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"A company's willingness to tell the full truth depends on management's willingness to admit they've made a mistake. Some execs can do this, and some can't. By and large the public is willing to forgive you if you're honest and truly remorseful for the harm you (as the CEO of the company) have caused," said Polly Harbaugh, a professor of crisis communications at Webster University in St. Louis, Missouri.
For instance, in the case of Enron, most people had never heard of the brand. What people do remember, however, is the effort by Ken Lay, Chair and CEO, and the Lay family to be less than forthcoming. They remember Mrs. Lay saying they would lose their house and crying on television. The public doesn't care about the problems of Ken Lay's family. The public cares only about the thousands of families who lost their jobs and retirement money. The Lays can move into one of their other houses.
Just like medics prioritizing treatment based on the severity of the wounds, part of the reaction to a crisis response must include a structure for how to prioritize your response to media requests.
After a crisis there could be thousands of press calls for print, Internet, radio and television sources. Depending on circumstances, decisions must be made as to which media outlets are the most important to communicate with first. CNN will broadcast to 39 countries worldwide today. The Wall Street Journal will talk to the United States tomorrow.
As a general rule, Mike Lawrence, executive vice president with Cone Inc., a Boston-based PR and strategic consulting company for consumer product corporations and nonprofit organizations, advises companies to respond to news organizations with the greatest reach for the most critical audiences. He gives the example of a chemical company in Western Massachusetts which accidentally released a big chlorine cloud. Police responded; news went out over the AP wire; the flood of calls began.
In that instance, he recommended going to local radio first to inform the community on the issue and whether evacuation is necessary. It is better to have your voice going out over the airways than that of emergency personnel. However, in the case of WorldCom, Lawrence's recommendation would be to contact those media sources that have the greatest influence with the national government (e.g., in the United States: the president, the Congress, and the regulators).
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Brand strategy experts Scott M. Davis, managing partner with Prophet Consulting, a national brand strategy-consulting firm, and Richard Levick, president of Levick Strategic Communications, recommend the following checklist for responding to crisis.
- Develop a simple message. No matter how complex the situation, reduce the message to no more than four points.
- Respond to all questions based on your specific message points. Bring all questions back to these specific message points.
- Be upfront, honest and trustworthy. You must provide full disclosure and completely own up to the situation in terminology people understand. Now is not the time to hide something. Most strong brands are given at least one chance to make a mistake.
- Think speed. Be ready to tell all you know and answer all questions as quickly as possible to maintain control over information during a crisis. If you don't have the whole picture, detail what you know. Explain that you are cooperating with all relevant parties and that you are disclosing relevant company records. The burden is on you to do whatever is possible to regain the public’s trust as customers and investors.
- Empathize. Show you care. You can’t be too robotic or too stiff.
- Mea culpa. Remember, it may not be your fault, but it is your responsibility. Back in the 80's when Tylenol had its crisis with cyanide, it voluntarily took all its products off the shelf. Now it is number one in its category.
- Remember Machiavelli. "Good news over time, bad news all at once."
- Explain how the problem will be solved. The public needs to know what the company is doing to remedy the situation.
- Detail how the company will avoid repeating the problem again. To avoid losing credibility, plans must be clearly made to demonstrate the steps taken to ensure that the problem never happens again and to ensure safeguards are made and enforced. John Hancock developed an external ethics review board to monitor company behavior.
- Protect employees and customers. In order to save your brand, plans must be made to show what specific actions a customer or an employee can take if they are impacted in any way or if they have questions. Employees must be taken care of first. Their buy-in is critical as they are the lynchpin to stability and the brand’s representatives to your customers.
Thinking of the steps above, designate someone to be accountable and responsible for the situation. If you don't, the media will choose someone to represent you. For example, Martha Stewart--she should have held a press conference to explain the circumstances and what she is doing to rectify the situation. She could have gained flexibility and perhaps even some forgiveness from the public; after all she is a trusted brand. Because she didn’t comment, she let the situation fester, build in importance and allowed herself to became fodder for late-night comedians and media pundits.
Recovering and rebuilding the brand
Companies must plan to emerge from a crisis even while in the midst of trouble. To illustrate this point, Alfred Geduldig, partner at New York-based Geduldig-Ferguson Public Relations, a marketing and branding company, related a story of an airplane that crashed in the Florida everglades. Disaster recovery crews determined that there was a fire in the cockpit. The plane crashed because everyone was fighting the fire and no one was flying the plane. Even in a crisis there must be a division of labor. Companies must figure a way to fly the plane and put out the fire at the same time.
What this means is that companies must restore confidence in the brand. Today's CEOs taking over or restoring embattled companies must:
- Help employees believe in employment
- Get employees to believe in the brand
- Get investors to buy into the company
A few years back, Crayola had a problem with a chemical used in its crayons. Their modus operandi was to do everything they could to protect their customers. To respond to the crisis and convince the public that the crayons were safe, Crayola recalled the product, pulled the questionable chemical additive out and reformulated the entire product line. To further ensure consumers, they partnered with an independent third party, the Consumer Product Safety Commission, to produce a study reassuring the public of Crayola's product safety. This added third-party validation to their solution. Today consumers think of Crayola as safe.
WorldCom's new corporate officers are also showing examples of rebuilding and restoring. Important customers are being offered signing bonuses to remain on. Meanwhile, WorldCom is making an effort to separate the integrity of the organization from the original officers without trashing them in public. No doubt, WorldCom wasn't prepared for the magnitude of its crisis, but its attempt to manage through should lead to eventual positive results and perhaps an example for future organizations in crisis.
This article is the second part of a two-part piece on preparing for and managing through crisis. [23-Sep-2002]
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David Liss is a freelance writer, public relations consultant and occasional business radio host based in Washington, DC. He would love to hear your thoughts about this article and your ideas for others.
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Aug 26, 2002
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Commodities: Branding the Basics -- Eric Mirabel
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How do we go about turning a commodity product or production capability into a new brand? We look at the Middle East, a transitioning market where manufacturers are branding commodities.
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Aug 19, 2002
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Brands in Toyland -- Ron Irwin
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Is branding in the toy world just child’s play? We look at how traditional brands like LEGO and Brio stand up to the dazzlingly high-tech competition.
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Aug 12, 2002
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Long Live the King -- John Karolefski
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Young and svelte, bloated and strung out, Elvis had universal appeal throughout his short lifespan. The king may be dead but apparently the brand lives on.
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Aug 5, 2002
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IBM Navigates the Biotech Maze -- Edwin Colyer
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IBM Global Services is expanding to a variety of areas like its recent acquisition of PwC Consulting. We look at how a brand like this penetrates the life sciences market.
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Jul 29, 2002
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Do Nonprofits Have Value? -- Robin Rusch
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As we unveil Interbrand's league tables of the world's most valuable brands for for-profit brands in 2002, we ask, Is there value in a nonprofit brand?
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