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Thursday, May 6, 2010

CRITICAL MASS OF CRISES

If you thought Toyota and Tiger were the crises for this year, they were only the appetizers for the menu that is May 2010. There are so many going on right now that most can't even get to the front page of the traditional newspapers. So at CommCore, we're trying to keep track of the major ones and what they represent. Some are new and breaking; some older and festering. Some of the newer ones are overshadowing older ones, presumably to the relief of the affected organizations. All require careful monitoring of brand and reputation and the steps the organizations are taking to manage them.

TIMES SQUARE TERROR ATTEMPT: Top news at the moment. The Department of Homeland Security and New York City Police dodged a bullet when the device was detected by a street vendor and the truck bomb failed to detonate. DHS and the Justice Department dodged another bullet when the suspect now in custody was arrested trying after the Emirates plane doors had closed but had not yet taken off for Dubai.

The long term crises to watch:
  • For Homeland Security, there are two: explaining how the suspect - a recently naturalized American citizen of Arab origin recently returned from Pakistan - was undetected and able to buy explosives, and how to reassure the public that good luck won’t run out the next time. And Homeland Security Secretary Janet Napolitano's consideration for a seat on the Supreme Court may have been derailed because she must focus on this case (See AOL News: http://bit.ly/bUqUCy).
  • For Justice, making the case.
  • For Emirates. Did the "Do Not Fly" Notice that had been issued by US officials get to the carrier in time to have prevented the suspect from boarding the plane. If they didn't have "timely notice" the airline name in the stories should fade quickly. If they had received notice and still let the suspect board the plane, then they will be subject to further limelight questioning.
BP OIL SPILL: This one has legs. Overall, from the communications perspective, BP's "war room" has responded quickly, effectively and visibly. They have been consistent in messaging. More than one spokesperson likened the effort to cap the massive leak to a surgeon trying to do open heart surgery 5,000 feet underwater. The message was clear, but it doesn't change the facts. Once the spill began to coat birds and other wildlife, the spill and its PR impact moved beyond containment. Sure they are doing a better job than Exxon did during Valdez, but that's a low bar. Will this impact other companies, all of off-shore drilling and long term customer loyalty?

GOLDMAN SACHS: A long-term reputation management issue that has moved from front page of the entire paper to the front page of the business section. Clearly the company is standing firm and defending its action. Many firms have done that before and ended up settling charges to avoid costly litigation. Goldman is not alone in the financial crisis, but has become the poster child. Given the riches to be earned from a Wall St. career for those that make it, no amount of bad PR will stop ambitious financiers from job seeking. But the brand damage could cause pension funds and other investors from doing business with Goldman while it's "radioactive."

UNIVERSITY OF VIRGINIA LACROSSE PLAYER DEATH: At the very best, it has not so far been as damaging as the "Stripper-Gate" alleged rape case at Duke University in 2006. The questions to watch is whether this was an isolated, unfortunate incident or did the University of Virginia miss signals about a student/athlete with run-ins with the law who might have received counseling.

AVON PRODUCTS: This one has slipped off the news pages because of other headline-grabbing crises. In some ways, this crisis could be the most damaging to a company and its reputation.
The company has revealed that for past two years it had been investigating tips about payoffs to foreign government officials, and announcing a revamp of its China operations. If proven to be true, or if the perception of truth creeps into its business dealings, this crisis will have long term consequences. CEO Andrea Jung has been a visible and credible leader and spokesperson; the company has suspended the president, top financial officer and government affairs executive of the company's China unit. Important note: the SEC and the Department of Justice have given Avon time to complete its internal probe. This is one that many companies will monitor to see how Avon fares and how companies expanded into China and other markets will need to watch their business practices.

What are your thoughts on lessons learned from all these crises breaking at the same time?

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