Insignia Talks

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

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

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

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

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

A recent article in the Economist reported that the best response to inaccurate online rumours was to ignore them, and instead communicate a barrage of good news.  This, the article contends, is the best form of issues management.

I only half agree.

Certainly, building a positive perception based on a strong and compelling corporate narrative should be the priority for any business which values its reputation.  Brands such as Virgin, Apple and Tesco have consistently communicated their vision and values to their stakeholders. 

As a consequence, stakeholders have a very clear understanding of who they are, what they do and what they stand for.  Crucially, their experience of products and services reinforce the messages they have received (where the experience fails to live up to the words, a business creates a transitory image, rather than a substantial reputation).

But where I disagree with the article is in the suggestion that untruths should always be left uncorrected.  Unchecked rumour, gossip and innuendo can become accepted as fact and cause significant damage to corporate reputation.

Here are three steps to define an appropriate response to an inaccurate allegation:

1)    Be aware that the allegation exists

Effective online reputation management depends upon knowing that there is a possible problem: many organisations have been unable to regain control of a situation simply because they became aware of it too late.  Ensure that you have thorough on and off line monitoring in place so that you can spot an issue before it becomes a crisis.

2)    Evaluate its potential influence and impact

Deciding which allegations to respond to and which to ignore requires you to assess the influence of its originator.  A lone blogger is probably worth leaving alone; it would be foolish to ignore criticism from the BBC’s Robert Peston.  Knowing beforehand the online influencers who really affect your stakeholders means that you can make well-informed judgements. 

Assessing the potential damage of the allegation will also help to determine your response.  Mild criticism of a product is part of day to day business life; allegations of endemic corruption call for pro-active crisis communication.

3)    Calibrate your response accordingly

Sometimes, a policy of non-engagement is indeed the right decision: a high profile response may create the oxygen of publicity that a scurrilous allegation requires.  On other occasions, a professional and straight forward response within the forum in which the comment appeared will help to balance the debate. 

If that’s insufficient, a statement to the media and reassuring messages via your own communication channels (websites, blogs and Twitter feeds for example) may be the best way to get your perspective across, without directly engaging with your misguided critic. 

In extreme and rare circumstances, legal action may be necessary to remove a clear untruth.  Be aware though that action of this kind often leads to exactly the kind of widespread publicity that you were seeking to avoid and trigger a much bigger dose of crisis management than the original allegation ever could.

There are no hard and fast rules for dealing with inaccurate criticism, despite what the Economist article suggests.  Judgement will always be required to do the best thing to protect the value inherent in your corporate reputation.

Jonathan Hemus

www.insigniacomms.com  

PR people looked on as two of the world’s most admired companies – BP and Toyota – suffered terrible crises this year, and wondered “could we be next?”.  Hopefully many have now moved on to considering what they could do in the light of these catastrophes to reduce their potential for reputational damage.  An earlier posting identified denial as the first common factor in the BP and Toyota crises.  The second – and inter-related factor – was an inability to mobilise a swift and comprehensive crisis response.

Now that it is fully developed, BP’s online crisis communication hub is an excellent resource: indeed it could be viewed as a template for others to follow.  But it took too long to construct and launch, and as a consequence BP’s social media response was too slow (for example, its first YouTube video appeared a full month after the rig exploded). 

In Toyota’s case, President Akio Toyoda was criticised for being invisible in the early stages of its crisis.   It’s therefore no surprise that in both situations the companies failed to seize early control of the communication agenda.  As a consequence they ended up reacting to events and were seen to be uncaring or ignorant of the growing crisis.

Actions for communicators to avoid this:

Be prepared – have thorough plans, processes and materials prepared beforehand. It’s obvious – but frequently ignored until it’s too late.

Train and test - a crisis is a communicator’s World Cup final: maximum pressure and intense attention means it’s the ultimate test.  Success is far more likely if each team member has trained hard so they are confident in the plan and their role in it.

Create online communication platforms – social and online communication channels get your messages to stakeholders quickly.  But only if you’ve prepared the channels, assigned the human resource and agreed the approval process beforehand

Speed of response has always been important in a crisis: today it is critical, and the benchmark for speedy has ratcheted up several notches.  Having the crisis management infrastructure in place, with a tested plan and a trained team breeds confidence and a greater ability to exert control.

A further posting will take a look at the third and final element common to BP and Toyota, and consider the central role that communicators can play in addressing it.

Jonathan Hemus

www.insigniacomms.com

As a Birmingham resident I’ve witnessed with great sadness the slow demise of LDV.  My sorrow has been doubled by the fact that the company communicated so brilliantly with its stakeholders at this most difficult of times.

Its blog became the number one source of online information for media, employees and all other interested parties.  It succeeded in filling the information vacuum and got information out quickly and directly to the people it needed to reach.  And it engaged with people, not just via the blog, but also via its Tweets and Facebook page.

I still feel that it’s a great example of how to communicate in a crisis and I just wish that the quality of its communication could have overcome the might of the global economic downturn.  But sometimes, just sometimes, I guess that even I have to admit that the power of communication alone is not quite enough.

Jonathan Hemus
www.insigniacomms.com