Workers found out about collapse of George Calombaris’ restaurants via Instagram: A lesson in crisis communications

As administrators line up buyers for a dozen restaurants and venues tied to George Calombaris’ hospitality empire MAdE Establishment, one expert says the former MasterChef judge’s handling of his company’s collapse is a lesson for small business owners in how not to break bad news to staff.

The MAdE group brought in administrators from KordaMentha earlier this week after the fallout from a $7.8 million wage theft scandal last year left the companies reeling financially and Calombaris’ reputation in tatters.

But reports have surfaced the celebrity chef kept news of the impending collapse close enough to his chest that some of the 400-or-so employees working for MAdE had no idea what was coming.

In one instance, an employee of the company said they discovered their job was at risk from an Instagram post.

“We haven’t been told anything … we had to learn the company was going into administration via George’s post on Instagram,” an anonymous submission passed on to hospitality Union United Voice reads.

“For workers like me this situation is really scary. I am on a temporary visa and I may have to go home if I can’t keep my job.”

Gerry McCusker, a Melbourne-based crisis communications expert, says there are lessons for small business owners in how the chef has handled the communication of the events leading up to the collapse of the restaurant group, and indeed, the collapse itself.

“Businesses are at risk when they don’t recognise that crisis communications need to start from inside the business, then out,” McCusker tells SmartCompany.

“It comes down to whether staff can trust their employer … if your staff can’t trust they’re going to get it straight from you, then you shatter that relationship.”

McCusker believes the Calombaris collapse is a classic case of a business not preparing an adequate crisis communication strategy, ultimately failing to prioritise which audiences it needed to share the bad news with first.

And getting this wrong means only intensifies the public relations fallout.

“Organisations which don’t have an effective threat matrix, who don’t prioritise their audiences, they’re always going to struggle,” he says.

“The stuff is hitting the fan and everyone is getting caught with it … it almost creates a second wave PR disaster.”

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