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

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

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

I was running a media training course with the board of a large organisation last week.  One of their team handled her first interview really well, demonstrating the empathy and control required for effective crisis communication.  Her only challenge was a lack of self-confidence: she found it hard to believe in herself despite the fact that she was very good at it!  The rest of the day was spent building up her confidence in her role of business communicator.

Speaking in public, especially with your colleagues present in the room, is a frequent source of stress for business executives.  People are fearful of messed up lines, incoherent body language or a trembling voice. Whilst communication skills training may be the best answer, here are some immediate tips to consider before facing the crowds.

1) Preparation is key

If you’re properly prepared, your confidence level rises automatically. It’s crucial to know your audience, to be familiar with the content of your speech, to select clear and engaging messages as well as to rehearse the final presentation or interview. Doing so will ensure that you feel more positive and self-assured. You will also be prepared for questions, even those tough ones!

2) You are the expert

You’ve been selected to discuss a particular issue for a reason – you are seen as an authority in the field and are appreciated for your expertise. Not only does it mean that people will come to listen to you and soak up all the knowledge that you have, but also that you’re likely to be the most well-informed and experienced person in the room. This means that you are in control!

3) Remember to maintain a positive frame of mind

Before you begin your interview, briefing or presentation, dismiss all negative thoughts and images from your mind and instead concentrate on the positives. Think back to your greatest achievements, the talks that you successfully delivered and the praise that you received. Remember how good you felt and visualise the audience’s nodding heads, smiling faces and clapping hands. Tell yourself that you will deliver the best presentation of your life: you know and believe that you can. Self-talk, however difficult, is a very effective and reliable method. And the consequences of a negative mindset can be disastrous.

4) Relax

Nervousness makes us physically tense: our neck stiffens, hands start shaking and our voice becomes constricted, sounding high-pitched or strained. To help this, roll your shoulders and then raise and lower them to relax your muscles.  Gently roll your head to ease the tension in your neck.  Slow down your breathing and relax.  Warm up your facial muscles by opening your eyes wide, and moving your mouth and lips. Releasing the tension in your body will calm you down and boost your confidence when talking.

5) Warm up your voice

Just like the body’s muscles, the voice works better when it has warmed up. Make sure you loosen your vocal cords before you start any presentation. To do this, use any excuse to talk: hum, sing or even talk to the wall to ensure that your voice is ready to go. It’s helpful to avoid drinking coffee before or during a presentation as it’s likely to dry out the mouth. Regular sips of water, on the other hand, can keep the mouth and throat lubricated.

6) Take the first step with confidence

Having followed all the tips discussed above you are ready to go. Remember to fill your mind with positive thoughts, stand up, make sure the room is quiet, pause, look at the audience, and begin.  Make your opening statement engaging and impactful and say it like you mean it.  A successful beginning will spearhead the rest of the presentation and will give you that extra bit of confidence.

Remember not to banish nerves completely. Nerves serve a purpose; they show that you care, and raise your adrenaline, giving you that extra boost. Many world famous actors still suffer from nerves, but it doesn’t prevent them from delivering brilliant performances.

Follow the guidelines listed above and invest in some communication skills training: you may not win an Oscar, but you can deliver a performance of which you can be justifiably proud.

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

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