Facebook hasn't exactly been sitting pretty in the court of public opinion, even if many who were holding its feet to the fire over unscrupulous "fake news" stories and Russian-bought political advertisements were still using the social media platform. But the storm was perhaps breaking, and brighter skies -- or at least neutral ground -- seemed on the horizon.

Then Cambridge Analytica happened.

News broke that the right-wing political consulting firm, funded by prolific conservative donor Robert Mercer and former White House advisor Stephen Bannon, acquired data on more than 50 million Facebook users likes through the use of a third party app. That data was then used to target users with political ads intended to sway their opinions or influence behaviors in favor of the Trump campaign.

The reason this is so scandalous, though, is that Facebook essentially allowed the initial data to be accessed by the third-party application. Facebook maintains that its rules were violated, but it has still raised questions about the security of user data on the social media platform. Facebook's share price has dipped as a result of the revelations as well.

"In this instance, Facebook is guilty of a huge abuse of trust, and as customers, people, human beings, we are rightly outraged by this," Andrew Busby, founder and CEO of Retail Reflections, said. "We use platforms with an unwritten (sometimes written, if we read the T&C's) rule that trust will be the backbone of our relationship and that this won't be abused."

So, what is the company doing to respond to this moment, especially given its already poor standing in the wake of the Russian propaganda scandals?

Following the three steps of crisis management -- prepare, respond, and recover -- let's examine Facebook's process thus far.

Always Be Prepared.

Preparation was clearly not Facebook's strong suit here. Preparation would have insulated user data, or at the very least made users aware that the type of data harvesting Cambridge Analytica engaged in was possible. Instead, many users were completely blindsided, unaware that third-party apps connected to Facebook's API could collect and transfer their data. Running through various crises scenarios is key to being prepared. 

Respond Quickly.

This is the stage Facebook finds itself in now. Facebook CEO Mark Zuckerberg released a statement that amounted to an acceptance of responsibility, and promised that the company would be making changes to its data security policies.

"We have a responsibility to protect your data, and if we can't then we don't deserve to serve you," Zuckerberg said in a Facebook post. "I've been working to understand exactly what happened and how to make sure this doesn't happen again."

However, the response came four days after news broke of the scandal. Major issues like the Cambridge Analytica data harvesting deserve an immediate response, and Zuckerberg dropped the ball.

"In today's world, I believe you have 15 minutes to address some kind of crisis when it emerges over social media," Davia Temin, founder and CEO of crisis management firm Temin and Co., told MarketWatch. Customers don't like to be left in the dark. A quick repsonse is key to rebounding. 

Recover with accuracy.

So, what steps are being taken to recover? Zuckerberg said many steps were taken years ago, and he outlines them in the lengthy post. But then, he added, "there's more that we need to do."

Those steps, Zuckerberg said in his mea culpa, include investigating apps that had access to similar troves of data before the platform was changed in 2014, restricting developers' data access even further to prevent abuse, and increasing transparency about data sharing to users.

Despite the slow response, tangible efforts to make changes could be enough to begin rebuilding trust. Recovery largely hinges on whether Facebook can make users believe it has really, truly taken the steps it said it would to mitigate future disaster.

"When one of the world's most recognized brands destroys the trust and confidence of its customers, the cost, if not handled correctly, could be huge," Shep Hyken, a customer service expert and New York Times bestselling author, said. "Already Zuckerberg is managing the damage. He has acknowledged the problem, apologized for it, is in the process of a resolution, has accepted responsibility, and is acting with urgency."

Any entrepreneur can view Facebook's Cambridge Analytica scandal as a test case. Sink or swim, the social media giant will be teaching us all some important lessons about crisis management.

All businesses will face crises at one point of another. Being proactive and anticipating challenges will only hedge yourself from falling deeper. 

Published on: Mar 22, 2018
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.