Saturday, February 16, 2013

Carnival Cruise Disaster: When to Apologize

Cassie Terry of Texas was the first passenger from the ill-fated voyage of Carnival Corp.’s Triumph cruise ship to file a lawsuit against the company.  This after the ship landed at Mobile, Alabama following a trip that was anything but leisurely.

Just a few days earlier, the Triumph cruise was disrupted by an engine fire that disabled many functions of the ship, including the flow of fresh water and the use of ship plumbing systems.

In Ms. Terry’s legal claim, she said she had to wade through human feces from overflowing toilets.  Her account wasn’t the only one of its kind.  She claimed in her lawsuit that Carnival did not provide a seaworthy vessel and sanitary conditions.  As a result, the lawsuit contained the predictably boilerplate language that the plaintiff suffered physical and emotional harm, which included anxiety, nervousness and loss of enjoyment of life. 

Legal analysts say that because Carnival forces its guests to sign contracts prohibiting them from class action law suits and other types of litigation, it will be difficult for any of the passengers to effectively sue the company and get the awards they may seek.  But that doesn’t mean the PR damage hasn’t been done.

The media followed this story closely and mobbed disembarking passengers to get their stories at the end of the journey. 

The company offered passengers a compensation package and issued an apology on Thursday.  Carnival offered to reimburse passengers in full plus transportation expenses, a future cruise credit equal to the amount they paid, plus a payment of $500 a person to help compensate them.

When interviewed in the media, the passengers felt the compensation was too little and the apology too late.

Here’s how the media covered it.

Carnival Corp. Chairman Micky Arison did not publicly comment on the Triumph problems and was not on scene as the ship docked in Mobile, Alabama on Thursday.  Rather, his last public appearance was at an NBA game between the Portland Trail Blazers and the Miami Heat, the franchise he owns.

The company’s president Gerry Cahill was on site in Mobile and did meet with the passengers and the media.  He apologized to the media and directly to the distraught passengers before they were permitted to leave the ship.

This didn’t dissuade the passengers from criticizing the cruise ship company and from speculating on possible legal action against the company.  One passenger, Robin Chandler of Dallas, told reporters how she lost wages, had to pay a baby sitter and lost time from her job, all due to a failed vacation.  She blames Carnival.
I’m not sure what Carnival could have done at the time to minimize the damage to its reputation, but I’m also not so sure the actions they took were the right ones.

·         Should the president have met the disgruntled passengers to apologize before they left the ship?
·         Was the compensation package they offered enough?
·         Should the chairman have said something, or at the very least, should he have been seen in public seeming carefree and courtside at his NBA team’s game, or should he have been under the radar?

I think the president was in a losing position the moment he physically boarded the ship while the passengers were still suffering from the voyage.  He was armed only with an apology and a promise to make things right.  The passengers were tired, frustrated and angry at that time, clearly not in the mood to hear the apology in lieu of leaving the ship as soon as possible. 

The president should have met only with the media on that night, reinforcing all the corrective and reparation actions that Carnival had planned.  Passengers should have left with complete packages of information on what they would receive and who they should contact if they had any questions.

On the issue of compensation, this is a subjective issue.  As lawsuits will reveal, it would seem no reasonable compensation offer would be enough for some.  Still, it would appear that the compensation that was offered was at least half of what the cruise line should have offered.

As for chairman Micky Arison, he screwed up.  Just as I think it was a mistake for Gerry Cahill to overdo it by apologizing prematurely, Micky Arison’s aloofness was a mistake.  When passengers on one of your ships are suffering, it’s not a good idea to risk creating the appearance that you’re living a life of luxury, sitting courtside at a basketball game, apathetic to the plight of your customers.

He should have met with the media and conveyed his concern for his passengers, and his commitment to making the situation right, and preventing such a disaster in the future.  Then he should have backed off until such a time when he had more substantive news to convey, all centered on a solution.

As for that apology, many PR people these days seem to think a public apology is the sponge that washes a reputation clean.  There’s a moral relevance given to apologies that seems to believe that if the CEO is sufficiently and voluntarily humiliated in public, then all will be right for the company.

Typically, however, once the CEO apologizes the negativity doesn’t go away.  The story then morphs into whether or not the apology was sincere enough, or whether it was deep enough.  And even then, as one would expect, the story becomes about the problem. Was it fixed?  Did the company do enough to prevent the problem from happening, and did it do enough to prevent it from happening again?  And did it make the situation right for those affected?

These are all important questions.  My issue is the order.  To effectively manage a crisis like this, you need to address all of these questions before your apology will be taken seriously.  But I sense that if you do effectively identify the root of the problem, fix it, prevent it from happening again, and make things right for those affected, you may not need to apologize.

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