Insignia Talks

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

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

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

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

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

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

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

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

Jonathan Hemus
www.insigniacomms.com

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

Xerox’s recent attempts to engage with Twitter (for example through Promoted Tweets) and Pinterest have been met with a rather lukewarm reaction. The high expectations were simply not met. Christa Carone, Xerox’s chief marketing officer, observed that social media for B2B companies may not constitute the best investment of time. She said: “I know that the CIOs of major companies are not going to be making a $5 million… deal based on their connection with Xerox on Facebook.” So, should B2B companies jump off or stay on the social media bandwagon?

Ultimately, social media provides just another set of channels through which businesses can reach their stakeholders.  Just like any other communication channel, some are better suited to achieving certain objectives than others.  And some are suited to certain organisations more than others.

As Xerox is quickly recognizing, it’s about using the right channels for the right tasks.

Many organisations are still feeling their way with regard to social media, and this is certainly true of business to business operations and corporates. There’s a degree of trial and error, and figuring out what works best to achieve certain tasks such as brand-building, reputation protection, customer engagement or pure sales. As with other communication techniques, the key is to measure and evaluate what works best and amend campaigns accordingly.

There’s no doubt in my mind that social media has an important role to play for B2B organisations. The question that organisations need to answer is exactly what that role should be. Those that come up with the answer quickest are likely to achieve competitive advantage over their peers.

Further analysis of the issue can be found on Ragan’s website.

Jonathan Hemus

www.insigniacomms.com

This year’s TrustBarometer from Edelman shows that trust in chief executives has plummeted: only four in ten people view CEOs as “credible spokespeople”.  This finding underlines the enormous challenge that businesses face in achieving successful reputation management today.

It is also the background against which I led a workshop for business leaders at a recent Common Purpose event.  Whether representing banks, charities, professional services, educational establishments, the emergency services or arts organisations, all of these leaders are faced with the challenge of building trust in an era of total transparency.

The context in which leaders must communicate and manage reputation is very different to the one they faced five short years ago.  It is characterised by:

• A lack of trust

Ever since Enron, trust in business has declined: the banking crisis has further eroded the regard with which we view businesses and their bosses.  This means that leaders have to build credibility and trust in order for their communication to be effective.

• The death of deference

Respect for all establishments has diminished dramatically: it’s hardly surprising when people perceive that a Prime Minister may be economical with the truth in order to take us to war.  This means that leaders should expect to be challenged on what they say, rather than people believing them just because they are an authority figure.

• Greater scepticism

People simply don’t believe what they’re told these days, and why should they?  After all, News International told us that phone hacking was isolated to a couple of rogue reporters.  This means that leaders cannot simply assert something; they need to prove it with evidence and actions.

• Increased transparency

In the bad old days, organisations could say one thing and do another.  The transparency provided by social media means that those days are gone forever.  Business leaders should expect that anything they say or do behind supposedly closed doors will become public knowledge.  Communicate and act accordingly.

• Expectation  of swift and expansive communication

One of the old strategies for crisis communication was to keep your head down, say nothing and hope that the problem would blow over.  It was rarely a good strategy then, and it’s even less likely to be viable today.  The speed and spread of crises, driven by social media, requires leaders and their organisations to respond quickly and broadly if a problem occurs.  Crisis planning is essential if reputation is to be protected.

• A loss of control

Power used to lie in the hands of big business and that conferred control.  Today, stakeholders – employees, customers, neighbours – have the ability to damage your reputation and business if you don’t engage with them properly (take a look at what happened to LA Fitness when it tried to play hardball with one of its customers).   Leaders must listen and engage with their stakeholders if they are to retain the value of their reputation.

• Demand for authenticity

In an era when trust and respect is in short supply, genuinely authentic business leaders will prosper.  People will be attracted to them, follow and support them.  The greatest test of authenticity comes when the organisation faces a crisis: a reputation which has been built over many years will rest upon the words and actions of the business and its leader at a time of maximum pressure.  Saying and doing the right thing in accordance with your values is essential to protect your reputation.

The new context for business leadership is extremely challenging, but provides enormous opportunities for executives who understand and embrace it.  Our next blog posting will provide a framework for doing so.

NB. Photos from the workshop are available on Insignia’s Facebook page. Feel free to visit us there.

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

An interview with national radio provides a wonderful opportunity to enhance the reputation of your business, especially when you have good news to tell.  So, when Subway’s President and co-founder Fred DeLuca was invited for an interview on BBC Radio Five Live’s breakfast show following positive financial results and the creation of new jobs, he  should  have been rubbing his hands with glee.

Had he remembered his media training – assuming he had indeed invested in media training – he would have known that the key to success is preparation.  Without proper preparation, a media  interview is a high risk scenario as Mr DeLuca found out to his cost.  (Listen here from 2 hours 51 minutes onwards)

Listen to how he begins to fumble around, giving hesitant and unconvincing answers, refusing to comment and failing to properly address questions about pricing, health and animal welfare.

Avoiding this fate comes down to spending time beforehand developing a plan for your media interview.

Here are three areas to focus on as essential preparation for any media spokesperson:

1) What are the best and worst case scenarios for this interview?

Knowing the best case scenario for your interview (imagining the perfect headline is a useful way of encapsulating this) is an important way of setting the agenda during your media encounter.  It is only by understanding your objective that you can shape and steer the discussion.  Equally, it is only by assessing the worst case scenario – the lines you want to avoid – that you can be prepared to bridge away from those areas and back on to safer ground.

2) What are the questions I would least like to answer?

One of my mottos for crisis communication is “plan for the worst and hope for the best”; unfortunately, too many spokespeople simply hope for the best.  Taking time to predict the toughest questions and preparing strong answers for them means that you approach a media interview with confidence based on the knowledge that you can handle whatever the journalist throws at you.  And do have key facts and figures at your fingertips (the fact that Mr DeLuca was unable to confirm the prices of his sandwiches undermined his credibility)

3) Rehearse

Too many spokespeople simply “wing it”, conducting interviews without any practice.  It may be a risk worth taking for a low key interview with an obscure trade title, but not when you are broadcasting to the nation.  Take time to practice with a colleague or trusted third party: it helps you to finesse your messaging rather than testing it for the first time in a live interview.  For maximum value, take feedback from a third party who not only understands communication and the media, but who is also prepared to give you honest and constructive feedback.

Media interviews are indeed opportunities, and too few spokespeople view them as such. However, they should not be approached without proper preparation and media training or else the opportunity may evaporate and turn into something far more unpleasant instead.

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