Costa Rebrandia: A study in strategic leadership and governance

A luxury cruise liner hits the rocks with 32 fatalities. Within weeks, another ship from the same company suffers another serious incident, and is towed to safety. The company faces serious dilemmas of retaining credibility in the marketplace and of finding a way of dealing with its corporate reputation.

The leadership challenge

What would you do, as a member of the board of this hypothetical company?

Hints for students of leadership

A recent series of events prompted this post. A crisis calls for creative actions, be they to preserve the past, or initiate changes for the future. Study of firms who found ways of dealing with reputational threats might suggest parallels. The Perrier recovery from contamination of its brand has become a business school classic. Disgraced politicians and celebrities find ways back into public acceptance. Even the ostrich strategy (do nothing to attract attention) may have to be considered

Suggestions welcomed

LWD subscribers suggestions welcomed and will be added (after editing) to this post.

How a news story develops

The fatalities in the Costa Concordia accident ensured that attention would be turned to the parent company. Without that impetus, the story of a cruise ship being tuged to harbour would have hardly captured attention. By then jouurnlists have begun searches for other stories to add to the developing narrative. Here’s one claiming evidence of ‘sex and drugs on Concordia cruises’. Maybe that even has some positive rebranding opportunities. Perish the thought.

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10 Responses to Costa Rebrandia: A study in strategic leadership and governance

  1. Mark Williams says:

    Rebranding? Possibly a good idea given a similar incident, the aftermath of the Zeebrugge disaster. With the Herald of Free Enterprise on its side and 193 dead, displaying the Townsend Thoresen brand clearly visible on the hull and funnel for the world to see, did owners P&O have any other option other than to rebrand as P&O Ferries?

  2. Ah yes. Thanks Mark, I’d forgotten that one.

    Did TT have other options? Before saying no I’m inclined to wonder ‘what would Rupert Murdoch have done?’

  3. Mark Williams says:

    Rupert Murdoch is an interesting comparison. While he successfully mitigates PR disasters, how would he deal with a shipping accident?

    Going back to Zeebrugge, TT did enjoy a superb reputation prior to this – and P&O had only recently acquired the firm, so rebranding may have been a matter of course regardless. Had the TT brand remained maybe their previous record would have won through?

    For comparison, when airlines suffered a loss, they usually changed the flight number (scrapping the one associated with the incident) but not rebrand.

  4. Or how about Richard Branson. When his Virgin train crashed a few years ago in the UK he was there as fast as possible …

  5. Mark Williams says:

    Tudor, I overlooked Sir Richard. Indeed, Richard Branson is a good example of the person leading (and to some extent ‘being’?) the brand.

  6. Paul Hinks says:

    I also remember the Zeebruger disaster – a terrible accident & completely avoidable – one which regrettably resulted in the loss of over 190 lives 😦

    An overarching responsibility for Leaders has to be Health & Safety – I see Health & Safety as the first priority for Leaders. Leaders need to instil H&S into the culture of their organisation.

    “Think safety”, “Safety first” – just a couple of visual statements that are imprinted in my mind from visits to various UK manufacturing sites.

    Another example is the BP Oil Spill in the Gulf when the drilling rig explosion caused millions of gallons of oil to contaminate the ocean and the Gulf Coastline.

    This URL highlights a White House investigation citing poor management control:

    http://tinyurl.com/3abqtnp

  7. Biju Menon says:

    I Agree with Paul. The Costa incident throw light into the entire cruise business which I consider has become a casino for not only the passengers but also the crew. As a member of the board I would suggest strict actions and penalties to be implemented for the crew who consume drugs. This to be done for the entire cruise business and not only Costa.

  8. Thanks a lot. LWD contributions have given me a richer understanding of the cruise business sector. Mybe I had been too influenced by a naive rational model of why people go on cruises. Of course the ‘old’ model did suggest the 3S factors: (sun, sex, and sea).

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