Did you get the blue screen of death?
CrowdStrike is having a very bad week. It’s early days on the details, and plenty of pundits have already weighed in on what happened and the potential cost. Because when you promise your product will protect computers and instead it shuts them down, your brand will take a hit.
However, brand hits happen every day. Okay, so they don’t usually cause global chaos. Still, value does constantly shuffle into and out of the brand.
So, I’m interested in what the crisis can teach others about how that value in the brand can help an organisation weather what comes next. Even with good (read genuine) purpose and values, solid processes, and the best intentions, stuff happens. So, when it does you want plenty of value in reserve.
Someone doesn’t check something. Jumps the gun on pushing an update. Or every box gets ticked, the process gets followed, and still millions of computers stop working. Just how much value gets eroded will depend on a raft of things.
For example, what leadership does and says at that moment and those that follow; how much goodwill the organisation has accumulated with stakeholders; its reputation and reserves of capital; whether the situation was deliberate or accidental; and how the people on the other side of the broken promise react, to name a few.
At CrowdStrike, the leadership quickly owned up, and internal teams identified the problem, which was a good start. Appearing ragged and exhausted on television, CEO George Kurtz said: “We’re deeply sorry for the impact that we’ve caused to customers, to travellers, to anyone affected by this, including our companies”.
He continued: “That update had a software bug in it and caused an issue with the Microsoft operating system…we identified this very quickly and remediated the issue”.
But that’s likely the easy bit. Word on the street is that many computers will need individual updates, making them IT people’s nemesis for a while longer.
Predictably, CrowdStrike’s share price fell off a cliff, but it is still higher than early-year lows. For now. But share prices rarely indicate anything other than investors’ confidence. There are certainly better markers to track how the brand is fairing.
Goodwill and reputation are two capitals traded in a crisis. So, doing the right thing when no one is looking is crucial to offset the damage when everyone is watching after something does go wrong. People are likelier to stick with you if they think you’re a good company who made a mistake.
In business since 2012, CrowdStrike has the largest slice of the fragmented cyber-security software market. It was also named one of Glassdoor’s 2023 20 best places to work. Which both indicate reasonably robust brand value. People don’t stick with products or stay working at companies that routinely break promises.
The good news for CrowdStrike and anyone on the pointy end of a problem is that people have short memories. The initial screams of outrage quiet to rumbles of discontent and eventually sputter into business as usual. And unless your brand is bankrupt value beforehand, you might have enough reserves to rebuild. Which is why keeping your big and small promises matters. It’s how value accumulates, so think of it as future-proofing for inevitable stuff-ups.
It’s early days on whether there are long-term consequences CrowdStrike can’t absorb. These might include losing market share to other products and individual or class action lawsuits due to the widespread impact. In the wake of VW software ‘bug’ falsifying emissions, they paid over a billion dollars in fines, and CrowdStrike doesn’t have VW’s deep pockets.
For now, keep communicating. Give customers a steady stream of sharing what they know and are doing. Harness all the value their brand still holds and put it to work shoring up stakeholder relationships. And they might survive to update another product. Just beta-test it first!
Never miss a story: sign up to SmartCompany’s free daily newsletter and find our best stories on LinkedIn.
