Rolls Royce

Jaques on Qantas/Rolls-Royce situation

Since starting this blog, I’ve enjoyed an ongoing dialogue with Tony Jaques, a Melbourne-based issues and crisis expert.  Tony read my posts on the Qantas A380 situation from last November and told me he’d keep me posted on local updates.

Last week, Tony forwarded his update post and granted permission for me to re-post in its entirety, below.

Rolls Royce shows silence in a crisis is no virtue

Posted on April 1, 2011 by managingoutcomes

Ever since the near-disastrous Qantas A380 engine fire off Singapore last November, engine-maker Rolls Royce has been doggedly pursuing a policy of little or no public comment.

No doubt they have their reasons – including the advice of nervous lawyers – yet it is increasingly clear that the policy creates major problems for the company.

On ABC Television’s “Four Corners” this week, the shortcomings of Rolls Royce engine construction came under brutal scrutiny.  But so too did the silence of the company in the face of an undoubted corporate crisis.

Qantas CEO Alan Joyce was unambiguous right from the beginning about where the fault lay.  Even with the investigation barely under way he blamed Rolls Royce. The following extract from the Four Corners transcript is very telling.

SARAH FERGUSON: Did you then expect that Rolls Royce would go into the public arena and talk about their role in the event?

ALAN JOYCE: We did. We were asking Rolls to make statements, to get out there, so it was a continuous process.

SARAH FERGUSON: At their engineering headquarters in Derby, Rolls Royce refused to make any public comment. Their version of damage control was to say nothing.

ALAN JOYCE: We were not happy with the way they handled the public relations around this. Rolls Royce’s PR strategy was that they were better not communicating to the general public. They believed, and they honestly believed, that BP made a mistake in being out there in the public. We believe BP made a mistake by saying the wrong things in the public. Our view was that we had to be continuously out there with the facts and information.

Now, it is obvious that we will never know what private conversations have taken place within Rolls Royce. And it is equally obvious that Qantas has a major financial stake in the issue.  After all, Qantas is suing Rolls Royce for $80 million and the airline’s insurers are trying to recover $150 million from the engine-maker for the damage to the plane.

However, despite lawyers arguing to the contrary, experience shows the “no-comment strategy” seldom works when corporate reputation is on the line.  And in this case, reputation is everything.

In one of the most famous motor car advertisements of all time, David Ogilvy coined the brilliant headline: “At 60 miles an hour the loudest noise in this new Rolls-Royce comes from the electric clock”.

When you are building a luxury car silence may be a virtue.  But when you are facing a major crisis, silence serves only to heighten suspicion and concern.

If you have thoughts on this situation, I’d love to hear them.  Use the comments section, below.

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