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Thursday, August 26, 2010

THE BEST CRISIS: THE ONE YOU NEVER HEAR ABOUT

One of the best points in the recent NY Times article on BP, Toyota and Goldman Sachs http://nyti.ms/9KT2ck was the statement that organizations that handle a crisis well are rarely heard about.

The famous question about the tree falling in the forest applies. Did it fall if no one heard of it? Or was the fall gentle enough that it made so little news or web noise that it was quickly off the media's watch list?

There are a few key factors that often determine if a crisis is a non-media event:
· having a crisis plan
· testing the crisis plan
· management that reacts quickly and follows the plan when an event occurs
· a concern for the organization's reputation
· maintaining strong and transparent ongoing relations with media, employees, customers and stakeholders
· almost always, a bit of luck

We'll explore each of these factors in the next few blogs. Let's start with developing the PR Crisis Plan. The point is that most organizations have up to date evacuation and operational plans; many fewer have PR or Reputation related plans. Or if they have plans, they don't update them with the latest improvements, such as adjustments for social media or adjustments when an organization goes into higher risk activities.

Notice the one word the gets repeated - plan. There is no substitute for planning and drilling because speed and accuracy of response are crucial to containing a crisis as close to a non-event as possible. We rely upon our local fire departments to plan and drill, plan and drill and plan and drill. Then if the fire strikes your house or office complex, the trained and experienced first responders work quickly and professionally to keep the damage to a minimum.

What goes into the crisis plan? First figure out the team. The team should help decide what types of emergencies or internal crises can become PR or Reputations crises. Who should be on the team? At the very least, representatives of senior management, finance, PR, IR (if public), risk management, legal, HR, IT and SME's (subject matter experts).

Once you have the team, then you can decide what types of crises you need to plan for and the difference between an Emergency and a "show stopping" crisis. Emergencies occur every day and we're trained to respond. These are usually the "tree didn't even budge" events.

In every type of business or organization, there are the usual crisis suspects - from operational issues and emergencies to reputation issues - all of which could attract media attention. After the general list, then you need to apply the Mirror Principle: hold up a mirror to your organization and see what might impact your operations. For example, a firm with a low profile CEO and no international operations, will have some similar and some very different potential crisis issues from a like company with a high profile CEO and far flung global operations. The development of a crisis plan combines rigorous auditing of the what if's and the development of step-by-step processes for crisis response.

The plan must also have a basic list of what steps to take in a crisis - often incorporated into a decision tree. All the steps should be in a single document or in a secure on-line file. But most modern plans get reduced to one or two wallet sized laminated pages or PDA files, with links to the plan stored on a server. Contact numbers and emails are table stakes for those on the team and the commitment to monitoring events and rapid response. Literally after that, it's all in the details.

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Monday, August 23, 2010

NEW YORK TIMES ANALYSIS OF RECENT CORPORATE CRISES

A good analysis of BP, Toyota and Goldman Sachs on crisis appears in the New York Times, Sunday, August 22. http://nyti.ms/9KT2ck. Peter Goodman’s article makes several strong points:

  1. First, it's one of the better factual recounts of the events for each enterprise involved in the spill and the cleanup. BP et al are now buzz words, very few people actually know or remember what actually occurred.
  2. Goodman does a good job describing the tensions between legal departments and PR. Lawyers are primarily concerned with litigation and proofs in court, and with shareholder actions. The PR teams, while aware of these issues, face the need to communicate with regulators, shareholders (not with their lawyers), customers and consumers.
  3. He notes that for the lucky organizations that haven’t been in the public eye, start now and develop a crisis plan. This will save time and confusion during a crisis.
  4. In the middle of the really big crisis, he writes, no organization is really "winning" particularly when all facts are not in and the regular and social media has the events in hits 24/7 gun sights.
We would have added a few more items to make it a fuller article:

  1. Goodman barely mentions the role of social media and its impact on crisis planning and response. Perhaps he didn’t think it played much of a role in this year's biggest crises. Yet he should have found a couple of experts to talk about how social media is a game "impacter" in the current media landscape.
  2. Besides Goodman's recommendation to start planning for crisis, we also recommend that companies think through what we at CommCore call the RPM "Reputation Protection Model ©" through the lens of how the company, agency, organization or brand is viewed at-large.
  3. Goodman, like other reporters on crises, uses Tylenol as one of the comparisons to this year"s bumper crop. The point he misses is that in addition to making the right moves, Johnson & Johnson benefited in that they were never perceived by the public as the bad guy. In the cases of BP, Toyota, and Goldman Sachs, each of the companies did something to either start and/or make the crisis worse. J&J was essentially minding its business when the attackers placed poison in the bottle.
As we track crises, we have a perspective on the recent salmonella egg recall: http://www.commcoreconsulting.com/resources/observer.html

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Monday, August 2, 2010

Tony Speaks

Former BP CEO Tony Hayward gave his first interview last week in the UK. (http://tinyurl.com/32hnzud) While the article included comments from critics, he wasn't as immediately challenged as his prior appearance in front of the US Congress or the lying-in-wait law suit depositions. Hayward - who has actually been well received by employees and others back home in the UK -- clearly realized that he was the symbol of everything that went wrong in the Gulf. "…I understand that people find it easier to vilify an individual more than a company." Hayward did concede that he was wrong when he said, " I'd like my life back….BP can rebuild faster in America without Tony Hayward as its CEO."

Critics in the article were less moved Hayward's personal comments vs. the actual damage in the Gulf. "Mr. Hayward should be less concerned about his vindication, and more concerned about what BP will do to end the victimization of families and business in the Gulf," added Rep. Ed Markey (D-Mass).

In our experience, Hayward has a pretty good sense of what happened. It's much easier for media and regulators to either blame or give credit to an individual than a corporations or organization. Whether Hayward is right in his assertion that he was doing everything "right", we'll let history and the courts pass that judgment.

The other point is that all crises eventually hit their low point - when the bad news turns around. For BP, Hayward was continually getting vilified while there was still no firm date for when the oil leak was going to stop. Only in the last couple of weeks, with the success of the caps and eventual relief wells can BP begin reputation repair in earnest. According to some research, with the slowing of the spill and the replacement of Hayward, BP's public reputation has crawled back to slightly above Goldman Sachs.

The road back won't be a straight path of improvement in business and perception. There will be numerous ups and downs. The day of Hayward's interview, another report indicated that many BP gas station owners want BP to re-rebrand back to the Amoco name. Consider when ValuJet became AirTran after fatal plane crashes. http://tinyurl.com/2bg2t59

How do you think BP and Tony are doing? Do you care about Tony Hayward?

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