On January 29th, five days following the release of his book, Victor Castanet, author of Les Fossoyeurs, had a proud declaration to make. On Twitter, he announced that the book was going to be printed a fourth time in only four days, therefore reaching 95 000 copies.
If the crisis’ media coverage slightly fell at the end of the week, overshadowed by Marion Maréchal’s political back and forths, Orpea’s stock lost 50% of its value in the span of five days. Such dramatic downfalls are few and far between.
« Old age is a shipwreck », used to say President Charles de Gaulle. With increased life expectancies, elderly care has become a major social issue, extremely complicated on both individual and collective scales. This issue affects and scares each of us and everyone. Society still struggles to even address the matter, and even more to solve it. A telling example is that both the creation of a specific branch within the Sécurité Sociale as well as the adoption of the great law promised by the last two Presidents have failed. Uncovering the abuse prevailing within care facilities implies forcing ourselves to deal with our own personal and collective guilty conscience. Hence the triggering of an unprecedented crisis, even reaching Belgium where Orpea’s facilities also started getting investigated.
Three lessons can be drawn from such events, applicable to any company.
First, Orpea’s woes can largely be explain through its failure to achieve the main goal that justifies its own existence: to welcome with decency and dignity the elderly needing care. Elderly care was supposed to be a promising sector for investors. Being a publicly listed company and the European leader of the industry entails that stinginess is no option: whether it is about the number of diapers, the quality and quantity of food, medical care or daily support. Companies must act in accordance with their core values and need to respect their promises and commitments. These past years, many of the big mediatic crises have been triggered by breaking this golden rule. Buffalo Grill, selling meat contaminated with mad cow disease and endangering its clients. Findus, selling horse meat and deceiving its consumers. Ikea, keeping records and spying on its collaborators, while the brand built itself on being open, transparent and benevolent. BP, right after announcing its plan to turn to clean energy and rebranding accordingly, polluting the Gulf of Mexico with very little care. One can also mention Arthur Andersen, world leader in auditing, signing off Enron’s incorrect accounts and destroying evidence in order to avoid prosecution, while their approval was supposed to mean absolute trust for all stakeholders. The list is endless. When it comes to nursing homes, there had already been a big crisis: Korian’s. Their stock value had dropped, even though way less than Orpea’s did. The main concern was an influenza epidemic, a sensitive topic which revealed many issues, such as the employees’ reluctance to get vaccinated or families and residents refusing or neglecting to follow sanitary protocols. These specificities, helped by successful crisis communication, allowed for the crisis to die down and for the company to avoid lasting damage.
Secondly, Orpea’s crisis communication was clearly not fitting with the gravity of the accusations. They failed to react swiftly, only responding on January 24th. Their statement described the accusations as « outrageous, misleading and damaging ». Two days later, the company hired two « highly rated cabinets » to provide independent assessments. In the meantime, the fire lit by Mediapart and fueled by Le Monde has already engulfed the company.
Orpéa’s actions were a typical example of poor crisis-management: first, denial, then, an attempt to divert attention and gain time by requesting independent examinations. Only to announce the resignation of their CEO on that same night. Maybe this is where they should have begun. In addition, they could have asked for an investigation from the Inspection générale des affaires sociales (IGAS) to show initiative and prove their desire for transparency.
Finally, no one, apart from Orpea’s management, seemed to have any doubts about the claims made within the book. And nobody intervened in their favor. Moreover, all the testimonies – from former managers, employees, as well as the residents’ relatives – have confirmed the claims. Even the industry twisted the knife: Frédéric Valletoux, president of the Fédération hospitalière de France (FHF) claimed in the Journal du Dimanche of the 30th of January that « looking for money in the stock market is not an infraction. But elderly care is not an ordinary business». This highlights the need for companies to slowly create a network of ambassadors they could rally in time of need, by maintaining close relationships with media and key stakeholders. The implies that any action has to be thought long-term and cannot be rushed and improvised during a crisis.