Insignia Talks

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

My previous blog posting looked at the dramatically different context for reputation management in an era of total transparency, and the challenges this presents to leaders wishing to communicate and build trust with stakeholders.

Here’s a copy of the full presentation from my session with Common Purpose:

Against this background, successful reputation management requires adherence to the following six principles:

1. Build and nurture trust – its value is at an all-time high

With any given commodity, scarcity increases value and this applies just as much to trust as it does to gold.  Given that trust is in short supply, today’s leaders must nurture, cherish and preserve it.  This means taking a long term view when making any decisions which may undermine trust.  Because unlike other commodities, when trust is depleted it’s not possible simply to buy some more.

2. Expect your every move and word to be public knowledge

Act and communicate in a way that you would be proud to see splashed across the front page of every newspaper in the country.  Any other behaviour carries a significant risk of reputational damage in a truly transparent world.

3. Plan for the challenges that social media brings

A crisis management plan designed to protect reputation three years ago will be insufficient for effective crisis communication today.  Re-assess it, your resources and crisis management training to preserve reputation in a social media age.

4. Embrace the opportunities that social media provides

Many of the new challenges of leadership are created by the emergence of social media, but so are new opportunities.  Build relationships, listen to your stakeholders and communicate in the authentic, human way that people expect in this new context.

5. Earn reputation; don’t create an image

I am firmly of the belief that spin is dead and I do not mourn its passing.  Act and communicate authentically to build trust and an enduring reputation.

6. Be true to your values when crisis strikes or suffer the consequences

A crisis is the acid test of leadership.  When the chips are down, do you act in accordance with your culture, values and reputation?  Or does pragmatism, short term financial considerations and expedience take precedence?  The choice you make will have enormous ramifications for your reputation – and organisational success – in future.

Successful leadership and communication is much tougher today than ever before.  But for those leaders who understand the new context and embrace the principles above, there is a clear opportunity to out-perform peers who cling to the old ways which simply don’t work anymore.

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 a  TV documentary team goes undercover to expose malpractice in your sector, important decisions need to be made about your issues management strategy.

So it was fascinating to observe how Viagogo and Seatwave adopted entirely different reputation protection strategies when Channel 4′s Dispatches looked into the “the great ticket scandal”.  Using secret cameras, reporters posed as employees of both businesses to investigate how peer to peer ticket exchanges operate.  Among the allegations were claims that many tickets are advertised by brokers rather than the general public and that ticket exchanges make money by buying from official sources then re-selling at a higher price.

So how did, Viagogo and Seatwave respond to the reputational challenge provided by the programme?

• Viagogo: bury the programme then bury your head

Viagogo, sought a high court injunction to prevent broadcast of the programme “to prevent customer information being made public”.  Whilst the injunction was initially secured, it was subsequently overturned by Channel 4.  The result: pre-broadcast press coverage which guaranteed greater attention on the programme than would otherwise have been the case. Legal action to suppress publication or broadcast of a story about your business is a legitimate tactic: but it is a last resort and a risky crisis management tactic (as Ryan Giggs would probably agree).

During the programme itself, Viagogo was silent, with no interviewee provided and there appears to be no statement or other information about the Dispatches programme in the media section of its website.

• Seatwave: put your case through your own channels

Seatwave also failed to provide a spokeseperson for the programme (though both companies offered a written statement).  Instead, it used its own social media channels – Tweets and a company blog penned by company founder Joe Cohen – to put its side of the story.  Mr Cohen tweeted throughout the programme and uploaded three blog postings during the course of two days explaining the Seatwave position.

By taking a pro-active approach, Seatwave ensured that Dispatches’ allegations did not pass unchallenged and also showed itself as a business prepared to address tough questions and stand behind its reputation.

Whatever you think of the business practices of Viagogo and Seatwave, it seems to me that Seatwave’s policy of engagement in adversity is the right one.  As one of the respondents to Joe Cohen’s blog said: “Thank you for the transparency in what you’ve posted here, it puts a much better impression of your company than certain other parties discussed in the documentary”.

Jonathan Hemus

www.insigniacomms.com

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

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

One of the main sub-stories of the August riots was the use of social media in inciting and organising rioters as they took to the streets.  Some commentators even called for social media to be “turned off”.

Now, whilst it’s clear that social media can indeed contribute to the escalation and spread of a crisis situation, it’s even more powerful as a crisis communication solution. That’s why I was so heartened to read a blog posting from Superintendent Mark Payne of West Midlands Police with his views on the subject.  I’d recommend you read his entire posting, but for now, consider these excerpts:

• One thing that we have seen over and over again during emergency situations is that where there is no information coming from the authorities, the gap will be plugged by speculation
• The very clear message is that people were reassured by following my feed, and believed it rather than all of the rumours that were flying about on the day
• If you use social media on a day to day basis, people start to trust your voice, and they are much more likely to turn to you for information in a crisis

It seems clear to me that these are crisis communication lessons not just for the police force, but for corporate communicators too.  Anyone in the business of reputation protection should be paying full attention to the impact of social media, and planning for its use in crisis management.  Applying the principles suggested by Superintendant Payne would be a very good start.

Jonathan Hemus

www.insigniacomms.com