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Develop and Implement Crisis Management Plans Assignment 1 ­ Crisis Research and Analysis Virgin Galactic Crash ­ 31st October 2014 Prepared by Dan Johnson ­ s3508105 1. Research and identify a recent organisation crisis (post 2005) 1.1. Virgin Galactic Crash 2014 Overview Virgin Galactic was founded in 2004 by Sir Richard Branson. The company set out to be the first commercial spaceliner, giving anyone the opportunity to travel into space. On the 31st of October 2014 their only operational test passenger craft the VSS Enterprise c​rashed during its 55th test flight. The E​ nterprise w​ as a SpaceShipTwo (SS2) model, the second generation of Virgin Galactic’s “SpaceShip” craft. The SS2, still in relatively early testing stages, is air­launched from V​ MS Eve, ​the mothership craft. The E​ nterprise a​lso features a new air brake system, known as a feather brake. Within seconds of the E​ nterprise ​releasing from the E​ ve ​there was a puff of smoke and the ship disintegrated. At the time the E​ nterprise ​was testing both a new hybrid propulsion system, RocketMotorTwo (RM2), and a plastic­based fuel type. It was initially speculated this was the cause of the plane’s crash.1 2 This is a timeline of the events as they happened;3 > 10:07:19 am ­ E​ nterprise ​released from E​ ve > 10:07:21 am ­ E​ nterprise e​ngines start > 10:07:29 am ­ E​ nterprise ​accelerates to 0.9 Mach > 10:07:30 am ­ Feather brake system unlocked > 10:07:31 am ­ E​ nterprise ​reaches speed of 1.02 Mach > 10:07:34 am ­ Telemetry and video data lost Within a matter of seconds the craft had seemingly exploded and debris was scattered across a 56km area of the Mojave desert, California. The craft was piloted by Peter Siebold and co­piloted by Michael Alsbury. Sadly as a result of the crash Alsbury lost his life, while Siebold was left with critical injuries. 1 "Virgin Galactic SpaceShipTwo exploded at 45,000ft: One ..." 22 Mar. 2015 <h​ttp://www.dailymail.co.uk/news/article­2816224/Virgin­Galactic­SpaceShipTwo­exploded­45­000ft­One­pilot­de ad­critical­Richard­Branson­s­500m­space­tourism­plane­blows­testing­new­fuel­California­desert.html>​ 2 "Virgin Galactic SpaceShip Two Explodes During Test, One ..." 2014. 22 Mar. 2015 <h​ttp://www.dailytech.com/Virgin+Galactic+SpaceShip+Two+Explodes+During+Test+One+Pilot+Dies/article3681 6.htm>​ 3 "Video: NTSB details timeline of Virgin Galactic's ..." 2014. 22 Mar. 2015 <h​ttp://www.theglobeandmail.com/technology/technology­video/video­raw­ntsb­details­timeline­of­spacecraft­cras h/article21436593/>​ 1.2. Type of Crisis The crisis was technological, early estimates blamed the RM2 as the mechanism at fault. However further investigation revealed Alsbury the co­pilot had moved his feather brake system from ‘locked’ to its ‘unlocked’ position.4 1.3. Impact of the crash 1.3.1. Virgin Galactic The initial impact to Virgin Galactic was speculated by the media to be massive. Many believed it meant the end of the project5, something that would push “space tourism” even further out of reach of the public. However, despite the catastrophic loss of life, the crisis appears to only have been a minor setback for the program. Virgin Galactic announced in November of 2014 that it’s second SS2 was expected to commence test flights in 2015. Financially speaking, the cost to Virgin Galactic and by extension the Virgin Group was minimal. As of 2014 it is estimated Sir Richard Branson had invested close to $500 million (US) into Virgin Galactic. Following the crash approximately 24 people, of the 700 or more who had pre­booked with the spaceliner, requested a refund.6 7 Including the cost to develop and construct the E​ nterprise8, the total loss to Virgin Galactic would be close to $1 billion (US). Given Virgin Group’s annual revenues exceed £15 billion ($22 billion USD)9 the loss is without a doubt significant, but unlikely to have any dire financial 4 "'Feather' System Was Unlocked: NTSB ­ Space.com." 2014. 22 Mar. 2015 <h​ttp://www.space.com/27754­virgin­galactic­crash­ntsb­investigation.html>​ 5 "SpaceShipTwo crash may be death­knell for Richard ..." 2014. 22 Mar. 2015 <h​ttp://news.nationalpost.com/2014/11/02/why­odds­are­against­virgin­galactic­sending­humans­into­space­insan ely­expensive­and­extremely­dangerous/>​ 6 "At least 24 Virgin Galactic passengers 'demand ... ­ Daily Mail." 2014. 22 Mar. 2015 <h​ttp://www.dailymail.co.uk/news/article­2820036/Dozens­millionaire­investors­pulling­Branson­s­Virgin­space­flig hts­disaster­killed­pilot.html>​ 7 "Some Virgin Galactic seatholders ask for refund on tickets ..." 2014. 22 Mar. 2015 <h​ttp://www.theguardian.com/science/2014/nov/05/virgin­galactic­seatholders­ask­for­refund­on­tickets>​ 8 "A Look at Cost Overuns and Schedule Delays in Major ..." 2011. 22 Mar. 2015 <h​ttp://www.parabolicarc.com/2011/05/04/cost­overruns/>​ 9 "About us ­ Virgin.com." 2011. 22 Mar. 2015 <h​ttps://www.virgin.com/about­us>​ consequences.10 1.3.2. Space Industry Regarding the industry as a whole, the impacts again were negligible. The industry of Space Tourism, or commercial space operators, is still in its infancy. Virgin Galactic, at the time of incident, had only 700 reservations for seats. The industry in total is comprised of three sectors, commercial spaceflight, satellite construction and the launch sector.11 Because of this separation, each sector is not dependant on the success or failure of the other, thereby limiting any negative media attention as a result of the crash. 1.4. Virgin’s crisis communication response 1.4.1. Communication Overview Almost immediately the company went online to inform the public an in­flight anomaly had occurred. At the time of the crash Virgin Galactic’s Twitter account was posting live updates of the E​ nterprise’s t​est flight. Immediately the tweets of praise became tweets of empathy, and concern providing informative, accurate and reassuring messages to anyone following online. Below are the live tweets sent from Virgin Galactic as the incident happened. 12 “#SpaceeShipTwo has been released by WhiteKnightTwo, and is now flying freely for the 35th time.” 10:07 AM ­ 31st October 2014 “Ignition! #SpaceShipTwo is flying under rocket power again. Stay tuned for updates.” 10:07 AM ­ 31st October 2014 “#​SpaceShipTwo has experienced an in­flight anomaly. Additional 10 "How Richard Branson Has Been Funding Virgin Galactic at ..." 2015. 22 Mar. 2015 <h​ttp://www.parabolicarc.com/2015/01/26/richard­branson­funding­virgin­galactic/>​ 11 "Space industry ­ Wikipedia, the free encyclopedia." 2006. 22 Mar. 2015 <h​ttp://en.wikipedia.org/wiki/Space_industry>​ 12 "Virgin Galactic SpaceShip Two Explodes During Test, One ..." 2014. 22 Mar. 2015 <h​ttp://www.dailytech.com/Virgin+Galactic+SpaceShip+Two+Explodes+During+Test+One+Pilot+Dies/article3681 6.htm>​ info and statement forthcoming.” 10:13 AM ­ 31st October 2014 “UPDATE:Virgin Galactic’s partner Scaled Composites conducted a powered test flight of #SpaceShipTwo earlier today (1 of 4)” 11:38 AM ­ 31st October “During the test, the vehicle suffered a serious anomaly resulting in the loss of SpaceShipTwo. WK2 landed safely. (2 of 4)” 10:38 AM ­ 31st October “Our first concern is the status of the pilots, which is unknown at this time.” (3 of 4) 10:39 AM ­ 31st October 2014 “We will work closely with the relevant authorities to determine the cause of this accident and provide updates ASAP. (4 of 4)” 10:39 AM ­ 31st October 2014 Sir Richard Branson also was quick into action, on Twitter he went from posting images of halloween costumes, to tweeting messages of empathy and support.13 “Thoughts with all @virgingalactic & Scaled, thanks for all your messages of support. I’m flying to Mojave immediately to be with the team.” 1:04 PM ­ 31st October 2014 1.4.2. Communication Tools and Spokespersons The company relied on both Sir Richard Branson and Chief Executive George Whitesides as spokespersons in the aftermath of the event. This dual spokesperson plan worked effectively for several reasons. Firstly, Sir Richard Branson is synonymous with the Virgin brand. He often 13 "How to Do Crisis Communications Right – The Virgin ..." 22 Mar. 2015 <h​ttp://www.business2community.com/crisis­management/crisis­communications­right­virgin­galactic­case­study­ 01059675>​ puts himself in the spotlight when promoting or representing his brand. Had he remained silent during this crisis, it would have been damning, and could have spread doubt into his other businesses, by negative brand association. Secondly, had Sir Branson been the sole spokesperson, it could have sent the message that he is responsible for the day­to­day activities of Virgin Galactic. This implication could’ve brought into question the focus of Virgin Galactic, as well as the commitment of Sir Branson to the project. But by having the Virgin Galactic Chief Executive deliver his own statement, it showed there was someone who could dedicate their full resources to solving or fixing this crisis. While eliminating the risk of negative brand association. 2. Crisis communication response evaluation The quick response worked tremendously well for Virgin Galactic as they took control of the situation and how information was disseminated. They were frequent in their releasing of statements with known details and all public appearances by Virgin Galactic’s Chief Executive, George T. Whitesides, were riddled with emotion and appeared unquestioningly sincere14 . Sir Branson also made it a point to own the situation. From his first tweet, his tone was focussed on action, ownership and continued passion.15 He let people know he was doing everything in his power to help with the situation at hand.
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