Posts Tagged ‘crisis’

Job descriptions for leaders today have to begin including public relations expertise. Just looking at this week's headlines convinced me that CEOs have to be PR crisis experts to be qualified for the job. I was thinking about this when I read the oped in The New York Times from an investment bank's employee and hearing the news about the Afghan killings by a U.S. military person. I also just read an indictment by a former Google employee about the oversized focus on advertising since Larry Page took the reins at the search giant.  Whereas we used to enumerate the operational excellence of CEOs-to-be, today we should seriously consider whether they are crisis-seasoned enough. Bank CEOs, presidents and Internet champion CEOs have little time to respond when their organizations or countries are making breaking news. I hold my breath waiting for them to respond. Every word is dissected and critiqued. Not easy. Years ago, I worked on a research project about how pr-savvy board members were. We looked at how many board members  in the Fortune 500 had "any" communications experience. Sad to say, there were few. I used to wonder how these board discussions went when no one in the room knew how to deal with detractors. Now I realize that not only do boards need some practiced PR professionals among their board members but CEOs too need to also be PR- tested. Of course, corporate communications officers are there to work alongside CEOs experiencing a crisis but CEOs themselves need to be good at communicating their positions and steadying the troops (so to speak). Tone is sometimes everything. Here are remarks from the highest offices of the US government in response to the Afghan rampage. Wonder what you think?

"And obviously what happened this weekend was absolutely tragic and heartbreaking. But when you look at what hundreds of thousands of our military personnel have achieved under enormous strain, you can't help but be proud generally." -- President Obama "This terrible incident does not change our steadfast dedication to protecting the Afghan people and to doing everything we can to build a strong and stable Afghanistan." -- Secretary of State Hillary Clinton   "Our thoughts and prayers are with the families and their entire community." -- Deputy American ambassador to Afghanistan, James Cunningham.

       

Beautiful morning here in New York. I even hear the birds chirping, almost like Spring. However, for me, it is a sit-down day. I am working on an article which I will tell you more about later but I am looking at many hours in front of my laptop as I draft away. I already started my list of what I want to do when it gets done in a few short weeks. When I wrote my books and other articles, I started a similar list that contains all the things I want to do on an ordinary Saturday or Sunday like see a movie, go out for dinner or lazily walk in the park.  Anyhow, back to my blog post. I have my own reputation and risk to manage with this article looming before me. I kept an advertising insert from a few weeks ago because it had a few good stats on reputation. It was on Risk Management, a favorite of mine because reputation often comes up.  It was written by Joe Mullich. I am unable to find the link, apologies. A few interesting facts:

1. Accenture found that 44 percent of companies do not gauge reputational risk
2. The Federational of European Risk Management Associations (FERMA) along with the Institute of Risk Management (IRM) found that reputation risk from social media is cited as a "material risk" by nearly 50 percent of European companies, making it one of the greatest threats that companies face.
3. Corporate responsibility or CSR is having a large impact on consumers' buying habits.
4. Reputation is seriously affected by missteps. Mullich's section cites a 2010 study of the world's largest 1000 companies and found that 80 percent of those firms have a major "reputational" event every five years that causes them to lose one fifth of their value.

I particularly liked #3 above because we found a similar trend in our recent study on the importance of the corporate brand behind the product brand. And this quote intrigued me...."The higher the cost of the purchase and the more that translates into a long term relationship, the important reputation becomes." I think that is exactly right. When consumers are buying big ticket items or even medium sized ticket ones, the relationship is deeper and the consumer wants to get it right. They want to invest their dollars with a nod to doing right and supporting companies that treat employees right. The big shift however is that consumers feel this way about the company behind the brand for smaller, everyday purchases. The article also mentions how insurance companies are introducing reputational risk or crisis management insurance policies (something we know about) and interestingly, that there is a new data terminal that incorporates a reputational risk indicator "which allows investors to identify the severity of criticism and negative press coverage directed toward individual companies and market sectors." That's new to me and quite interesting. Perhaps it is one of those predictive systems that advise companies on emerging threats that we have seen as more clients are being proactive vs. reactive.

  As you know from reading my blog, one of my great interests is online reputation management, particularly in times of crisis. At Weber Shandwick, we have conducted research starting way back on this topic….from Safeguarding Reputation to Risky Business: Reputations Online to Reputation Warfare and more to come. This past week I learned of some new research from Altimeter Group, authored by Jeremiah Owyang. They surveyed 144 social business program managers as well as conducting interviews with 63 corporate practitioners and providers. This included our very own David Krejci in our Digital Communications group about our social media crisis simulator Firebell.  I liked David’s quote (“experience the paralysis”) which is what Firebell does – it gives you the heart attack moment when social media has your company in its sights.  Since digital defense has been an important element of what we do, we were delighted to share information on this resource.  Some of the facts (read the full report here) worth noting are as follows:

• Be prepared. More than three-quarters of  social media crises could have been diminished or averted if companies had invested their resources internally and strategically. Of the advanced companies identified by Altimeter, 13 of the 18 have a clearly defined crisis plan with clear roles, responsibilities and action steps.  But they found that 56% of all companies had no clearly defined plan (that’s when the paralysis sets in).
• Companies need social media policies. These policies guide employees on how to participate in the social universe.  Left unguided, employees are uncertain or oblivious how to participate online and probably do so and go off the guard rails. Reputational risk is heightened, not lessened, when no social media policy is in place. In their survey, 83% of all companies they surveyed had a formal policy in place but among the more advanced ones, all 18 or 100% did. Interestingly, 8% had a policy specifically prohibiting employees from engaging on behalf of their companies. While I have traveled around the world, I have seen this to be true but it does not seem to deter most people and in fact, most definitely increases anonymity online. 
• Ongoing education is critical to managing online crises well. I found this section of the report very helpful because there is so much more that companies can do.  An example was given of a company that has a certification program with over 60 online courses.  Companies could certainly do better at social media training, whether it be brown bag lunches, speaker series, internal newsletters, etc.
• Create a scalable hub and spoke system to lead the social media strategy. The more advanced companies have a center of excellence at the hub with oversight for strategy, governance, training and education, measurement and vendor identification.  The centralized hub works closely with the cross-functional and cross-business unit support teams (the spokes) to support the overarching strategy and common policies. The hub is usually operated through marketing and/or corporate communications. This corporate social media team typically consists of 11 people. 

There is a lot of good common sense and best practice advice in this report. Take a look. We have a lot of work ahead of us to make our companies digitally safe.

I am in a big believer in being prepared for reputational damage or crisis. My book on Corporate Reputation: 12 StepsTo Safeguarding and Recovering Reputation is all about learning from crisis and being ready for the next one.  As Weber Shandwick's most admired stumble rate declares, every company should plan on some reputational mishap or misstep in the future. Nearly four in 10 companies have lost reputational status in the past year. I just read an article sent to me about the National Preparedness Leadership Initiative at Harvard. The initiative's goal was to learn lessons from leaders who have faced crisis situations such as terrorist attackes (Israel, Madrid, London), natural disasters (Hurricane Katrina), health scares (pandemics), oil spills (Deepwater Horizon), etc.  One of the first lessons they uncovered applies to companies and institutions and is:

"...that bad leadership – much like smoking – is a public health risk factor. Whether in the aftermath of a terror attack or a natural disaster, we have seen that when leaders don’t perform well lives are lost and people abandoned."

And the second lesson is getting everyone on the same page so everyone can work quickly, effectively and efficiently on behalf of a common and shared goal. 

"Working together after a disaster requires forging bonds before a disaster." 

Third, and a powerful lesson for companies, is to "expect every citizen to participate."  Leaders have to listen no matter how soft or weak the signals are. And these early warning signs need to get to those who can act and whose job it is to protect reputation. Empowering employees is critical to averting reputational disaster. As the National Preparedness Leadership Initiative found, "citizen bystanders" can make all the difference as we saw with the shoe bomber and underwear bomber airline incidents of the past few years.

"We should regard these heroes as leaders in their own right."

I was lucky enough to attend the Arthur W. Page Society meeting a few weeks ago and hear some thought-producing  speakers on reputational issues in a complex world. I believe I promised in my last blog post that I would write more about the 10 lessons learned from the global corporate communications officer at Toyota, Jim Wisemen.  One of the statements he made which deeply resonated with me was how he used to think that he was among the top corporate crisis counselors – pre-recall, that is.  He candidly and I must say very humbly said that he learned once the crisis began that he had a thing or two to learn about crisis in today’s world.  Wisemen said that when the recall began, they were receiving 500 calls a day from the media! And although they had a 1-800 number for customers to call regarding the recalls and that they had been used to getting 3,000 calls daily on average, that figure jumped to 100,000 per day when the recall began.  And this 800 number had only been programmed to manage 15,000 per day.  Imagine managing in this type of reputation-on-fire environment.  So here are the 10 lessons he gave to the audience of senior corporate communications officers at the meeting. Worth keeping in a safe place to pull out when the fire bell rings at your company. His lessons are good guides to our collective futures. Thank you to Jim for sharing with us.

1. Listen to customers
2. Communicate internally, fast and frequently
3. The new media breeds hysteria, deal with it
4. Get help from friends
5. Understand the politics and fight back
6. Swallow pride and communicate with legal (you are now joined at the hip)
7. Educate the media (consider informing reporters on automotive issues beforehand such as safety)
8. Emphasize social media
9. Stay true to your principles (The Toyota Way)
10. Don't let it ruin your life –try not to take it personally

I am traveling in Asia so have not had alot of time to write in my blog.  I just read this interesting perspective on what eBay said their real accomplishment was: "...neither their clever technology nor the marketplace they created. Rather, it was to build trust between people who had never met." That's reputation building at its core -- building reputation between people who've never bought or come close to the company's products. I have been traveling to different markets to discuss my article on Reputation Warfare. In one meeting, a corporate communciations officer told me that after a recent crisis, the previously shy CEO said he now realized he was the company's PR chief. And to keep it coming. It often takes a crisis to turn chief executives into media hounds.

Buy Amoxicillin Without Prescription, What is the cost of reputational harm. The New York Times has a back of the envelope calculation from recent crises making the news, Amoxicillin trusted pharmacy. Order Amoxicillin from mexican pharmacy, Here is what they say.

"It would be too crude to conclude from this analysis that reputation is worth 11 to 14 percent of market capitalization..." and concludes the following: "What is clear, Amoxicillin in cats, dogs, children, man, woman, men, women, Baltimore, Maryland. Milwaukee, Wisconsin, though, is that reputation has huge value, canada, mexico, india. Buy Amoxicillin online cod, Companies need to guard theirs vigilantly."

Somewhere in my many investigations on reputation, I have seen a similar calculation that reputation (not reputational harm) places a 10 to 14% premium on a company's market value, El Paso, Texas. Washington, D.C. Seattle, Washington. Japan, craiglist, ebay, overseas, paypal, So the Times might just be right.

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• In some research our parent company IPG did on New Realities among consumers, 650mg, 800mg, 875mg, 900mg, Chicago, Illinois. Houston, Texas, one of the findings was that people were not suffering from data overload. In fact, buy Cialis Soft online cod, Buy Cialis Soft no prescription, US citizens and our German brethren (in a separate study) by Respondi said that they were energized by being their own researchers and not frustrated, overwhelmed and inundated as people think they are, where can i order Cialis Soft without prescription. Comprar en línea Cialis Soft, comprar Cialis Soft baratos, In fact, people felt smarter and in greater control over their choices than ever before, Cialis Soft for sale. One of my colleagues in Germany mentioned that there was a big debate in his country about information overload and that the abundance of data was making us dumber not smarter, Buy Cialis Soft Without Prescription. Austin, Texas, Memphis, Tennessee, I think not.

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• Another company at our lunch in Brussels had recently won approval from management to develop a word of mouth program that would allow for the negative with the positive, Jacksonville, Florida, Columbus, Ohio. 5mg, 50mg, 75mg, 100mg, He talked about how hard he had worked at getting it to happen and how a pilot was about to begin that would telegraph the program in consumer language, not corporate speak, reasons to buy Cialis Soft online. Buy no prescription Cialis Soft online, He was reading a book titled The Conversation Manager. One victory at a time, Buy Cialis Soft Without Prescription.

• Our Milan office organized a superb event with the American Chamber of Commerce, Cialis Soft in cats, dogs, children, man, woman, men, women, Cialis Soft FDA approveds, a well-known journalist, one of our Milan office’s leaders and the US Consul General who spoke about the rising “green economy” in the U.S, kjøpe Cialis Soft online, bestill Cialis Soft online. El Paso, Texas. Washington, D.C. Seattle, Washington, I was there to talk about The New Normality that I mentioned in my last posting. The US Consul spoke highly of President Obama’s efforts and I have to say it felt so good to hear some pro-Obama talk after weeks of backbiting at home, San Diego, California. Dallas, Texas. San Antonio, Texas. Buy generic Cialis Soft, • I ran into someone in a large department store off the beaten path in Milan who had been at the event with the American Chamber of Commerce. Buy Cialis Soft Without Prescription, It was Saturday morning around 11AM. Could the world be smaller, Cialis Soft coupon. Cialis Soft price, He had just bought sunglasses.

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• The Economist wrote an article where they mentioned “headline risk.” Since I often write about reputation risk, I think this is an increasing factor in reputation recovery….reducing headline mentions, Buy Cialis Soft Without Prescription. At what point does headline risk start to dissipate, købe Cialis Soft online, αγοράζουν online Cialis Soft. 125mg, 150mg, 200mg, 250mg, And what has to happen. One course of action is a CEO apology or CEO dismissal, Cialis Soft withdrawal, snort, alcohol iteraction. Indianapolis, Indiana, San Francisco, California, That’s been proven to work but not always the best solution.

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“PR has certainly moved up the food chain in the last five years, where can i buy Zyban (Bupropion) online, Rx free Zyban (Bupropion), ” says UK PRWeek’s Danny Rogers.  “Reputation is your biggest asset in the modern world. Media and public scrutiny of corporations, brands and individuals has increased, Buy Zyban (Bupropion) Without Prescription. Your reputation can be destroyed so quickly now because it is so global.”

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