Public Relations Crisis Management Case Study: Inside the WaMu Meltdown

WaMu bank failure
WaMu bank failure

Handling PR crisis management for one of the biggest bank failures in US history with Former Washington Mutual Vice President of Internal Communications Karen Horn at the Public Relations Society of America’s International Conference in San Diego. 

Prior to her position at WaMu, she was the senior director of employee commitment at Cisco.

Crisis Communications at Washington Mutual   

01:37 – A summary of why and how Washington Mutual became insolvent, the FDIC seizure, and the sale of the failed financial services firm to JP Morgan Chase for $1.7 billion. 

03:52 – What the sale of WaMu to Chase meant for homeowners who had financed their homes with a home loan from Washington Mutual.   

04:36 – What happened on Sept. 25, 2008, the day WaMu employees found out the FDIC had seized the bank, and the declaration of the sale to JP Morgan Chase came by way of their government relations team.   

06:23 – The government relations team’s decision to communicate the declaration via telephone rather than email since the initial accounts were speculative.   

06:55 – Scripting the message to employees about the collapse and the FDIC seizure so that if a seizure did occur, WaMu could inform employees before the mainstream news media and the decision to distribute that communication via email.   

08:05 – Sequencing the distribution of the internal communication to employees with the company’s external communications efforts to the news media, and how they distributed the press release strategically to control its disemmination.   

09:16 – The emotional reality of learning that the company you’ve been working for has gone belly up and that your pension and 401k are gone.   

10:58 – When do you turn your back on your employer’s corporate reputation?  Do you go down defending the brand, or do you surrender to trying to save the memory of a sinking ship?

12:31 – WaMu’s use of an internal leadership blog in their intranet, which was maintained by the bank’s COO, to attract criticism and identify friction points within the bank.  

14:50 – Lessons learned and advice to financial services companies about integrating social media into a crisis management strategy.

16:10 – Using an external social media channel like a blog for investor relations, sustaining a conversation over the long haul, and ensuring the organization’s reasons for blogging are realistic.   

18:32 – Is internal communications more important in the conversation age since we are migrating from a world where the organization’s center was the mouthpiece to one where the organization’s center informs its edges, and its edges inform the world?

19:56 — The single biggest corporate communications lesson learned from handling corporate communications during the collapse of Washington Mutual.   

22:54 – How WaMu communicated with customer services representatives in the days leading up to the failure to motivate them to do their best to protect the bank’s interests despite its precarious financial predicament.   

20:59 – End 

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