Insignia Talks

…about the power of communication to create, manage and protect reputations

News that Yahoo’s CEO, Scott Thompson (photo), has stepped down following accusations that his CV featured a fake computer science degree reinforces the importance of factoring people issues into crisis management planning.

Organisations often find it easy to produce crisis communication plans for external events such as accidents, fires, natural disasters, IT failure and even terrorist attacks. But “softer” issues affecting people – fraud, bullying, corruption, personal scandal and so on – are much less comfortable to consider.

Despite this, it’s essential that people-related issues – especially those related to senior management – are incorporated into reputational risk assessments. Some businesses feel squeamish about thinking the unthinkable, but failure to do so can leave them highly exposed if the worst should arise.

I’ve been working with a couple of clients recently who have overcome their unease with imagining despicable behaviour by senior management and as a result have increased their resilience to reputational risk. With the first one, we have scenario planned exactly how they would respond if its CEO was accused of corrupt practices. With the second we have conducted a crisis simulation in which a board director is arrested by the Serious Fraud Office.

Both organisations have strong reputations for integrity and ethical behaviour, so why would they put themselves through this pain? The answer is that they understand that the impact of a people-related crisis can be far more damaging than a crisis event which strikes from outside. Especially when integrity lies at the heart of their brands.

Yahoo faces a tough challenge as it manages the sudden departure of its CEO and the transition to a new leader. Businesses which want to minimise the impact of such an event should spend time planning for management behaviour that they can scarcely contemplate.

Far from being a sign of weakness or even guilt, it demonstrates professionalism and means that the future actions of one rogue individual are much less likely to damage the entire business and everyone else who works for it.

Jonathan Hemus
www.insigniacomms.com

The April issue of CorpComms magazine includes fascinating research about the level of trust between PR agencies and their clients.  The headline finding is that whilst over half of agencies believe they have an open and honest relationship with their clients, just 29% of in-house directors trust their agencies “absolutely”.

I believe that in life – whether personal or professional – relationships will only succeed if there is mutual trust and respect.  How can I protect my client’s reputation if we don’t have total honesty when managing a crisis?  Why would my client listen to my advice if they can’t be sure that my actions and counsel are guided by their best interests?

Insignia has the privilege of working with many senior businesspeople and it would be untenable to represent and advise them on reputation management if I didn’t trust and respect them.  Equally, I understand that the opportunity to offer communication counsel (and for that counsel to be acted upon) is based upon their trust in me and my consultancy.

Of course, trust and respect have to be earned, and this is a priority in the first few months of any new client relationship.  But unless this is achieved, the relationship will be purely transactional in nature and most likely doomed to long term failure.  It will certainly not lead to the best decision-making to build, manage and protect the organisation’s reputation.

Trust is a rare and precious commodity, but it is the essential ingredient for a successful relationship.  If you’re a client with a PR agency you don’t trust, look for another one: you cannot be making the most of your reputation.  If you’re a consultancy with a client you don’t trust, find a way of building that trust, or end the relationship.

Ultimately, I’d agree entirely with the un-named commentator in the article who said: “The relationship will only work and be of value to the client if we can have honest, open and trusting conversations.  This will not be a problem if the relationship is a genuine partnership based on mutual respect.  Without this, the relationship will be trying at best, downright demoralising at worst.  Life’s too short!”  (Well, I guess I would agree given that I was that un-named commentator!)

I’d be very interested to hear your views too.

Jonathan Hemus

www.insigniacomms.com

If you’re a regular reader of this blog and already have robust crisis management plans in place, you are excused from reading this post!  Whilst it would be nice to assume that most organisations are in this happy position, it would also be naïve.  So what should an organisation that has developed a positive reputation consider as its first steps in reputation protection?

A strong corporate reputation is acknowledged as a valuable business asset, one which takes years to build, and requires constant nurturing to maintain.  Recent crises suffered by Costa Cruises, Blackberry, Goldman Sachs and FedEx show that a major incident or issue puts that reputation on the line.  The outcome can be devastating; but it doesn’t have to be.

Rigorous preparation is the most important factor in protecting corporate reputation in the event of a crisis.  For example, when FedEx responded so well to YouTube footage of a delivery man throwing a PC into a customer’s front yard, it was surely due at least in part to thorough planning.

More than that, research shows that thorough preparation actually reduces the likelihood of a major crisis happening in the first place.  This is because the preparation phase highlights flaws and vulnerabilities that can be addressed, and creates a heightened sense of crisis awareness and vigilance that acts as an early warning system to snuff out potential crises before they escalate and emerge.  So engaging in crisis preparation and prevention is one of the best investments you can make.

Here are some of your first steps to protect your corporate reputation:

1. Identify and prioritise reputational risks – involve colleagues from different functions in this process to ensure you cover as many threats as possible.  Encourage people to think worst case scenario rather than adopting an attitude of “it could never happen here”.  This is especially important in the context of the transparency created by social media as experienced, for example, by LA Fitness.  Knowing where the threat can come from and its possible impact helps you to prevent a possible crisis, or at least develop necessary communication contingencies.

2. Identify your stakeholders – it sounds obvious, but so many organisations still flounder when they need to communicate with the media, customers, suppliers, regulators, local politicians and even employees in the heat of a crisis. Make sure you have up to date contact details always to hand and make someone in your organisation responsible for updating them on a quarterly basis.

3. Establish communication channels to reach your stakeholders in a crisis – identify the likely ways in which you will reach stakeholders in a crisis whether an online crisis hub, teleconference or press briefing.  Work out the process and resources required to activate these channels in a crisis, and make sure that they are available out of hours.  Never rely on the availability of a single expert or a technical guru: always have deputies in place. Nowadays online channels should be an essential part of your armoury: create an online crisis communication hub which will contain all your key information, have Twitter accounts set up and ready to go, and make sure you are able to create and upload a YouTube video within hours, even at the dead of night.

4. Form a crisis communication team – identify and brief the people who will likely form your crisis communication team.  Make sure they have the relevant expertise and personal qualities necessary to communicate with stakeholders in a crisis.  As well as technical experts – for example in social media, internal communications and the media – make sure that you have administrative and technical support available.

5. Identify and equip a crisis communication team room – a dedicated crisis communication team room containing resources such as direct phone lines, Wi-Fi, televisions, telephone contact lists, whiteboards, flipcharts and so on will form your nerve centre in the event of a crisis.  Identify where you will locate this room ahead of the crisis and ensure that it is always stocked with the necessary resources.  An adjacent quiet room, in which statements and other documents can be prepared, is also useful.  Make sure that both rooms are out of the range of camera lenses!

6. Prepare a crisis manual – a set of clear processes and materials (for example, template holding statements) is an invaluable aid to effective decision-making in a crisis. But make sure it is not so large and detailed that it is unwieldy in a real incident.

7. Train the crisis team – whilst a crisis manual is valuable, a well-trained crisis communication team is invaluable.  Make sure that they are properly briefed on crisis procedures through desktop exercises, invest in crisis communication training via realistic simulations, and put spokespeople through professional media training to ensure they can get their message through when the heat is on.  Nowadays, it also makes sense to run regular social media simulations to get teams match-fit for the relentless pace of an online crisis.

8. Keep your crisis planning alive – a common trap is to treat crisis communication planning as a one off event.  Avoid this pitfall by re-visiting the manual regularly, planning a schedule of training courses or team events, and building relationships with your internal and external stakeholders before a crisis occurs.

Preparation is essential if organisations want to protect their corporate reputation in the event of a crisis. Sound judgement and skilful leadership will also be required, but having strong foundations on which to apply these skills provides a significant headstart.

Jonathan Hemus

www.insigniacomms.com

When considering customer backlashes, boycotts of products and services or anger spread throughout the media and the internet we tend to focus on consumer facing organisations. These companies are all too aware of the possible reputational risks and most are prepared for the online battle to protect their corporate reputation and brand. They tend to be well-equipped with a social media action plan ready to be used when the crisis hits.

The situation is a little different when it comes to big corporates or business to business (B2B) companies. Their assumption has been that the Internet in general and certainly social media have little relevance to their reputation as B2B businesses operate in a different realm compared with their consumer-focused counterparts.

This belief was turned on its head when Greg Smith announced his resignation from Goldman Sachs in the New York Times calling his employer “morally bankrupt” and subsequently causing crisis of monumental proportions. From an article in conventional media channel, it spread quickly via Twitter, anti-Goldman Sachs Facebook pages and many blogs.

Social Media Influence has thoroughly analysed the Goldman Sachs crisis and their insights are available here.

The lesson from this reputational disaster is that no company, be it a consumer brand or a more traditional corporate, is safe from an online vendetta. And thus, crisis preparedness and training – including social media exercises – is a must.

Jonathan Hemus

www.insigniacomms.com

Claire’s, the accessories and jewellery retailer, has found itself cast in the classic role of corporate Goliath, supposedly trampling over a much smaller rival following allegations that it copied the product of an independent designer.

It’s an impression unlikely to win friends and one which the company would wish to shake off.  Its crisis communication approach has been to keep its head down, presumably in the hope that the storm will pass.

This is not always the wrong strategy: sometimes ignoring online, or indeed any criticism, can be the best approach to avoid turning a minor skirmish into a major crisis.  The key though is not to make these decisions on the fly, but to invest time beforehand so that the right strategy can be quickly adopted in the event of an issue.

That means conducting regular reputational risk assessments to identify what could go wrong and then scenario planning against the most likely or most damaging risks.  This allows businesses to identify triggers for communication and calibrate their response appropriately.

In Claire’s case, the trigger could have been when online comment reached a pre-agreed level or when certain influential stakeholders joined the debate.  Realistic social media simulations can help to further rehearse decision-making and ensure the communication team is fully geared up to respond to an online crisis.

This issue also flags up the need for thorough online media monitoring. We don’t know what mechanisms Claire’s had in place to monitor social media conversations.  What we do know is that being aware of what is being said about you as soon as it is said, is the first and essential step in being able to respond quickly to criticism.

Claire’s extremely guarded response to the issue seems unlikely to be in the best interests of its reputation.  By absenting itself from the online discussions, it allows others to make assertions, shape the discussion and influence how Claire’s is seen.

The current policy of non-communication and alleged removal of Tweets and Facebook posts only serves to reinforce negative images of Claire’s as an aloof and controlling corporation.

Communicating more pro-actively – whether to stand behind its design and explain its approach to working with small designers, or to apologise and announce actions it will take to address the situation – would help to position the organisation more empathetically and in control of its own destiny.

Jonathan Hemus

www.insigniacomms.com

When LA Fitness threatened to enforce its contract with a heavily pregnant woman who had fallen on hard times, it may have had the letter of the law on its side.  But once the story became public, it was found guilty in the court of public opinion.

LA Fitness is just the latest business to find out that protecting reputation means doing the right thing in the eyes of the outside world, not simply complying with regulations or the law.

Ten years ago, LA Fitness’s dispute with a customer over whether her gym contract could be enforced would have been a private customer service issue in which the company held the balance of power.  Today it requires crisis management skills, is conducted in public and public opinion has far greater influence.

This transparency needs to be understood by businesses and factored into their behaviour, decision-making and communication. The imperative to act in a way that matches the  expectations of external stakeholders is largely driven by the power of social media.  In the old days, customer complaints could be dealt with in private and media criticism dismissed as tomorrow’s fish and chip paper.  Today, because of Twitter, Tripadvisor, Google et al, customer service – and crisis management – has become a spectator sport.  Worse, the spectators actually influence the game.  Whether businesses like it or not, this is the reality.

This transparency has raised the bar in terms of ethical and acceptable corporate behaviour – it’s much harder to do bad things and simply get away with it (which, of course, is a good thing).  It also means that the need for thorough crisis  management planning is more pressing than ever: reputational risk assessment, social media monitoring, scenario planning and realistic social media simulations should all form part of this.  A slow or inappropriate response to a crisis will be punished with damage to reputation.

LA Fitness appeared to be forced into a u-turn, and  this never looks good.  Ultimately, the key for businesses is to control the crisis rather than let the crisis control them.  Being able to perceive a crisis from the outside in and acting quickly and appropriately when company behaviour clashes with public expectations is essential to preserve corporate reputation.

Jonathan Hemus

www.insigniacomms.com

As I glanced through the statement issued by Costa Cruises in the wake of the dreadful Costa Concordia accident, I noticed how it ticked the golden rules for crisis communication: concern and empathy for human life in para one; actions to address the situation in para two; messages about minimisation of environmental impact in para three.

So far, so good.  And then, in para four, I read this:

“preliminary indications are that there may have been significant human error on the part of the ship’s Master, Captain Francesco Schettino, which resulted in these grave consequences”

It is the earliest and most explicit attempt to blame an employee for an incident that I have ever seen, and at best, I view it as an extremely high risk crisis management strategy.

Here’s why:

• it creates the impression of a business willing to jump to conclusions before all the facts are known, rather than keeping a cool head
• it infers that the business’s top priority is protecting its own commercial interests and will use any means to do this, rather than focusing all attention on the human impact at this early stage
• it implies a separation between company and employee which could be seen as artificial
• it portrays an unflattering picture of a large business prepared to cast an individual employee adrift when the going gets tough
• it creates further fuel for an extended crisis – controversy – as the captain denies the accusations

And what if investigations conclude that the captain was not to blame?  In this situation, Costa Cruise’s early pronouncement would be hugely damaging to reputation.

Effective crisis  management is of course about using all means at your disposal to protect corporate reputation.  But that doesn’t mean applying the most expedient and pragmatic message without careful thought. Statements and pronouncements from media spokespeople must be delivered with a clear understanding of not just the immediate term impact, but also how the business wants to be regarded a year later.

As a final point, history shows that businesses which pin crises on “human error” have frequently created the conditions in which human error is likely: insufficient training, a culture of profit before safety or an environment in which front-line employees are afraid to voice concerns, are all conditions which make a “human error” much more likely.

So, even if Costa Cruise’s allegation turns out to be true, it may still not be enough to protect its reputation.

Jonathan Hemus

www.insigniacomms.com

Blackberry looks set to once again prove the crisis communication adage that it’s not really the crisis which damages reputation, it’s the way in which you respond to it.

On this basis, Blackberry is set to suffer major harm to its reputation (and its business fortunes)  based on a tight-lipped approach to communication and a failure to use social media to communicate its response to the current problems.  Gordon MacMillan’s blog posting on The Wall sums it up perfectly for me – it’s well worth a read: I’ll simply say that I endorse every word and would also add the following.

Swift crisis communication

Any organisation which wants to protect its  reputation in a crisis must be geared up to communicate quickly and expansively in the event of an incident.  For most organisations that must include social media: it’s where the crisis plays out, it’s where customers go to seek information and vent their spleen, it’s where the media turns for information.  And it’s where businesses can quickly exert influence over the communication agenda, and listen and respond to the concerns of its stakeholders.

Social media in crisis communication

In today’s online world, I would contend that even an organisation without a consumer face should have the ability to utilise social media in the event of a crisis.  But if you’re a consumer brand (which Blackberry has chosen to become) you certainly should have this capability.  Moreover, if you’re a  consumer brand in the telecoms space whose devices facilitate communication by social media, I find it truly staggering that you would ignore these channels when your reputation is on the line.

Not only does it go against the guiding principles of effective crisis communication, but it also calls into question whether the Blackberry brand really is at the heart of social media (and therefore the consumer landscape), or not.

Crisis management training

Organisations at the leading edge of  reputation protection have already integrated social media into their crisis communication planning and are running realistic crisis exercises with social media as a core element.  All businesses need to embrace this approach – and quickly – or else risk being overwhelmed by the kind of crisis communication challenge currently facing Blackberry.

Update: 15.20 13 October

Blackberry has now begun the social media fightback with a YouTube video apology from CEO Mike Laziridis in which he admits “we’ve let you down” and commits to more pro-active communication.  Its content, tone and messages are spot on.  But at least 48 hours too late.

Jonathan Hemus

www.insigniacomms.com

Yesterday we considered the crisis communication lessons that businesses could learn from the News of the World hacking scandal.  Today, guest blogger Nick Woods, head of Publicis Consultants, considers how the paper might recover from its current crisis management challenges.

If you believe Rousseau, man is essentially good. He, or she, has flaws but the start point is that they are born good.

Your view on how this applies to Rupert Murdoch, Rebekah Brooks, Andy Coulson, Glenn Mulcaire or the coppers that sold stories is yours to ponder but it raises an interesting point about brands.

Very few brands are ‘born good’, rather they are created with the express purpose of making money for their owner.  But that doesn’t mean they shouldn’t do good, as the NotW is proving – doing good isn’t just a useful pillar when things begin to go wrong it also provides a new potential strategic direction.

The News of the World has, undoubtedly, behaved appallingly and it seems likely we’ll see inquiries, new laws and hefty punishments for those who thought they were above the law.

But, as Colin Myler said in his letter to staff yesterday, the paper has also done some very good things:

“We are the paper that campaigned to enshrine the Military Covenant in law, fought for ten years to establish Sarah’s Law into legislation, the paper of Children’s Champions, the paper that has fought tirelessly against bullying and so much more.”

On top of these they have been one of Help for Heroes’ leading champions; the irony of last night’s reports that they also hacked into the phones of dead servicemen is lost on no-one.

This ‘good’ work could form a part of the brand’s recovery (and recover it surely shall – I predict a circulation spank this Sunday and then a full recovery over subsequent weeks with advertisers quietly returning).

The paper will undoubtedly have to be contrite, apologise and maybe wear some sack cloth, cover its head with ashes and do a fair amount of public wailing but it will also, eventually, need to move on and one possible route is an even more campaigning future.

This is a paper which is read by around 7 million people every Sunday, not just an impressive figure but a powerful one. This is a paper courted by politicians of every hue because of its influence over so many. This is a brand with an enormous opportunity to re-define its entire brand story, to put its shady and seemingly illegal past firmly behind it by finding a new narrative to follow, a narrative that is entirely positive.

If you look across British life there are lots of areas we could improve and if you begin to break it down even simplistically into political, environmental, social, technological, legal and economic, you can probably come up with a few yourself. Now imagine the most widely read newspaper in Britain running multi-platform campaigns in some of these areas.

I know some are talking about the ‘end of the News of the World’ but they’re kidding themselves. Some people there have behaved abominably and will, rightly, suffer the consequences. But like all crises this one represents an enormous opportunity and maybe it’s the NotW’s opportunity to redefine itself as a brand ‘for good’ in both senses.

As we observe News International’s phone hacking crisis lurch from bad to truly horrendous, it’s tempting to feel a little smug, safe in the knowledge that nothing quite this awful could ever affect our business.  But whilst the alleged behaviour of the newspaper and its private investigators sinks below the behaviour of the vast majority of corporations, there are nevertheless lessons in crisis management that businesses would do well to heed.

1) Your corporate culture has the power to create or prevent crisis

Reports from ex-News of the World journalists and other sources indicate that reporters were under enormous pressure to come up with the next scoop, whatever it took.  This would likely lead to an atmosphere where the end result is all that matters: this is exactly the culture in which crises can flourish.

In a corporate environment, similar issues can arise.  A blinkered focus on the bottom line – “I don’t care how you do it, just hit the number” – or an unwillingness to hear about problems which may hint at broader failings - “just sort it out” – are examples of this.

The best crisis management is crisis prevention: this requires leaders to set and exemplify the right culture.

2) Denial is your greatest enemy (part one)

The News of the World appears to be suffering from denial in both senses of the word.  Its initial response was to deny that widespread hacking had taken place. That early denial has been thoroughly undermined by subsequent developments. The effect is that the credibility of the newspaper’s subsequent statements are diminished.  Worse, the paper is seen as either incompetent or disingenuous in making the initial claim.

Businesses must heed this important crisis communication lesson: never make a public statement unless you are 100% certain of its truth. Ignore this, and serious reputational damage will inevitably follow.

3) Denial is your greatest enemy (part two)

Denial that there was a problem may be one of the key reasons why the News of the World has been unable to get to grips with its reputational challenge.  Businesses can suffer the same fate.  When a negative situation faces a corporation there’s a temptation to dis-believe or ignore it: leaders can find it almost impossible to comprehend that such a thing could afflict their business.  The problem is that until you recognise and acknowledge a problem, you cannot deal with it.  Beware corporate denial at all costs.

4) Pay special attention to the internally generated crisis

The News of the World is facing a crisis of its own making, created by the behaviours of its own employees.  This makes its crisis communication challenge so much harder.  The same applies to other businesses: accidents, natural disasters, even terrorist attacks all constitute crises and require professional management.  But the fact that the organisation in question is also a victim of the event gives them a degree of sympathy and understanding in responding to it. Don’t abuse this position: many businesses have suffered sgnificant reputational damage not because of the crisis itself, but because of the way in which they have mis-managed their response to it.

Far more challenging though is the self-inflcted crisis, where no one is at fault but the organisation itself.  Exacerbating this is the fact that many businesses fail to plan thoroughly for the internally generated crisis (it’s much more uncomfortable to contemplate management fraud or sexual harassment than it is to plan for a fire).

Businesses must avoid being blind-sided by internally generated crises by properly considering them as part of their reputational risk assessments, and testing their ability to respond via a well-conceived programme of crisis communication training.

Manage the crisis – don’t let it manage you

The News of the World has failed to apply effective crisis management to the phone hacking saga: the crisis seems to have managed it rather than the other way round.  And that really is the final learning for all businesses: effective crisis communication is about recognising a problem quickly; taking decisive action to address it; and communicating pro-actively to stakeholders to protect relationships and reputation.  News International appears to have failed on all counts.

Jonathan Hemus

www.insigniacomms.com