Insignia Talks

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

A series of YouTube videos by an American Airlines employee have added to the issues management challenges of a company already facing an uncertain business future.

The humorous videos by a flight attendant parody the firm’s management and reveal the content of an internal memo sent to staff.  A discussion is developing on ragan.com as to the appropriateness of American Airlines response to the issue and whether it has the right to “censor” its employees.

Crisis management is always more challenging when an issue is internally generated rather than caused by an external event.  To reduce the likelihood of such an incident and therefore minimise reputational harm, a strategy of prevention must be prioritised.  The critical first step in this is the introduction and internal communication of a social media policy.  Although many businesses already have such a policy in place, a significant minority do not.

Whilst a policy cannot entirely prevent an internally generated social media crisis, it does ensure that expectations are clear so that staff understand the ground rules for their use of social media.  Take a look at this site for examples of social media policies from some of the world’s biggest organisations.   American Airlines may well be taking an urgent look at it right now.

Jonathan Hemus

www.insigniacomms.com

The first few weeks of 2012 have seen a succession of businesses in crisis management mode as they fought to protect their reputations in the face of challenging events and issues.

Whilst the Costa Concordia disaster filled the news for weeks and required concerted crisis communication, RBS faced an issues management challenge over executive pay, LA Fitness grappled with a social media fuelled crisis and the issue of faulty breast implants tested the communication skills of clinicians, governments and scientists across Europe.  And these events are just the tip of the iceberg.

A crisis is by definition a critical even for an organisation, but research by Oxford Metrica shows that it is not the fact of suffering a crisis that damages a business – in reality no business can eliminate the possibility of a problem- rather, what really counts is how the organisation is seen to manage the crisis: take control quickly, respond professionally, and communicate well and the organisation is likely to prosper. Federal Express, for example, have been commended for the way in which it responded to a YouTube video which threatened reputational harm.

Conversely, dither, hide or appear to be uncaring, and tough – even terminal – challenges may lie ahead.

As a result, thorough crisis preparedness is essential so that the organisation can be off the starting blocks like an Olympic sprinter.  And – just like athletics – what used to be speedy enough to win a gold medal is now far from world class.  They used to say that the first 24 hours of a crisis were crucial.  The speed and spread of crises today – largely driven by the immediacy and reach of on-line media – makes a mockery of this golden rule.  Being prepared before the crisis breaks, and being able to respond almost instantaneously allows organisations to retain control over their destiny.  HSBC demonstrated the value of this preparation when its online banking and ATMs crashed late last year: it reacted quickly with a textbook crisis communication response.

An online world has not changed key principles of reputation protection: indeed, the old lessons of crisis preparedness still apply (but more so):

• Understand your areas of vulnerability
• Develop and implement crisis management plans and processes
• Rehearse the plan and enhance it
• Train your people, especially those required to act as a spokesperson in a crisis
• Monitor the landscape
• Engage in pro-active reputation management

But the power of social media to both create and destroy reputations presents a new and potentially scary dynamic.   And many organisations are still grappling with how to harness online media in the face of this potentially business-critical challenge.  It’s one of the reasons why Blackberry was so slow to respond with effective crisis communication to its network outage late last year.

Failing to prepare properly leaves an organisation frighteningly vulnerable in today’s world.  If a crisis is gestating online then the organisation must have the capability to also manage it online.  Sticking to traditional media has the potential for at least three negative results.  Firstly, you may fail to reach those people most affected and concerned by the crisis – the people talking about it online.  Secondly, you lose the opportunity to engage with the online community which has the power to spread positive messages about what the organisation is doing to deal with the situation.  And finally, you may further escalate the situation by communicating bad news to people who were previously unaware that there was a problem.

The key to success is a combination of traditional reputation management insights and expertise, and the application of the latest on-line reputation management tools to get the message through.

As the start point for online reputation management, companies should take the following five steps:

1. Develop crisis management “dark sites” or other online hubs to respond quickly, clearly and effectively to emerging issues and incidents
2. Ensure that it has identified and set up the infrastructure and resource to communicate via social media such as Twitter and Facebook
3. Implement online media monitoring to track what is being said about them in cyberspace
4. Develop the capability to quickly create content – latest information, briefing papers, podcasts, blogs – for online media
5. Build skills and confidence by running a realistic social media exercise

The internet has the power to spark and spread a crisis: but used effectively, digital tools have enormous potential to help organisations prevent and manage them too.  Having online resources in place beforehand leaves an organisation better placed to manage any crises that the rest of 2012 throws at us.

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

Concerns and coverage about potentially faulty breast implants produced by French company Poly Implant Prothese (PIP) continue more than two weeks after the story first broke.  This is a long time for a crisis to be in the media spotlight and indicates that crisis communication has been sub-optimal at best.

Indeed, a statement from the Independent Healthcare Advisory Services, the trade body which represents private clinics, accuses the government of communicating in a way which leaves people “feeling more confused and anxious now than before”.  It’s another reminder that effective crisis communication is essential when people are concerned for their health.

Women have been bombarded with mixed messages, which only increase their worries. While the UK authorities assert that there is no need to remove implants, countries such as France, Venezuela, Germany and Czech Republic have suggested that women have their implants removed as precautionary measures. According to the Lancet Medical Journal, it is ‘quite literally incredible’ for UK health officials to expect women not to worry.

The communication problem has been further exacerbated by the many and varied media spokespeople who have appeared on our televisions and radios over the last few weeks.  Everyone from the Medicines and Healthcare products Regulatory Agency (MHRA) through to individual cosmetic surgeons, trade associations, agony aunts, celebrities, government and patients have had their say.

So what makes for an effective media spokesperson during a health scare? We investigated this subject a couple of years back when, together with the University of Wolverhampton, we conducted research into swine flu communication. We looked at a range of spokespeople and used focus groups to assess their effectiveness and the reasons for their success – or lack of it.

The research clearly showed that high profile spokespeople have enormous power to reassure and inform the public in the event of a health scare.  Equally, they have the ability to cause unnecessary confusion, distress and concern if they fail to communicate effectively.  They need to recognise that this position of power also brings with it responsibility

We also identified the personal ingredients which defined a successful spokesperson at the time of a health scare.  Expressed as an equation, they are:

CS + SA + PA + AA = Reassurance (where CS is Credible Spokesperson, SA is Serious Appearance, PA is Personable Approach and AA is Actionable Advice)

Equally, credible spokespeople – doctors, scientists, academics – who provide worrying insights without clear and actionable advice can cause significant public anxiety. Given the impact that this communication has on the public, there’s a strong case for saying that people who are unable to match up to this set of criteria should not be put in front of the media during a major health scare.

Media training can help to identify whether a spokesperson is up the job or not, but also requires the potential commentator to be honest with themselves about their capabilities – or have a colleague who’s sufficiently honest and courageous to tell them the truth.

Having the ability to communicate effectively with the media is important at all times, but when your communication skills can affect the decisions someone makes about their health, I’d suggest it’s essential.

Jonathan Hemus

www.insigniacomms.com

With news that a “rogue trader” is responsible for a $2 billion loss, it is clear that Swiss bank UBS faces a huge crisis communication challenge.  A number of factors make this challenge even tougher than might otherwise be the case.

Preserving UBS’s reputation

Reports that the unauthorised trading was not picked up by UBS’s internal controls could suggest that the real crisis communication challenge centres not on the $2 billion loss, but in preserving the organisation’s reputation as a well managed, secure and professional operation.  These qualities need to be at the heart of any bank’s reputation and so any crisis which indicates their absence poses a major threat.

A lack of credit in the bank

A stock of reputational goodwill can be enormously valuable in a crisis: this can be built up with the right actions, relationship-building and pro-active communication ahead of time.  Unfortunately, UBS has a rather low stock of reputational credit currently.   Recent losses on toxic assets, a tax evasion dispute in the US and job cuts all contribute to an organisation which is low on reputational capital.  This is an unhelpful context from which to engage in crisis communication and protect reputation.

Tight-lipped communication

UBS has been extremely guarded in its crisis communication response with its most visible  presence being a 63 word statement about the issue on its website.  Others have been less tight-lipped. Ratings agencies, academics, journalists, financial analysts and other commentators have been quick to fill the vacuum.  Whilst this is undoubtedly a complex situation and the presence of lawyers will loom large, in a crisis of this magnitude, it is rarely the right strategy to stay so quiet.

Pro-active crisis communication required

The crisis poses a major challenge for UBS and threatens serious damage to its reputation and long term business (its shares dropped by 11% on the day that the news broke).   A pro-active approach to crisis communication may not be enough to fully preserve UBS’s reputational value, but I firmly believe that without it, the damage will be much more severe.

Jonathan Hemus

www.insigniacomms.com

If you heard that your regular painkiller could have been replaced with antipsychotic drugs instead, you might be a little concerned.  So concerned that you might want a little more information to put your mind at rest. 

That is the scenario facing purchasers of Nurofen Plus following an announcement from the Medicines and Healthcare Regulatory Agency (MHRA) that some packs contain not the expected Ibuprofen, but Seroquel XL, an antipsychotic drug used to treat conditions such as schizophrenia.

Go to the Nurofen website and there appears to be no information about the incident.  Move on to Nurofen’s Facebook page and there’s a great quiz, but no information about the product contamination.  Turn to the website of Reckitt Benckiser and still you won’t find any advice from Nurofen or its parent company. 

So, instead, you pick up the phone and call the consumer helpline listed on the Nurofen website. Unfortunately, news of  the incident hit the BBC around 6pm and the helpline shut at 5pm.

Businesses which want to reassure their customers and retain their loyalty during and after a crisis need to communicate with them.  That means being geared up to communicate via company websites and social media.  It means having the capability to man your customer helpline 24/7 if necessary.  Failing to do this leaves customers in the dark, potentially fearful and with your reputation in the hands of the commentators who are prepared to provide information.  It’s a high risk crisis communication strategy.

Update

Twelve hours later and a terse statement is now available on the Nurofen website, but it contains little information or reassurance.  At 8.06am the customer helpline is still closed and people are beginning to post to the Nurofen Facebook page, for example “Never mind the competitions , what about informing the public of the anti-depressants found in your packs?”.  No information about the problem can be found on Nurofen’s Facebook page.  People are also making their views known on Twitter.  More expansive crisis communication would surely be in Nurofen’s best interests?

Update 2 (26 Aug)

Nurofen has now announced a recall of all stock in retail outlets: a more expansive communication approach is now surely essential.

Jonathan Hemus

www.insigniacomms.com

News International has applied many of the right crisis communication tactics to preserve its reputation.  So why is it still suffering criticism and damage?

The first reason is of course the sheer magnitude of the issue, the alleged cover up and the time it was allowed to fester without resolution.  But the timing and sequencing of News International’s crisis management response is also partly to blame.  Let’s take a look at three golden rules of successful crisis communication, how News international applied them and why they failed to prevent reputational damage.

1) Take decisive action to address the problem

News International’s announcement of the closure of the News of  the World on 7 July was the epitome of a decisive move and could have marked a significant turning point in this drama.  It failed to do so because the decision left Rebekah Brooks in post, one of the few current employees who was working for the News of the World at the time the hacking took place.  As a consequence, the decision was seen as expedient, and current News of  the World journalists were perceived more as victims than villains.  More than this though, News International’s action in closing the paper and the words that accompanied it, still indicated an organisation in denial of the scale of its problem.

2) Say sorry

In a crisis, lawyers advise never to say sorry; communicators recommend that it should be the first step.  When News International said sorry via full page advertisements in the national press on 15 July, it started to get its tone of voice right for the very first time.  Even more powerfully, when Rupert Murdoch met with Milly Dowler’s parents to express his regret, even Mark Lewis, the Dowler’s lawyer, commented on his sincerity.  But the apology was way too late to have the  impact that News International desired: it was the right message at the wrong time.

3)  Communicate pro-actively

As a media organisation some have found it surprising that News International’s crisis communication has been so lacking: I see it as a very high profile example of “cobbler’s children”.  It was interesting to note that when Murdochs senior and junior spoke to the Commons Select Committee, News International’s share price went up.  By communicating willingly and pro-actively, organisations begin to exert control over a situation and their reputation.  But it doesn’t help when you appear to have been cajoled, kicking and screaming, to that point.

News International’s crisis really began with a culture which allowed – maybe implicitly encouraged – phone hacking and an inability or unwillingness to confront the problem.   When it exploded, its use of all of the right crisis communication tactics, but not necessarily in the right order, meant that recovery was all the harder.

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

When the BBC’s Panorama programme apparently showed Primark’s use of child labour in Bangalore, the retailer’s reputation took a serious hit.  With the recent BBC Trust report concluding that footage of boys checking stitching on Primark products was “more likely than not” “not genuine”, it is now the BBC whose reputation is under the microscope.  Indeed this is especially challenging for the BBC whose brand is associated with trust, integrity and high editorial standards.  As we have seen in previous incidents, when a crisis strikes at the heart of an organisation’s brand essence, it has the power to do more damage than would otherwise be the case.

Primark meanwhile has taken the opportunity to seize the communication agenda and lead the post-report debate (in contrast to the policy of non-engagement advocated by a recent Economist article).  Central to this is its microsite “Primark and Panorama; the true story” .  It includes:

• YouTube footage created in a reportage style which seeks to reveal the alleged falsehoods in Panorama’s original programme
• a detailed statement in response to the BBC Trust’s ruling (and a link to the full report)
• a timeline of events
• an ethical trade factsheet
• the opportunity for people to post comments to the site
• a “contact us” section for bloggers, the media, NGOs and other interested parties

The site serves as a template for other businesses wanting to pro-actively manage issues, rather than simply react to them.  Primark clearly made a decision to treat the publication of the report as an opportunity to surround stakeholders with materials and messages supportive of its position.  Using an online platform to host these materials and messages means that anyone interested in the Primark perspective can use it as a “one stop shop”.  Note also how Primark has made good use of search engine marketing to guarantee prominence for its point of view: search for “primark panorama” with Google and at the top of page one is a sponsored link to the microsite.  Without this core resource, Primark would still have been represented in the post-report discussion, but in a less prominent way.

I applaud Primark for the way in which it has exerted control of the communication agenda, but would also sound a word of warning to other businesses before replicating its response in totality.  In communication there are grey areas between influencing, spinning and manipulating. By failing to allow comments to be posted to its YouTube footage and by claiming that the BBC Trust had found that the footage was “fabricated” when the actual ruling fell short of stating this, Primark could be accused of over-stepping the mark. 

It’s also worth noting that the company’s robust and strident response carries an element of risk as it means that any future transgressions will be an even bigger story than would otherwise be the case.  With this in mind, Primark needs to plan both operationally and reputationally for the fact that it is a highly visible media target.

Finally, I would observe that an organisation’s crisis communication response needs to be in keeping with its usual tone of voice.  That’s why Ryanair can be bullish in response to a problem whereas Virgin Atlantic would tend to be more empathetic.  The way in which Primark has communicated following the Panorama programme mirrors its positioning as a down to earth, straight forward brand, underlining the fact that for crisis communication to be truly effective, it must be authentic.

Jonathan Hemus

www.insigniacomms.com