A Timely Case Study Helps Sharpen Crisis Analysis and Response Skills
9/25/24 – – For many years my office was on 42nd Street just blocks from the United Nations. Unless one of my clients was hosting a related event, I tried to be out of town during the U.N.’s late September General Assembly. With world leaders in town for one week, New York City is even harder to navigate than usual.
This year, Iranian President Masoud Pezeshkian is in town to address the General Assembly. Protesters are filling the streets. I’m a safe distance away in the suburbs, but his controversial presence in the Big Apple caught my attention. I use a similar situation as the basis for a crisis communication case study I present to college students and corporate audiences.
The focus of the case is a predicament faced by Worldstar Hotels, a mythical hospitality company. To sharpen crisis response skills, I ask participants to assume the role of Worldstar’s Chairman/CEO. Given current world tensions, I thought it would be interesting (and fun) to share this case study with you.
Let’s go back to school together. Review the facts that follow and consider your leadership options:
CRISIS CASE STUDY: “No Room at the Inn”
Background
New York’s Worldstar Hotel, located in Midtown Manhattan just blocks from the United Nations, is thrust into the news when reporters at The New York Post learn that the President of Iran will be staying overnight at the hotel in late September. The controversial leader will be in New York to address the U.N. General Assembly.
Once the visit is made public, the hotel’s general manager and operators at the company’s headquarters in San Francisco begin receiving impassioned phone and email complaints, threats of violence and requests by the media for comment. Criticism on social media platforms explodes.
Tension escalates when protesters schedule a press conference in nearby Grand Central Terminal during morning rush hour to protest Worldstar’s display of hospitality to a man they describe as, “an international terrorist and Holocaust denier.” The group will be calling for a boycott of all Worldstar properties (500 branded properties in 50 countries).
Internal and External Pressures Build
During a conference call between the New York property’s general manager and Worldstar senior management, it is learned that the Jewish employees of the hotel — of which there are more than 50 — will not be reporting to work if the Iranian President is welcomed as a guest. They will join picketers scheduled to be demonstrating in front of the hotel and throughout Grand Central during the stay.
To make matters even more difficult, New York’s Mayor has called asking for a meeting to coordinate security, informing Worldstar that he will be joining the picketers to express his outrage as well.
At the same time, calls are received from the United Nations and the U.S. State Department on behalf of the President of the United States, underscoring the diplomatic imperative of providing a welcoming environment in New York for recognized world leaders. The callers point out that the United States and the U.N. are working to sign important arms control and trade agreements with Iran. They stress that New York and its businesses have an obligation to support the United Nation’s mission in every way possible.
This controversy could not have come at a more sensitive time for the company. Worldstar is planning an initial public offering on the New York Stock Exchange in November. The senior management team, including the company’s chairman and CEO, a prominent Jewish community leader, is scheduled to begin an international investor road show in Dubai the week of the Iranian President’s visit to build support for the offering.
Weighing Our Options Under Fire
If you’ve put yourself into the CEO’s shoes, you may be feeling sick to your stomach right about now. Every decision you can make in hopes of returning to a condition of stability will have repercussions with audiences important to Worldstar Hotels.
If you cancel the Iranian President’s reservation, you win the approval of the mayor, the hotel’s Jewish employees and, based on the phone calls to headquarters and the trending conversation online, the American public.
But you will be angering the State Department (and by extension the President) and setting a dangerous precedent as an international hotelier operating in markets throughout the world, including the Middle East. The political and security risks you’ll be assuming may put a serious damper on the IPO you’ve been working on with your underwriters for months.
What Should Worldstar Do?
Over the years, I’ve heard many creative, well-reasoned strategic responses from participants in my crisis preparedness sessions. Don’t feel bad if a perfect solution doesn’t jump into your head. No solution satisfies every audience. That’s true of most crisis responses.
What should be guiding your decision?
Before my classes jump into our discussion of strategic and tactical options, I go to the flip charts or whiteboard and ask the participants to tell me what “first principles” should be guiding our response. I ask about Worldstar’s highest priorities and the company’s most important audiences.
It doesn’t take much time for the class to agree that the hotel’s highest priority is the wellbeing of its guests and staff. Above convenience, great food, responsive service, clean rooms, free Wi-Fi, the good graces of the White House, and even a successful IPO, is safety. That’s hotel management’s first concern every day. And that should be our priority today, despite all the noise. The hierarchy of concerns and priorities we agree upon directs our strategy.
First Principles Define Our Path
Before long, someone usually asks how we, Worldstar Hotels, can guarantee the safety of our guests and staff under these conditions. If the Iranian President checks into the hotel and the threatened protests go forward, the other guests and the hotel itself could be in great danger; not to mention the Iranian President himself, who could be the target of protesters.
Is the NYPD prepared to assure the safety of the people we’re responsible for? Can our own security resources be expected to repel thousands of protestors if they decide to storm the hotel? If despite the threats Worldstar allows the Iranian President to stay and people end up getting hurt, the company would have lousy answers to the media’s predictable questions: what did you know, when did you know it, and what did you do about it?
Nine out of 10 seminar participants arrive at the conclusion that Worldstar should cancel the Iranian President’s reservation. Is that where you came out? They make that decision based on the first principle of protecting the safety of the hotel’s guests and staff. That’s what first principles do: They cut through the noise and focus your thought.
Explaining Our Position to Internal and External Audiences
But our work is not done. Even the best decisions can fail if presented and implemented poorly.
In class we formulate our response plan, determining how we will announce our decision to the hotel’s key internal and external audiences. We draft a media statement, develop an internal communication program, set a social media strategy, choose and prepare our spokesperson/s, and select the best platforms, formats and timing for the announcement. We also debate if the IPO should be delayed and who should make the call to the White House.
If you’re interested in all that, get a copy of The Crisis Preparedness Quotient and read Chapter 16 (Guiding Your Response with First Principles”) and Chapter 17 (“Case Study: No Room at the Inn”). I can’t promise that will help you get around New York this week, but you will be better prepared to navigate the cognitive congestion of complicated crisis challenges.
Class dismissed!
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