Insignia Talks

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

As I glanced through the statement issued by Costa Cruises in the wake of the dreadful Costa Concordia accident, I noticed how it ticked the golden rules for crisis communication: concern and empathy for human life in para one; actions to address the situation in para two; messages about minimisation of environmental impact in para three.

So far, so good.  And then, in para four, I read this:

“preliminary indications are that there may have been significant human error on the part of the ship’s Master, Captain Francesco Schettino, which resulted in these grave consequences”

It is the earliest and most explicit attempt to blame an employee for an incident that I have ever seen, and at best, I view it as an extremely high risk crisis management strategy.

Here’s why:

• it creates the impression of a business willing to jump to conclusions before all the facts are known, rather than keeping a cool head
• it infers that the business’s top priority is protecting its own commercial interests and will use any means to do this, rather than focusing all attention on the human impact at this early stage
• it implies a separation between company and employee which could be seen as artificial
• it portrays an unflattering picture of a large business prepared to cast an individual employee adrift when the going gets tough
• it creates further fuel for an extended crisis – controversy – as the captain denies the accusations

And what if investigations conclude that the captain was not to blame?  In this situation, Costa Cruise’s early pronouncement would be hugely damaging to reputation.

Effective crisis  management is of course about using all means at your disposal to protect corporate reputation.  But that doesn’t mean applying the most expedient and pragmatic message without careful thought. Statements and pronouncements from media spokespeople must be delivered with a clear understanding of not just the immediate term impact, but also how the business wants to be regarded a year later.

As a final point, history shows that businesses which pin crises on “human error” have frequently created the conditions in which human error is likely: insufficient training, a culture of profit before safety or an environment in which front-line employees are afraid to voice concerns, are all conditions which make a “human error” much more likely.

So, even if Costa Cruise’s allegation turns out to be true, it may still not be enough to protect its 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

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

Preserving UBS’s reputation

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

A lack of credit in the bank

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

Tight-lipped communication

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

Pro-active crisis communication required

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

Jonathan Hemus

www.insigniacomms.com

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

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

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

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

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

Update

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

Update 2 (26 Aug)

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

Jonathan Hemus

www.insigniacomms.com

For a country whose econony relies on tourism, there’s no bigger crisis communication challenge than dealing with a fatal shark attack.  So it’s little wonder that the Seychelles’ crisis media spokesperson, tourism chief Alain St Ange, sounded under pressure when conducting media interviews about the death of British tourist Ian Redmond.

What is surprising though is that he should have made so many fundamental and damaging mistakes in the way he handled his media interviews.  A thorough reputational risk assessment should identify the crisis scenarios capable of seriously damaging a reputation so that thorough crisis communication training and planning can take place ahead of  a possible crisis event.  Either a shark attack had not been identified as a potential risk (a serious oversight) or insufficient crisis media training had taken place to identify and prepare a spokesperson to deal with such an event.

So where exactly did Mr St Ange go wrong?  Listen to this early BBC interview which illustrates the following errors:

1) Inappropriate balance between messages about the victim versus messages about the Seychelles

Whilst Mr St Ange expresses sympathy for the victim and his family, this is out-weighed by messages focused inwardly on the Seychelles.  This smacks of self-interest and self-justification.  He twice describes the country as being “innocent” as though apportioning (or avoiding) blame is the priority at this stage.  More than this, his attempt to position the attacker as a “foreign shark”  and by inference not the responsibility of the Seychelles, stretches credulity.  The impression created – rightly or wrongly – is that the spokesperson cares more about the impact on business in the Seychelles than the human tragedy.  In other words, the exact opposite of what he should be communicating.

2) Inappropriate tone of  voice

It’s not just what you say, it’s how you say it.  Mr St Ange fails to convincingly communicate compassion in his tone of voice.  Instead, he sounds business-like, matter of fact and slightly brusque.  The impression is  of someone slightly irritated that he is having to deal with a problem (and the media), rather than someone who cares deeply about what has happened.  Some may argue that the fact he is not a native English speaker is a key factor in his vocal delivery.  I say that’s not good enough: when your reputation is on the line, you cannot afford to field a spokesperson who is unable to create the right perceptions among viewers and listeners.  Crisis communication training is essential to identify and enahnce the skills of your crisis spokespeople

In this later clip, again featuring Alain St Ange, a further problem arises:

3) Poor preparation leads to unwanted headlines

Mr St Ange continues to defend the actions taken by the Seychelles to protect tourists, but in an apparently throw away remark – again communicated in a casual tone of voice - he concedes “we did try, but maybe not enough”.  Guess what the headlines were after this interview?  Almost universally, along the lines of “Seychelles tourism chief admits we could have done more”.  My criticism is not so much the message itself – acknowledging mistakes and committing to address them can be a very powerful and engaging message – more that it appeared to emerge in an unplanned way.  More than this, it seemed to conflict with earlier messages which sought to distance the Seychelles from blame.  To be successful, crisis spokespeople must know exactly want they want to communicate in a media interview and be pro-active in getting those messages across.  Consistency of message is crucial: media interest in crises can be sustained much longer in the event of mixed or conflicting messages.

The role of spokesperson in a crisis carries significant responsibility.  In addition to successfully communicating important information to stakeholders, the impression they create will influence longer term perceptions of the affected organisation.  Choosing the right person for this task, training them properly and providing them with the right messages can make  the differnce between preserving reputation, and seeing it severely damaged.

Jonathan Hemus

www.insigniacomms.com

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

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

1) Take decisive action to address the problem

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

2) Say sorry

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

3)  Communicate pro-actively

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

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

Jonathan Hemus

www.insigniacomms.com

Yesterday we considered the crisis communication lessons that businesses could learn from the News of the World hacking scandal.  Today, guest blogger Nick Woods, head of Publicis Consultants, considers how the paper might recover from its current crisis management challenges.

If you believe Rousseau, man is essentially good. He, or she, has flaws but the start point is that they are born good.

Your view on how this applies to Rupert Murdoch, Rebekah Brooks, Andy Coulson, Glenn Mulcaire or the coppers that sold stories is yours to ponder but it raises an interesting point about brands.

Very few brands are ‘born good’, rather they are created with the express purpose of making money for their owner.  But that doesn’t mean they shouldn’t do good, as the NotW is proving – doing good isn’t just a useful pillar when things begin to go wrong it also provides a new potential strategic direction.

The News of the World has, undoubtedly, behaved appallingly and it seems likely we’ll see inquiries, new laws and hefty punishments for those who thought they were above the law.

But, as Colin Myler said in his letter to staff yesterday, the paper has also done some very good things:

“We are the paper that campaigned to enshrine the Military Covenant in law, fought for ten years to establish Sarah’s Law into legislation, the paper of Children’s Champions, the paper that has fought tirelessly against bullying and so much more.”

On top of these they have been one of Help for Heroes’ leading champions; the irony of last night’s reports that they also hacked into the phones of dead servicemen is lost on no-one.

This ‘good’ work could form a part of the brand’s recovery (and recover it surely shall – I predict a circulation spank this Sunday and then a full recovery over subsequent weeks with advertisers quietly returning).

The paper will undoubtedly have to be contrite, apologise and maybe wear some sack cloth, cover its head with ashes and do a fair amount of public wailing but it will also, eventually, need to move on and one possible route is an even more campaigning future.

This is a paper which is read by around 7 million people every Sunday, not just an impressive figure but a powerful one. This is a paper courted by politicians of every hue because of its influence over so many. This is a brand with an enormous opportunity to re-define its entire brand story, to put its shady and seemingly illegal past firmly behind it by finding a new narrative to follow, a narrative that is entirely positive.

If you look across British life there are lots of areas we could improve and if you begin to break it down even simplistically into political, environmental, social, technological, legal and economic, you can probably come up with a few yourself. Now imagine the most widely read newspaper in Britain running multi-platform campaigns in some of these areas.

I know some are talking about the ‘end of the News of the World’ but they’re kidding themselves. Some people there have behaved abominably and will, rightly, suffer the consequences. But like all crises this one represents an enormous opportunity and maybe it’s the NotW’s opportunity to redefine itself as a brand ‘for good’ in both senses.

As we observe News International’s phone hacking crisis lurch from bad to truly horrendous, it’s tempting to feel a little smug, safe in the knowledge that nothing quite this awful could ever affect our business.  But whilst the alleged behaviour of the newspaper and its private investigators sinks below the behaviour of the vast majority of corporations, there are nevertheless lessons in crisis management that businesses would do well to heed.

1) Your corporate culture has the power to create or prevent crisis

Reports from ex-News of the World journalists and other sources indicate that reporters were under enormous pressure to come up with the next scoop, whatever it took.  This would likely lead to an atmosphere where the end result is all that matters: this is exactly the culture in which crises can flourish.

In a corporate environment, similar issues can arise.  A blinkered focus on the bottom line – “I don’t care how you do it, just hit the number” – or an unwillingness to hear about problems which may hint at broader failings - “just sort it out” – are examples of this.

The best crisis management is crisis prevention: this requires leaders to set and exemplify the right culture.

2) Denial is your greatest enemy (part one)

The News of the World appears to be suffering from denial in both senses of the word.  Its initial response was to deny that widespread hacking had taken place. That early denial has been thoroughly undermined by subsequent developments. The effect is that the credibility of the newspaper’s subsequent statements are diminished.  Worse, the paper is seen as either incompetent or disingenuous in making the initial claim.

Businesses must heed this important crisis communication lesson: never make a public statement unless you are 100% certain of its truth. Ignore this, and serious reputational damage will inevitably follow.

3) Denial is your greatest enemy (part two)

Denial that there was a problem may be one of the key reasons why the News of the World has been unable to get to grips with its reputational challenge.  Businesses can suffer the same fate.  When a negative situation faces a corporation there’s a temptation to dis-believe or ignore it: leaders can find it almost impossible to comprehend that such a thing could afflict their business.  The problem is that until you recognise and acknowledge a problem, you cannot deal with it.  Beware corporate denial at all costs.

4) Pay special attention to the internally generated crisis

The News of the World is facing a crisis of its own making, created by the behaviours of its own employees.  This makes its crisis communication challenge so much harder.  The same applies to other businesses: accidents, natural disasters, even terrorist attacks all constitute crises and require professional management.  But the fact that the organisation in question is also a victim of the event gives them a degree of sympathy and understanding in responding to it. Don’t abuse this position: many businesses have suffered sgnificant reputational damage not because of the crisis itself, but because of the way in which they have mis-managed their response to it.

Far more challenging though is the self-inflcted crisis, where no one is at fault but the organisation itself.  Exacerbating this is the fact that many businesses fail to plan thoroughly for the internally generated crisis (it’s much more uncomfortable to contemplate management fraud or sexual harassment than it is to plan for a fire).

Businesses must avoid being blind-sided by internally generated crises by properly considering them as part of their reputational risk assessments, and testing their ability to respond via a well-conceived programme of crisis communication training.

Manage the crisis – don’t let it manage you

The News of the World has failed to apply effective crisis management to the phone hacking saga: the crisis seems to have managed it rather than the other way round.  And that really is the final learning for all businesses: effective crisis communication is about recognising a problem quickly; taking decisive action to address it; and communicating pro-actively to stakeholders to protect relationships and reputation.  News International appears to have failed on all counts.

Jonathan Hemus

www.insigniacomms.com

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

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

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

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

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

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

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

Jonathan Hemus

www.insigniacomms.com

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