Insignia Talks

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

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

I attended a conference earlier this week at which the head of corporate communications from a UK police force described the overwhelming media interest in a high profile murder investigation.  In particular, she  explained how the names and personal details (not necessarily accurate) of two people were communicated by the media within hours of their arrest and then widely circulated by social media.  This happened despite the fact that the names were not revealed by the police (and that one of them was never charged with any offence). 

The speaker explained how this experience has led to an increased understanding within the Force of the importance of involving communication professionals before an arrest is made in high profile cases.  It struck me that this has broader implications for crisis communications at all organisations.

It’s already well understood by PR people that social media has increased the pace and spread of bad news and that this imposes new standards for effective crisis communication.  But to what extent has this been recognised by our operational colleagues?  Scrambling to react to operational decisions with a communication dustpan and brush was never a very good idea.  Today it is an almost impossible task.

The only viable option is  for communication people to be involved in the planning of major announcements and to have a real influence over how and when they happen.  This is the only approach which offers the opportunity to properly shape how a story plays out and its impact on organisational reputation.  Organisations which fail to embrace this reality and continue to view communication as a purely tactical activity are more likely than ever to suffer serious reputational damage. 

Jonathan Hemus

www.insigniacomms

Earlier this year I blogged about how the principles of excellent customer service could be applied to effective crisis communication.  A personal experience illustrates perfectly how poor customer service also proves the point.

A year ago I bought an HTC Desire phone.  It’s been fantastic – I’ve recommended it to many friends and business associates.  A couple of months ago, it began to overheat and shut down during long calls.  I contacted HTC who agreed to repair it under warranty and said that I should expect it to be returned in five working days: UPS picked it up for repair on Monday 11 April.  Thirty-eight days later and HTC still have not returned my phone, provided a replacement or any form of compensation despite many, many phone calls and emails from me to them.  It appears that many other HTC customers are suffering similar problems.

Given that this is a blog about communication, it is HTC’s approach to communication and its lessons for other businesses engaging in crisis management that I will focus on here (though the temptation simply to rant is very strong!).

Throughout the episode, HTC’s contact centre has been unfailingly polite, empathetic and professional in their conversations with me.  As a consequence, they ticked the first box of crisis communication - empathise with the impact of your problem on those affected by it. 

But the process has stalled at this first stage: HTC has failed to take action to address the situation and communicate these steps to its stakeholders.  It remains mired in apology and empathy mode: this is a good start but without tangible evidence of action, stakeholders remain frustrated and begin to doubt whether the business really cares about the effect it is having on its customers.  Words are important; action is essential.

Contradictory messages and unfulfilled promises further threaten the reputation of organisations engaged in crisis communication.  So, when a couple of weeks ago HTC told me that my phone was being repaired and promised to return it by the following Tuesday, it further diminished my trust when this failed to happen and I was subsequently told that the necessary spare parts had still not arrrived at the repair centre.  

The bottom line is this: effective and empathetic crisis communication is essential if businesses are to protect their reputations.  But soothing words are not enough.  Swift actions, well communicated are necessary if the organisation is to emerge unscathed.  Companies that fail to do this are likely to lose business and suffer from negative word of mouth. 

I’ve just taken delivery of an iphone and I have very much enjoyed drafting this blog posting.

Jonathan Hemus

www.insigniacomms.com

Communication professionals like myself have long fought to establish PR as the equal of advertising.  This has led to countless debates about effectiveness, return on investment and evaluation.

Now that the battle is won (I think), have we actually shot ourselves in the foot? I ask this question as a result of talking to a regional newspaper editor recently.  His view is that PR people have so comprehensively won the argument, that when the economy contracted, businesses were confident that advertising budgets could be slashed and PR relied upon instead.

So far so good for the PR profession.  But the effect is that the very publications, TV and radio stations that PR people are trying to  reach are being starved of advertising revenue and forced to cut their frequency, pagination…or go out of business altogether.

The ultimate scenario could  be thousands of PR professionals hugely skilled in reputation management and businesses totally convinced of the power of PR…but nowhere for their stories to appear.  Of course, there are new and direct channels available, in particular online reputation management, and these are undoubtedly powerful means of commmunicating a corporate reputation.

But perhaps we do need to be a little wary of pushing the PR message to the extreme: we might be better served in the long term by suggesting to colleagues and clients that they spend a little more on advertising.  I can’t believe I just wrote that.

Jonathan Hemus

www.insigniacommms.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

2010 has seen more high profile crises than any other year I can remember, and they have affected some of the world’s largest and most admired businesses.  BP, Toyota, Apple, Eurostar, Prudential and Goldman Sachs are just some of the big names to battle their own crisis this year.  And the damage to reputation (and their financials) has been enormous and incontrovertible. 

My hope was that this might stir other businesses to recognise that their reputations are equally vulnerable and, as a consequence, enhance their crisis management plans and processes.  Some businesses have.  But I have a strong sense that many still believe that crises only happen to other people, and that because they don’t drill for oil or manufacture motorcars, that they are protected.  I just don’t buy that argument.

Whilst it’s true that a crisis of the scale and nature of the BP catastrophe is highly unlikely to afflict many businesses, there are plenty of other issues, incidents and crises that can.  BP’s disaster has cost it a third of its market value, tens of billions of dollars to put the situation right, tens of thousands of hours of management time, its chief executive and its good name.  A crisis that has 1% of this impact on your business is surely worth avoiding  or managing effectively wouldn’t you say?

28 day campaign to highlight scale and scope of crises

So, today, I am beginning a 28 day campaign to highlight the sheer number and diversity of crises affecting organisations from all sectors every day.  Not all of them will be cataclysmic or even high profile, but each will be costing money to manage, as well as management time.  I want to illustrate that you don’t have to be BP or Toyota to suffer a crisis, and to shed light on the range of crises encountered by businesses today: you may find that you are vulnerable to some of them.  My aim in this exercise is not to judge the effectiveness with which organisations are managing their  incidents.  It is simply to highlight the frequency and nature of crisis events and therefore the requirement for all organisations to prepare thorough crisis communication plans.

My daily list will, of course, not be definitive or comprehensive – I don’t have enough time for  that! – but do feel free to let me know about crises you spot to add to the list.  Please contact me via jonathanhemus@insigniacomms.com, @jhemusinsignia or simply post a comment to the blog.

Day one

Here are the organisations I spotted which have been dealing with a crisis over the last 24 hours:

Astra Zeneca: pharmaceuticals; UK strike AND withdrawal of Avandia drug

David Beckham: celebrity, sportsman; allegations about private life

Bentley: automotive sector; product recall

Blockbusters: retail/entertainment; filing for bankruptcy

Facebook: online/media; unavailability of site

International Cricket Council: sport; corruption

National Express: transport: spoof Twitter feed

Santander: financial services; customer service issue highlighted on BBC Watchdog

Stena Line: travel; management gaffe/employee relations

Spare a thought for the communication teams at these organisations who will be looking forward to a weekend of firefighting; and spare a though too for your own crisis plans – would they protect your reputation if an issue like one of these was to emerge today?

Jonathan Hemus

www.insigniacomms.com

Tony Hayward - a lack of empathy

In recent postings, we’ve taken a close look at the role of the CEO in crisis management.  In the final posting on this topic for now, we list some of the key qualities required by a chief executive in this context:

1)      Leadership

Leadership is a quality one would expect from a CEO at all times, but the stakes are even higher in a crisis: it is the ultimate test for a senior management team.  The outside world will re-evaluate the ability of the senior management team – and the worth of the business – dependent on how it manages the crisis.  Demonstrating leadership and the cool-headed ability to make critical decisions under the most intense pressure are pre-requisites for success.

2)      Empathy

A focus on and understanding of the effect of your crisis on impacted stakeholders is essential, and that requires a CEO who can listen as well as talk.  Conversely, a focus on what the crisis means for our business, or worse, what the crisis means for me as CEO is guaranteed to alienate stakeholders and make a bad situation even worse.  It’s one of the key reasons that Tony Hayward endured such a torrid time during his leadership of the BP crisis.

3)      Strategic planning

Reacting to a crisis is rarely an effective approach – it means that the crisis manages the business rather than the other way round.  So, an ability to be clear on the objectives for crisis management activity, to see into the future and therefore plan the best course of action are invaluable skills for a CEO in crisis management mode.

4)      Integrity

Nothing does more damage in a crisis than double-talk or downright dishonesty.  A CEO who is straight-forward, honest and acknowledges responsibility will retain credibility and therefore the ability to be heard during a crisis.  This is essential if the organisation is to exert influence on how the situation plays out, and emerge unscathed at the other end.

5)      Communication

If the CEO is to play the role of lead media spokesperson, they must be a supreme communicator.  The words of the CEO will be tested, analysed and used against them if they slip up.  And when we’re managing reputation in an online age, we’re no longer talking about today’s press comment being tomorrow’s fish and chip paper.  Twitter ensures that today’s gaffe has gone twice round the world by tomorrow and is preserved forever on YouTube and/or Google.

Being a CEO in a crisis tests business heads to the limit.  People who have been successful when running “business as usual” can quickly find their world unravelling when crisis strikes.  Others rise to the challenge, proving that they are not just great managers, but truly great leaders.

Jonathan Hemus

www.insigniacomms.com

Last week I was interviewed about the role of social media in crisis management and was asked whether it has changed the way that organisations deal with crises.  My view is that the fundamental principles that underpin good and effective communication remain exactly the same.  However, social media undoubtedly provides an expanded set of opportunites and threats when it comes to reputation management.

Let’s travel back in time just five years and imagine we witnessed a London Underground staff member being abusive to a passenger.  What would have happened?  We might have told the story to our partner over dinner that evening, saying how awful it was and that the member of staff should be disciplined.  Maybe one person in a hundred might even have taken the time to write to Transport for London, though they would not have been able to identify the member of staff, and in any case, it would have been their word against his.

Travel back to the present day and here’s  how a real incident at Holborn tube station plays out.  The incident is not just witnessed by a passenger, it is also captured using his mobile phone.  When he gets to work, he blogs about it and posts the footage to YouTube.  People come across the footage and begin to Tweet about how disgusting the staff member’s behaviour is.  Twitter users within the media spot the Tweets and begin to look into the story.  By the middle of the afternoon, London Mayor Boris Johnson is tweeting about it (“appalled by the video.  Have asked Tfl to investigate urgently.  Abuse by passengers or staff is never acceptable”).

By the evening, the story had moved firmly from an online issue to a “real world” one, with coverage on Sky and ITN.  The next morning the story was in the national newspapers including the Daily Mail and, of course, its website.  The latter provides yet another opportunity for the story to endure and spread, fed by reader comments posted about the story (over 500 in the Daily Mail alone).

This was not a major crisis that lasted for weeks and destroyed the reputation of an organisation.  It does however highlight how incidents which would once have resulted in a dinner table conversation between two people can now reach millions of people within hours.  Understanding this and having a crisis communication infrastucture to deal with it is essential for any business seeking to protect its reputation in an online world. 

Jonathan Hemus

www.insigniacomms.com