Reputation Risk and Crisis Management

It may be stating the obvious, but it’s been a messy few days along the Firth of Forth.

Apart from the very serious environmental consequences of the mechanical failure at Edinburgh’s largest sewage treatment plant, there’s the fall out in terms of damage caused to the reputations of two of the biggest names in the water industry.

Sewage continued to pour into the Firth of Forth two-and-a-half days after a pumping station failure.

Scottish Water has apologised for the "catastrophic failure" that allowed millions of litres of sewage to escape.

Saying sorry is the easy part of trying to rebuild a reputation.

For the water company, and its partner Thames Water that operates the plant at the centre of the crisis, there is a very long way to go before public confidence is restored.

And, like so many aspects of the crisis that has unfolded, there are a great many things that remain outside the direct control of the two water companies.

They don’t yet know for example what long-term damage has been inflicted along the waterways and beaches. Nor do they yet know whether any official investigation will result in any legal action.

Those directly involved in this crisis since last Friday afternoon will no doubt have learned a great many lessons already. The likelihood must be that hey will remain on a very steep learning curve for quite a while yet.

Their misfortune may be an extreme example of the sort of crisis any business can find itself in. But it should serve to sharpen the focus of businesses up and down the country.

Things can – and do go wrong. It’s not pleasant when it happens (ask Scottish Water) and it can immerse a company in totally uncharted waters, redefining the term crisis management.

Risk assessment should be an important part of all business planning. Failures like those in Edinburgh are indeed catastrophic, and thankfully on a scale which is extreme. But they serve as a warning of just how badly things can go wrong.

And when they do so on this sort of scale, the aftermath – in this case the very real clearing up afterwards – is likely to be conducted under the eyes and noses of a hostile media pack.

That is when crisis management really is put to the test. And it happens more often that it used to. Remember the recent fatal railway accident in Cumbria in which a new Virgin tilting train was derailed?

The scenes at the crash site clearly left Sir Richard Branson deeply shocked, but when you are linked so closely to a brand like Virgin, appearing in front of the cameras when the news is good or bad comes with the territory.

That’s effective crisis management demonstrated on the Cumbrian fells. Further north they still have a lot to learn, and a lot to clear up before business and confidence can recover.