazy, but I'm not sure I would have called a press conference to tell the press that.

But wait, the conference actually came about because Consumer Reports wouldn't endorse the product. Then I guess it really was a problem, right? If so, that brings us back to the whole "own up" thing. Either way, Jobs screwed up. There was no owning up, no admission of fault, either with the product or how they handled it, and certainly no humility.

Defiantly saying, "We're not perfect" and then going on and on about how all your competitors are not perfect either does not qualify as humility. Nor does a half-assed apology during Q&A.

Grade: F
2. Make Things Right
That means 1) doing whatever you've got to do to make things right for customers that were harmed or inconvenienced and 2) actually fixing the problem, assuming there is one.

Here's some good news. As I predicted in Apple iPhone 4 Press Conference: What to Expect, they:
  • Didn't recall the product. That would have been dumb.
  • Gave away the bumpers.
  • Allowed for returns with no restocking fees.
They're definitely making things right for their customers. They did, however, leave the whole "fixing the problem" thing a little open-ended, and for that, I'm taking their grade down a notch.

Grade: B
3. Let Everyone Move On
Once you've admitted to the problem, made it right, and fixed it, that should, in theory, allow everyone to just move on to other things that, presumably, don't include bashing your company all over the internet and god's creation.

Instead, "calling out" every single one of your competitors by taking pot-shots at their "reception problems," essentially forcing them to respond, and creating front-page stories like --
-- is not what I would call "letting everyone move on." It is, in fact, exactly the opposite of that.

Moreover, it hands competitors and every salesperson who can utter a sound-bite a silver bullet: "The iPhone 4 has an external antennae and that's bad for reception." Whether it's true or not, doesn't really matter, it's a great sound-bite and sales people will use it liberally.

Grade: F
Is the iPhone 4 still a great product? Sure. Does Apple make great products? Sure. Is Steve Jobs a brilliant marketer and CEO? Sure. But in my Crisis Management 101 class, he gets a big fat F .

Image courtesy CNET, Credit: Josh Lowensoh

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