In recent years, US newspapers and tele-vision news broadcasts have almost daily featured some company in crisis. Images of embattled companies and their leaders have become commonplace. The crises have ranged from corporate fraud in accounting procedures to allegations of widespread sexual harassment or discrimination. In almost all cases, the leaders of these companies are caught off guard, yet with the world watching, they are expected to say (and do) something to manage the situation. The consequences to a firm’s reputation from mishandling a corporate crisis can linger for decades. We want to emphasize that it is often the (mis) handling of crises, not the crisis itself, that can have the most consequences–positive and negative–for a firm. What differentiates those firms that thrive following a crisis from those that do not is the leadership displayed throughout the process.

Consider, for example, how most people continue to hold Johnson and Johnson (J&J) as the standard for how to effectively manage a crisis situation, based on the company’s response when cyanide-laced Tylenol tablets caused numerous deaths in Chicago in the early 1980s. To this day, the popular press consistently rates J&J as one of America’s top companies, despite a crisis situation that could have adversely affected consumer trust and firm performance.