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

If you’re a regular reader of this blog and already have robust crisis management plans in place, you are excused from reading this post!  Whilst it would be nice to assume that most organisations are in this happy position, it would also be naïve.  So what should an organisation that has developed a positive reputation consider as its first steps in reputation protection?

A strong corporate reputation is acknowledged as a valuable business asset, one which takes years to build, and requires constant nurturing to maintain.  Recent crises suffered by Costa Cruises, Blackberry, Goldman Sachs and FedEx show that a major incident or issue puts that reputation on the line.  The outcome can be devastating; but it doesn’t have to be.

Rigorous preparation is the most important factor in protecting corporate reputation in the event of a crisis.  For example, when FedEx responded so well to YouTube footage of a delivery man throwing a PC into a customer’s front yard, it was surely due at least in part to thorough planning.

More than that, research shows that thorough preparation actually reduces the likelihood of a major crisis happening in the first place.  This is because the preparation phase highlights flaws and vulnerabilities that can be addressed, and creates a heightened sense of crisis awareness and vigilance that acts as an early warning system to snuff out potential crises before they escalate and emerge.  So engaging in crisis preparation and prevention is one of the best investments you can make.

Here are some of your first steps to protect your corporate reputation:

1. Identify and prioritise reputational risks – involve colleagues from different functions in this process to ensure you cover as many threats as possible.  Encourage people to think worst case scenario rather than adopting an attitude of “it could never happen here”.  This is especially important in the context of the transparency created by social media as experienced, for example, by LA Fitness.  Knowing where the threat can come from and its possible impact helps you to prevent a possible crisis, or at least develop necessary communication contingencies.

2. Identify your stakeholders – it sounds obvious, but so many organisations still flounder when they need to communicate with the media, customers, suppliers, regulators, local politicians and even employees in the heat of a crisis. Make sure you have up to date contact details always to hand and make someone in your organisation responsible for updating them on a quarterly basis.

3. Establish communication channels to reach your stakeholders in a crisis – identify the likely ways in which you will reach stakeholders in a crisis whether an online crisis hub, teleconference or press briefing.  Work out the process and resources required to activate these channels in a crisis, and make sure that they are available out of hours.  Never rely on the availability of a single expert or a technical guru: always have deputies in place. Nowadays online channels should be an essential part of your armoury: create an online crisis communication hub which will contain all your key information, have Twitter accounts set up and ready to go, and make sure you are able to create and upload a YouTube video within hours, even at the dead of night.

4. Form a crisis communication team – identify and brief the people who will likely form your crisis communication team.  Make sure they have the relevant expertise and personal qualities necessary to communicate with stakeholders in a crisis.  As well as technical experts – for example in social media, internal communications and the media – make sure that you have administrative and technical support available.

5. Identify and equip a crisis communication team room – a dedicated crisis communication team room containing resources such as direct phone lines, Wi-Fi, televisions, telephone contact lists, whiteboards, flipcharts and so on will form your nerve centre in the event of a crisis.  Identify where you will locate this room ahead of the crisis and ensure that it is always stocked with the necessary resources.  An adjacent quiet room, in which statements and other documents can be prepared, is also useful.  Make sure that both rooms are out of the range of camera lenses!

6. Prepare a crisis manual – a set of clear processes and materials (for example, template holding statements) is an invaluable aid to effective decision-making in a crisis. But make sure it is not so large and detailed that it is unwieldy in a real incident.

7. Train the crisis team – whilst a crisis manual is valuable, a well-trained crisis communication team is invaluable.  Make sure that they are properly briefed on crisis procedures through desktop exercises, invest in crisis communication training via realistic simulations, and put spokespeople through professional media training to ensure they can get their message through when the heat is on.  Nowadays, it also makes sense to run regular social media simulations to get teams match-fit for the relentless pace of an online crisis.

8. Keep your crisis planning alive – a common trap is to treat crisis communication planning as a one off event.  Avoid this pitfall by re-visiting the manual regularly, planning a schedule of training courses or team events, and building relationships with your internal and external stakeholders before a crisis occurs.

Preparation is essential if organisations want to protect their corporate reputation in the event of a crisis. Sound judgement and skilful leadership will also be required, but having strong foundations on which to apply these skills provides a significant headstart.

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

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

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

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