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

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

A series of YouTube videos by an American Airlines employee have added to the issues management challenges of a company already facing an uncertain business future.

The humorous videos by a flight attendant parody the firm’s management and reveal the content of an internal memo sent to staff.  A discussion is developing on ragan.com as to the appropriateness of American Airlines response to the issue and whether it has the right to “censor” its employees.

Crisis management is always more challenging when an issue is internally generated rather than caused by an external event.  To reduce the likelihood of such an incident and therefore minimise reputational harm, a strategy of prevention must be prioritised.  The critical first step in this is the introduction and internal communication of a social media policy.  Although many businesses already have such a policy in place, a significant minority do not.

Whilst a policy cannot entirely prevent an internally generated social media crisis, it does ensure that expectations are clear so that staff understand the ground rules for their use of social media.  Take a look at this site for examples of social media policies from some of the world’s biggest organisations.   American Airlines may well be taking an urgent look at it right now.

Jonathan Hemus

www.insigniacomms.com

The first few weeks of 2012 have seen a succession of businesses in crisis management mode as they fought to protect their reputations in the face of challenging events and issues.

Whilst the Costa Concordia disaster filled the news for weeks and required concerted crisis communication, RBS faced an issues management challenge over executive pay, LA Fitness grappled with a social media fuelled crisis and the issue of faulty breast implants tested the communication skills of clinicians, governments and scientists across Europe.  And these events are just the tip of the iceberg.

A crisis is by definition a critical even for an organisation, but research by Oxford Metrica shows that it is not the fact of suffering a crisis that damages a business – in reality no business can eliminate the possibility of a problem- rather, what really counts is how the organisation is seen to manage the crisis: take control quickly, respond professionally, and communicate well and the organisation is likely to prosper. Federal Express, for example, have been commended for the way in which it responded to a YouTube video which threatened reputational harm.

Conversely, dither, hide or appear to be uncaring, and tough – even terminal – challenges may lie ahead.

As a result, thorough crisis preparedness is essential so that the organisation can be off the starting blocks like an Olympic sprinter.  And – just like athletics – what used to be speedy enough to win a gold medal is now far from world class.  They used to say that the first 24 hours of a crisis were crucial.  The speed and spread of crises today – largely driven by the immediacy and reach of on-line media – makes a mockery of this golden rule.  Being prepared before the crisis breaks, and being able to respond almost instantaneously allows organisations to retain control over their destiny.  HSBC demonstrated the value of this preparation when its online banking and ATMs crashed late last year: it reacted quickly with a textbook crisis communication response.

An online world has not changed key principles of reputation protection: indeed, the old lessons of crisis preparedness still apply (but more so):

• Understand your areas of vulnerability
• Develop and implement crisis management plans and processes
• Rehearse the plan and enhance it
• Train your people, especially those required to act as a spokesperson in a crisis
• Monitor the landscape
• Engage in pro-active reputation management

But the power of social media to both create and destroy reputations presents a new and potentially scary dynamic.   And many organisations are still grappling with how to harness online media in the face of this potentially business-critical challenge.  It’s one of the reasons why Blackberry was so slow to respond with effective crisis communication to its network outage late last year.

Failing to prepare properly leaves an organisation frighteningly vulnerable in today’s world.  If a crisis is gestating online then the organisation must have the capability to also manage it online.  Sticking to traditional media has the potential for at least three negative results.  Firstly, you may fail to reach those people most affected and concerned by the crisis – the people talking about it online.  Secondly, you lose the opportunity to engage with the online community which has the power to spread positive messages about what the organisation is doing to deal with the situation.  And finally, you may further escalate the situation by communicating bad news to people who were previously unaware that there was a problem.

The key to success is a combination of traditional reputation management insights and expertise, and the application of the latest on-line reputation management tools to get the message through.

As the start point for online reputation management, companies should take the following five steps:

1. Develop crisis management “dark sites” or other online hubs to respond quickly, clearly and effectively to emerging issues and incidents
2. Ensure that it has identified and set up the infrastructure and resource to communicate via social media such as Twitter and Facebook
3. Implement online media monitoring to track what is being said about them in cyberspace
4. Develop the capability to quickly create content – latest information, briefing papers, podcasts, blogs – for online media
5. Build skills and confidence by running a realistic social media exercise

The internet has the power to spark and spread a crisis: but used effectively, digital tools have enormous potential to help organisations prevent and manage them too.  Having online resources in place beforehand leaves an organisation better placed to manage any crises that the rest of 2012 throws at us.

Jonathan Hemus

www.insigniacomms.com

When LA Fitness threatened to enforce its contract with a heavily pregnant woman who had fallen on hard times, it may have had the letter of the law on its side.  But once the story became public, it was found guilty in the court of public opinion.

LA Fitness is just the latest business to find out that protecting reputation means doing the right thing in the eyes of the outside world, not simply complying with regulations or the law.

Ten years ago, LA Fitness’s dispute with a customer over whether her gym contract could be enforced would have been a private customer service issue in which the company held the balance of power.  Today it requires crisis management skills, is conducted in public and public opinion has far greater influence.

This transparency needs to be understood by businesses and factored into their behaviour, decision-making and communication. The imperative to act in a way that matches the  expectations of external stakeholders is largely driven by the power of social media.  In the old days, customer complaints could be dealt with in private and media criticism dismissed as tomorrow’s fish and chip paper.  Today, because of Twitter, Tripadvisor, Google et al, customer service – and crisis management – has become a spectator sport.  Worse, the spectators actually influence the game.  Whether businesses like it or not, this is the reality.

This transparency has raised the bar in terms of ethical and acceptable corporate behaviour – it’s much harder to do bad things and simply get away with it (which, of course, is a good thing).  It also means that the need for thorough crisis  management planning is more pressing than ever: reputational risk assessment, social media monitoring, scenario planning and realistic social media simulations should all form part of this.  A slow or inappropriate response to a crisis will be punished with damage to reputation.

LA Fitness appeared to be forced into a u-turn, and  this never looks good.  Ultimately, the key for businesses is to control the crisis rather than let the crisis control them.  Being able to perceive a crisis from the outside in and acting quickly and appropriately when company behaviour clashes with public expectations is essential to preserve corporate reputation.

Jonathan Hemus

www.insigniacomms.com

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

Concerns and coverage about potentially faulty breast implants produced by French company Poly Implant Prothese (PIP) continue more than two weeks after the story first broke.  This is a long time for a crisis to be in the media spotlight and indicates that crisis communication has been sub-optimal at best.

Indeed, a statement from the Independent Healthcare Advisory Services, the trade body which represents private clinics, accuses the government of communicating in a way which leaves people “feeling more confused and anxious now than before”.  It’s another reminder that effective crisis communication is essential when people are concerned for their health.

Women have been bombarded with mixed messages, which only increase their worries. While the UK authorities assert that there is no need to remove implants, countries such as France, Venezuela, Germany and Czech Republic have suggested that women have their implants removed as precautionary measures. According to the Lancet Medical Journal, it is ‘quite literally incredible’ for UK health officials to expect women not to worry.

The communication problem has been further exacerbated by the many and varied media spokespeople who have appeared on our televisions and radios over the last few weeks.  Everyone from the Medicines and Healthcare products Regulatory Agency (MHRA) through to individual cosmetic surgeons, trade associations, agony aunts, celebrities, government and patients have had their say.

So what makes for an effective media spokesperson during a health scare? We investigated this subject a couple of years back when, together with the University of Wolverhampton, we conducted research into swine flu communication. We looked at a range of spokespeople and used focus groups to assess their effectiveness and the reasons for their success – or lack of it.

The research clearly showed that high profile spokespeople have enormous power to reassure and inform the public in the event of a health scare.  Equally, they have the ability to cause unnecessary confusion, distress and concern if they fail to communicate effectively.  They need to recognise that this position of power also brings with it responsibility

We also identified the personal ingredients which defined a successful spokesperson at the time of a health scare.  Expressed as an equation, they are:

CS + SA + PA + AA = Reassurance (where CS is Credible Spokesperson, SA is Serious Appearance, PA is Personable Approach and AA is Actionable Advice)

Equally, credible spokespeople – doctors, scientists, academics – who provide worrying insights without clear and actionable advice can cause significant public anxiety. Given the impact that this communication has on the public, there’s a strong case for saying that people who are unable to match up to this set of criteria should not be put in front of the media during a major health scare.

Media training can help to identify whether a spokesperson is up the job or not, but also requires the potential commentator to be honest with themselves about their capabilities – or have a colleague who’s sufficiently honest and courageous to tell them the truth.

Having the ability to communicate effectively with the media is important at all times, but when your communication skills can affect the decisions someone makes about their health, I’d suggest it’s essential.

Jonathan Hemus

www.insigniacomms.com

Premier Foods is not the first food manufacturer to undertake a product recall following a food poisoning scare, and it will not be the last.   But its recall of Loyd Grossman korma sauce carries the potential for greater damage and more crisis communication challenges than most other recalls for two reasons.

Firstly, the fact that the Loyd Grossman brand is based upon a well known personality adds to the company’s crisis management challenge.  Any product recall with a potential health impact has the power to attract media and public interest. Add to it a celebrity angle and media attention is likely to significantly increase.  Not only that, but the celeb in question will be seeking to protect their own brand image, and your crisis communication objectives may not necessarily align.  As a consequence,  planning for the potential downside of any celebrity association needs to be a part of any brand’s reputational risk assessment.

Secondly, Premier Brand’s own business health makes it vulnerable to a mis-handled crisis.  Organisations with a positive reputation and a strong business can emerge from a crisis with their reputation intact, assuming they mange the incident well.  Organisations which enter a crisis with pre-existing business problems, financial question marks or a less than glowing reputation, can be brought to their knees (and beyond) by a mis-handled crisis. Pan Am is a prime example: it was already a troubled business before Lockerbie but its mis-handling of that crisis was enough to seal its fate.

Premier Foods seems to be managing its crisis well: given the circumstances, it needs to.

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

Recent experience demonstrates that major incidents unfold under the unswerving gaze of 24 hour news media so it’s essential that businesses vulnerable to on-site incidents have planned their crisis communication to cope with the arrival of a media pack.

Here are five key questions to address ahead of a potential media invasion:

• Who will be your media spokesperson?
• Who is their deputy if they’re unavailable?
• Where will you conduct press conferences at key sites? (and what’s the alternative venue if your first choice is inaccessible?)
• Where will the media congregate as the crisis unfolds and how will you manage their presence?
• How will you brief employees on guidelines for inter-acting with the media and what will the guidance be?

Dealing with a major accident is hard enough.  Making sure that you have prepared beforehand for wall to wall media interest will allow you to focus all attention on the most important task, attending to the incident itself.

Jonathan Hemus

www.insigniacomms.com