Insignia Talks

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

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

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

The report into Heathrow’s crisis management response to pre-Chrismas snow has just been published.  It makes me weep. 

Organisations like BAA should not require a major crisis to introduce professional, thorough and up to date crisis management processes.  And if these were not in place for an organisation at the very hub of the UK’s infrastructure, then how many other businesses are operating without the  requisite crisis preparedness?

Key observations and recommendations in the report include:

The potential impact of bad weather was not fully anticipated - avoid this by conducting a thorough reputational risk assessment which considers the worst case rather than hopes for the best

There was a failure of communication within BAA and with the airlines – work out who your “partners” would be in a crisis and meet with them beforehand to agree how your crisis communication can be clear, consistent and aligned

Crisis management procedures were not clear and required simplification –  first off, ensure that crisis management procedures exist and then audit them for clarity and simplicity.  Brief them in and test them with desktop exercises and then simulations

Messages to passengers were confused and contradictory – make sure you develop communication channels and approval procedures beforehand.  Align messaging with those of your partners.

There was inadequate resource planning – crises demand extraordinary amounts of human resource.  Anticpate this and have contingencies in place to add additional people to your normal team.

There was insufficient testing and training of the crisis management processes and team – centuries of experience have shown that being taught a skill and then practising it leads to better performance.  Crisis communication is no different

BAA has committed £50 million to implement the recommendations contained in this report.  Its chief executive, Colin Matthews, called it “a pivotal moment for the airport and its reputation”.

But BAA doesn’t really need to read this report – its painful experience in December would have been catayst enough for a changed approach to crisis communication.

This report is much more relevant to all those organisations who have not suffered a crisis in the last couple of years.  So, here’s my heartfelt request: please read the BAA report; please act on it. 

There’ll be a number of businesses who fail to do so and we’ll be reading the reports outlining their crisis management learnings in a year’s time.  A copy and paste of the BAA version should probably do the trick.

Jonathan Hemus

www.insigniacomms.com

Here are five of the most common reasons I hear for not running a crisis simulation:

1) Money – we’d rather save the money required to commission a simulation, or spend it on something else

2) Time – it requires company time and resource to plan it effectively

3) Attention – it’s hard to secure management time and attention for an exercise

4) Wastage – it only delivers value if we have to manage a crisis for real, and we hope that never happens

5) We don’t need it – either we have a plan that we know will work, or we’re confident that we’ll cope in any case

And here are three reasons why the five excuses above are wrong:

1) Money, time and attention – a well planned, well-executed exercise that delivers real value in terms of protecting reputation does indeed require time, money and attention.  Much of the time and resource can be outsourced to a specialist crisis communication consultancy, but it will indeed require both financial investment and the time and attention of the business’s executives.  But the financial and time investment is modest when compared with the value of your reputation.  And it is insignificant when you compare it with the management time and cost demanded to rectify a mis-managed crisis.

2) Wastage – if you own a valuable car, you insure it.  If you have a nice house, you insure it.  Why should a valuable reputation be any different?  In any case, a crisis exercise delivers more than confidence that you could respond well in the event of a live incident.  It also identifies flaws and weaknesses that can be addressed in advance, making a crisis less likely to occur in the first place.  And that’s without even factoring in the benefits in terms of broader management skill building and teamwork.

3) We don’t need it – I have never run a simulation at the end of which executives questioned its value. Ever.  Each exercise has been enormously valuable in building the team’s confidence and proficiency in applying the crisis communication plan.  Many mistakes are made – but they are made in a safe environment and are not repeated during a real incident.  That’s why you run a simulation.

When a major crisis hits a business in a particular sector, I know that the phone will soon start ringing.  It’ll be competitors of the business in question, urgently wanting to re-evaluate their existing crisis communication plan (sometimes to write it for the first time), or run an exercise to test it. 

They’re the lucky ones: they’ve had a wake up call before their reputation has been destroyed.  Others fail to learn the lesson before it’s too late…

Jonathan Hemus

www.insigniacomms.com