Always good practice to learn from crises or disasters. If they have to happen and tragedy occurs, at least we can try to apply lessons from them going forward. Crises, disasters or issues are sure to come to companies or organizations at one time or another. No one is immune — every company faces their 15 minutes of shame, not just their 15 minutes of fame.
The derailment of Metro-North Railroad in the Bronx one week ago today that killed four people and injured many is rightfully capturing a lot of attention on how to make trains safer.
I was reading this article about the derailment on my subway trip home Friday night and at its close, I came across this important best practice. “The railroad administration instructed the authority to adopt a confidential system to report ‘close call’ incidents.” Many companies could do a better job of understanding their close calls. Close calls are similar to “near misses” which are defined this way according to the National Safety Council:
A Near Miss is an unplanned event that did not result in injury, illness, or damage – but had the potential to do so. Only a fortunate break in the chain of events prevented an injury, fatality or damage; in other words, a miss that was nonetheless very near.
A faulty process or management system invariably is the root cause for the increased risk that leads to the near miss and should be the focus of improvement. Other familiar terms for these events are a “close call,” a “narrow escape,” or in the case of moving objects, “near collision” or a “near hit.”
If companies could include “close call” discussions on their internal monthly or quarterly calls, they’d be in far better shape to deal with disasters that do arise. Management could do better by discussing how they might handle near misses, how to make sure they do not happen, who else should be included in the discussion to prevent them and how to prepare should they actually happen. It could be an informal or formal hearing or process. A more formal best practice is sponsored by the American College of Physicians and the New York Chapter of the American College of Physicians — The Near Miss Registry. The online registry collects medical near misses before they actually occur with patients. The registry allows healthcare workers to voluntarily report medical “near miss” events” using a web based tool located at www.nearmiss.org and hosted by NYACP.
Unfortunately the tendency is to bury the near misses in the hopes that they do not reach top management. However, that’s exactly the point. If top management does not know how close a call they missed, they won’t be able to prevent them.
I think it is a good step that Metro-North is adopting this process.
Not a surprise. Today I read that maybe we need more CEOs like the new CEO of Citicorp who has a very low public profile. He is practically nameless according to the article. Barely noticed in the trendiest restaurant where banking moguls hang out for lunch. I probably could have predicted this. The headline reads, “Quiet Boss at Citigroup Setting Tone for Wall Street.” And as predictable, those CEOs who are in the news for good and bad reasons are being shunned for having a public profile when I am sure they’d prefer to under everyone’s radar screens too. The next time around we will be hearing that this low, quiet profile that Citigroup’s CEO now has is what got him into trouble when times get stickier. It seems like it is either too much or too little visibility and nowhere in between when it comes to CEO visibility and presence. Let’s see what the new year brings on this topic of neverending interest when it comes to CEOs. I think the common saying is, “Damned if you do, damned if you don’t”, which according to Wikipedia is described as having “two equally repulsive choices, neither of which results in a positive outcome.” I think that is exactly it — pros and cons and little in between to having any public profile for your company.
Worth taking a look at NYC mayor-elect Bill De Blasio’s transition web site. It is very transparent and user-friendly. You can apply for jobs, review who the transition team is, send an idea. volunteer, or read blog postings. It is a great idea that matches with what he promised in the run off. Nice fit. Transitions are important times to set the tone and style of the incoming individual or executive. The large photo on the home page with De Blasio reaching out to constitutents sends the right message that he aims to be a man of the people (I think he said “we all rise together”). How it turns out will be another story but for a start, it’s a good one. CEOs should consider this transition site as a good way to mark their first 100 days internally.
I wanted to read the chapter in Trust Inc. by Linda Locke on “Trust, Emotion and Corporate Reputation.” I bought the book because Barbara Brooks Kimmel has done such a terrific job building Trust Across America-Trust Around the World, an organization focused on the fundamental element of trust. Linda is the founder of Reputare Consulting which is a reputation management consulting firm. I know Linda from events at Reputation Institute and her work leading reputation management at MasterCard. She really knows the field, is a thought leader on reputation, has powerful insights, and I follow her regularly on Twitter (@reputationista)…love that handle.
In the chapter, Linda mentions that facts are often not enough. It is a good starting place to build trust but if that’s all a company has to provide in a crisis situation, it is not going to work today. She says: “To earn trust, a company must go beyond the requirements, beyond the simple facts of the situation, and demonstrate that it understands the concerns of the stakeholders.” Showing empathy, care and concern are necessary ingredients to rebuilding trust, protecting reputation for the long-term and beginning to repair the reputation tear. What caught my attention was her recommended breakdown of communications content when a company’s reputation is under the glare of spotlights:
- 50% of a company’s external communciations should express care and concern
- 25% should express the company’s commitment to fixing the situation (what are you going to do, when and how)
- 25% should focus on the facts (again, facts have to be there but it is not all there is).
These are very helpful proportions to use when explaining to companies what they need to do about the content of their risk communications. What fascinates me the most, however, is how companies today have to show their “softer side” when they are in the middle of a brewing crisis and be more vulnerable and empathic. This is a major change in how companies are expected to communicate when they have done wrong in the public’s view.
Linda provides some case studies in her chapter that truly intrigued me. She provides a social-pyschological framework to understanding the public’s emotions to losing trust in institutions. Here’s one to share. She gave an example of a financial services firm managing their reputation during the horrific and unprecedented financial recession of 2007-2008. The firm analysed what people were saying about how they felt during this period. As she describes it, the firm found that three emotions were most evident in the public discussions about the financial downslide that was causing a real sense of fear and loss of trust. They were: irreversibility (consumers fear that what was happening was irreversible and would be permanent); unfamiliarity (consumers having never experienced anything like this economic uncertainty before) and involuntariness (consumers had no control over what was happening to them and could not influence the outcome whatsoever). The consuming public was paralyzed by fear and what could companies do to assuage their loss of trust. For companies faced with these raw emotions, Linda recommends explaining in everyday language (certainly not corporate speak) how the situation happened, how it is similar to a familiar experience they may have encountered in the past, the role of the responsible parties to fix the situation so it does not happen again and how the company will do whatever it takes to repair that broken bond of trust. And certainly empathisize with those affected and show you care if you want to keep your reputation from cratering.
Building trust is the bedrock of reputation. If your company is not trusted and credible, it is going to fail fast and I mean really fast.
The Arthur Page Society just issued a new report on The CEO View: The Impact of Communications on Corporate Character in a 24X7 Digital World. The 20 interviews with global CEOs reveals many insights on the evolving role of the CCO (corporate communications officer) in companies today. What is special about this report is that it provides a view from the very top, from the CEO himself or herself. In a section on what’s expected from CCOs in this brave new always-on world, one of the findings caught my interest because of the reputation angle. They refer to it as ”High-Resolution Measurement.” The report states:
Today, CEOs expect their CCO to deliver an accurate, data driven picture of their company’s reputation at a level of detail that is often very granular. Some CEOs report measuring as many as 30 different brand attributes as experienced by as many as 15 discrete stakeholder groups. While the levelof detail and timeliness demanded by CEOs vary, the new emphasis for 2013 is the demand for hard data.
It sounds to me like CEOs want it all because they now understand that the single employee loner or the most vocal customer detractor or the regulatory body in another country or the evolving patient group launching a new website or the members of a NGO group can easily harm the company’s reputation within seconds and make the damage last days, weeks or months. Instead of just worrying about how reputation is faring among a set portfolio of key stakeholders, CEOs now expect CCOs to be on top of those peripheral stakeholders that can rise up and reap havoc. Hard data has the potential to answer many of these questions. I always say that managing reputation by anecdote does not tell the whole story (or even some of it).
There are many more insights worth discovering in the report. Give it a read to understand how the role of the CCO is changing and how vital that position is to the company, the CEO and to the reputation universe.
Love this quote from the Oxford Metrica/Aon 2012 Reputation Review and it applies not only to corporate communications but to CEO communications. A good CEO narrative can make all the difference to reputation:
“Communications that strengthen reputation are far more valuable than is recognised. We can make companies worth hundreds of millions more simply by making them better understood.”
When I first heard this story last weekend about AOL CEO Tim Armstrong publically firing the Patch creative director on a conference call, I was not sure what to think. It was quite the uncivil thing to do. At Weber Shandwick, we had just released our annual survey on Civility in America and I was troubled by the finding that one in four Americans (26%) had quit their jobs because of an uncivil workplace. This figure was higher than it was in 2010 (20%). When I heard that the public firing before 1,000 people was recorded and leaked to a web site, making its way across the world wide web, I thought that too was uncivil. All in all, not good news for Armstrong’s reputation.
I was wondering how this would all shake out or when an apology or statement would come from above and here it is. Unfortunately, the reputation of the workplace is highly impacted by the actions of the CEO and especially by how a CEO behaves during tough times which Patch is experiencing as they prepare for layoffs at the end of this week. His taking responsibility, regardless of the situation, and acknowledging his accountability was the right thing to do to bring some equilibrium back to the situation. You cannot explain away incivilty when it comes to CEO leadership because most people will regard it as just an excuse. Therefore, Armstrong’s apology does not dwell too much on why he fired Lenz the way he did. Since apologies are increasingly common among CEOs and leaders, I thought I would post below in case anyone is looking for an example in the weeks and months to come.
I am writing you to acknowledge the mistake I made last Friday during the Patch all-hands meeting when I publicly fired Abel Lenz. It was an emotional response at the start of a difficult discussion dealing with many people’s careers and livelihoods. I am the CEO and leader of the organization, and I take that responsibility seriously. We talk a lot about accountability and I am accountable for the way I handled the situation, and at a human level it was unfair to Abel. I’ve communicated to him directly and apologized for the way the matter was handled at the meeting.
My action was driven by the desire to openly communicate with over a thousand Patch employees across the U.S. The meeting on Friday was the second all-hands we had run that week and people came to Friday’s meeting knowing we would be openly discussing some of the potential changes needed at Patch. As you know, I am a firm believer in open meetings, open Q&A, and this level of transparency requires trust across AOL. Internal meetings of a confidential nature should not be filmed or recorded so that our employees can feel free to discuss all topics openly. Abel had been told previously not to record a confidential meeting, and he repeated that behavior on Friday, which drove my actions.
We have been through many difficult situations in turning around AOL and I have done my best to make the best decisions in the long-term interest of the employees and the company. On Friday I acted too quickly and I learned a tremendous lesson and I wanted you to hear that directly from me.
We have tough decisions and work to do on Patch, but we’re doing them thoughtfully and as openly as we can. At AOL, we had strong earnings last week and we’re adding one of the best companies in the world to the team. AOL is in a great position, and we’ll keep moving forward.
One of the trends I talk about when it comes to reputation is how politics is no longer a strange bedfellow to companies. Companies and their leaders now find themselves taking sides on climate change, same-sex marriage, immigration, gun control and a host of other issues. Company reputation is far more politicized that it used to be. Years ago when I first got into public relations, it was made very clear to me that companies did not air their political leanings or take sides on political issues. Today, political issues are now the business of business.
That is why I was particularly interested in an article about a Starbucks in Newton Connecticut. I copied and pasted the newspaper photograph into a powerpoint slide for safekeeping. I’ll want to be able to remind myself when I need a good example of how politicized reputation has become and how tricky it is to walk a fine line.
Nothing is ever simple these days when companies live in glass houses. There’s always two sides to every coin. Here’s a snapshot of what happened. Two days ago, gunowners declared Friday “Starbucks Appreciation Day.” Unfortunately, this nationwide Appreciation Day was also being celebrated at a Starbucks in Newton, Connecticut, home to the mass killing of some two dozen children and teachers. Why appreciation day for Starbucks? Reason is that Starbucks has publically supported the Second Amendment in states where it is allowed and which grants people the right to keep and bear arms whether those guns are carried in public spaces such as the ubiquitous coffee chain or not. However, because of the glaring sensitivities surrounding the hideous Sandy Hook killings, Starbucks found themselves at ground zero for pro- and anti-gun supporters even though gun carrying is allowed in Connecticut.
What did they do? At the Newton Starbucks, they closed the store five hours early and put up this sign:
At Starbucks we are proud that our stores serve as gathering places for thousands of communities across the country and we appreciate that our customers share diverse points of view on issues that matter to them. We also believe in being sensitive to each community we serve.
Today, advocacy groups from different sides of the open carry debate announced plans to visit our Newtown, Connecticut store to bring attention to their points of view. We recognize that there is significant and genuine passion surrounding this topic, however out of respect for Newtown and everything the community has been through we decided to close our store early before the event started. Starbucks did not endorse or sponsor the event. We continue to encourage customers and advocacy groups from all sides of the debate to contact their elected officials, who make the open carry laws that our company follows. Our long-standing approach to this topic has been to comply with local laws and statutes in the communities we serve.
Thank you for your understanding and respect for the Newtown community.
executive vice president, U.S. Retail
For Starbucks, there’s no winning on this issue but I respect the fact that they behaved according to their conscience and in line with their corporate character . I also was impressed that the EVP of US Retail signed his name to the letter. There was no darting the issues. However, I think it is important to recognize that company reputations will find themselves regularly tangling with political issues and they need to shape their reputations with that in mind.
CEO as empath-i-zer. Interesting notion. In a poll among New York voters about the upcoming mayoral race, 61% said that they want a candidate who understands the needs and problems of regular New Yorkers. That one factor was most critical to them despite the fact that they give the Mayor high marks for what he has done. Clearly, New Yorkers are reacting to three terms of Mayor Bloomberg but I think it reflects the ever widening gap between those who are in charge and those who are not (most everyone).
I think that we are witnessing the emergence of a new leadership quality that we demand of CEOs as well — heart. I think I can fairly say that most employees probably want a CEO who understands what it is like to walk in their shoes, understands what they do and understands that “fairness” is at the core of how we view business leaders today. In contrast to the imperial CEO of years ago, employees are looking for CEOs who are empathetic. Of course, employees want a solid leader who can see around corners, drive growth, deliver profitability, communicate what the company stands for and build a culture worth staying loyal to. But the softer side of things is slowly encroaching on the attributes we want from our leaders. Empathy and generosity are rising to the top from what I can tell.
New Yorkers are wise to ask for more heart from their civic leaders. You’d think they’ve known this all along. The New York logo and song, ”I Love New York,” has been around since the 1970s.
Plane rides can be good for reading and that is what I did this week on my way back from Seattle. I have always been fascinated by reputational crises and how leaders manage through them strategically and creatively. In the most Harvard Business Review, I found a wonderfully insightful review of Lessons Learned from the Chilean Mine Rescue. The guidance is invaluable and I highly recommend the article in its entirety. As you may recall along with the other one billion people tuning in, in the summer of 2010, the San Jose copper and gold mine in Chile’s Atacama Desert fell in, thereby trapping 33 miners underground for 69 days .
The three Harvard-affiliated authors traveled to Chile after the miners were rescued and developed two case studies on the mining incident. They identified three key iterative tasks that need to happen in order for leaders to manage the conflicting demands placed upon them when crises arise and chaos reigns. And this was a disaster of extreme proportions. One of the clear lessons learned was that crisis-engaged leaders have to carefully balance between being decisive and directive and on the other hand, giving the crisis team the opportunity to ask questions, disagree, experiment with solutions and be creative. The three tasks, according to authors’ Faaiza Rashid, Amy Edmondson and Herman Leonard, are Envision, Enroll and Engage. Here are brief summaries of each one.
- Envision — Leaders have to be realistic and clear-eyed and yet also provide hope and possibility.
- Enroll — Leaders must enroll experts and highly skilled advisors but set boundaries so they do not lose sight of the end goal. They must remind people of what’s at stake and make sense of it all for the team. Interestingly, the article points out that leaders also have to keep the people who are not helpful or whose expertise is not needed right then and there away from the crisis scene or war room. The crisis team needs to not be distracted from their work.
- Engage — This is the stage where execution is critical and the work has to get done. They have to be disciplined and yet open to innovation at the same time. They have to invite learning while the work comes to its conclusion.
In their concluding paragraph, the authors sum it all up….”Leaders must develop a healthy tolerance for failure and ambiguity….” The ambiguity and balance required of leaders in crisis could not have been more apparent than during this crisis. Everyone’s reputation was on the line as well as the lives of the Los 33.