The Business Crisis

“These are the times that try men’s souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman.” – Thomas Paine

lucy-chian-34385-unsplashAs far back as the late 1700s, even Thomas Paine knew that “shrinking from service” during a crisis was a bad idea. That sentiment remains true today.

In my most recent article, “The Biggest Mistake Businesses in Crisis Make,” I noted the mistake in question was not realizing when one is already in a crisis. I also noted the four primary phases of any crisis: discovering the crisis, disclosure of the crisis, managing the crisis and completion of the crisis. Here I will explore the second phase, disclosure of the crisis.

Stage Two: Houston, We Have a Problem

The disclosure of a crisis can take many forms. The worst is when businesses learn of the situation via the news media. More often, however, it is the business itself that identifies and discloses the crisis by recognizing a problem exists and pulling in the leadership team to debrief and consider options.

The decisions made by leadership during this discovery phase determine whether the situation will be truly negative or if a positive outcome might result for the business. The best-case scenario is for businesses to already have a crisis communications plan. Management must also be willing to address the issue at hand as well make meaningful changes to better the situation for the business as well as its clients or customers. In such situations, there is potential for the business to emerge with its reputation not only intact but possibly improved by demonstrating its responsiveness and sincere effort to make needed course corrections.

However, as Mr. Paine alluded, those who shrink from the responsibilities of meeting a crisis head-on only add to the damage. One need only consider Toyota’s 2010 recall debacle and the company’s initial, repeated denials of any vehicle defects to recognize that failure to take ownership of a crisis situation and create a corrective action plan can do serious damage to a business’ reputation.

Best Practices

As I’ve noted repeatedly, businesses are best protected when they already have a crisis communications plan in place. However, that isn’t always the case. Sometimes, business leaders must prepare for a crisis by creating a plan either immediately before a storm or in the eye of one.

In such situations, we recommend business leaders, upon discovering the problem, take the following steps promptly:

  1. Quickly and thoroughly assess the facts of the situation and its practical impact on the business/customers/employees
  2. Begin planning what steps must be taken immediately, as you also look at long-term strategies to remedy the situation for all parties involved
  3. With your crisis communications team and attorney, create a small crisis response team with clearly defined roles and responsibilities
  4. If you don’t have media response and social media protocols, create them
  5. Craft a response strategy and related messaging that will help ensure your side of the story is made simply and clearly
  6. If possible, prepare by testing your strategy and responses through simulations with your crisis team
  7. Consider all your audiences, including your employees, when you craft your messaging and strategy, and tailor the tone and style of each message to each audience — while making sure you are consistent with facts
  8. Don’t lie, don’t speculate and be sure to put your emotions aside as you prepare to manage the crisis

What is key to remember is the steps listed above must happen in near synchronicity, and they must happen quickly. Depending on the situation, businesses might be faced with a crisis in the public eye with little or no warning. I’ve seen crisis situations emerge where businesses get a day or two of warning before news goes public. However, I’ve also gotten phone calls from C-suite executives who received phone calls from reporters seeking comment on situations these executives were completely unaware of, with only minutes before publication or broadcast of the story.

If you believe the reputation of your business is important, you need to know what steps to take and how to communicate effectively to help protect that reputation.

Lack of planning, poor communication and disorganization in response to a crisis situation can lead to a “bet the business” risk responsible business leaders don’t need to take. Following the steps above when a significant problem arises can help your business weather a crisis.

In my next article, I’ll discuss managing crisis situations, including what to look for, how to respond and how best to manage both the crisis and yourself as you attempt to shape the resulting impact.

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#WheresZuck and the Issue of Trust

no fb

Five days. That’s how long it took for Mark Zuckerberg to respond publicly after the revelation that Facebook data was used by U.K.-based Cambridge Analytica to aid the Trump campaign. During that time, Facebook stock lost more than $30 billion in value and #deleteFacebook swept other social media platforms.

Did he respond as fast as possible, gathering all the facts and developing a plan? Or did he wait too long? I’m always a fan of a fast response in the face of a crisis, but also of a response that is strategic and made with all the facts. So, look at the Facebook timeline:

On Monday Paul Grewal, deputy general counsel at Facebook, made the first comment, saying in an email that the company is taking action to make sure the data harvested has been deleted: “We are in the process of conducting a comprehensive internal and external review as we work to determine the accuracy of the claims that the Facebook data in question still exists,” he said. “That is where our focus lies as we remain committed to vigorously enforcing our policies to protect people’s information.”

Monday’s news read like this CNBC report: “The future of Facebook as an advertising platform was called into question by marketers, lawmakers and privacy activists on Monday after revelations that its data on 50 million users was harvested and used by Donald Trump’s political ad firm in 2016.” A hashtag also appeared: #WheresZuck, a sign that the world was waiting for the founder to speak.

On Tuesday, Facebook went further in a statement: “Mark, Sheryl and their teams are working around the clock to get all the facts and take the appropriate action moving forward, because they understand the seriousness of this issue. The entire company is outraged we were deceived. We are committed to vigorously enforcing our policies to protect people’s information and will take whatever steps are required to see that this happens.”

Their strategy was clear: to say that they, too, were victims who were violated and they would take strong action. They also promised Mark would speak on Wednesday—by which time #DeleteFacebook was trending, a WhatsApp cofounder had joined the movement and tens of thousands of users had, indeed, deleted Facebook. Plus, governments on both sides of the Atlantic were calling for more regulation.

When Mark finally spoke on Wednesday, putting a long statement on Facebook, he took responsibility and laid out a plan to ensure this doesn’t happen again. But he stopped short of apologizing (which he did later in media interviews).

So, was five days too long to wait for the Facebook response? It seems so. Even if they needed time to gather all the facts and formulate a plan, Zuckerberg could have posted this himself, because it seems his audience only would hear from him, something he should have known. And what was never addressed was why nothing was disclosed about a problem that may have known about since 2015.

Dante Disparte outlines the problem nicely:

The coat of Teflon that usually shields Facebook and its affable leader, Mark Zuckerberg, who has matured into a techno statesman in the public eye, is beginning to wear thin. Facebook now joins a growing number of firms embroiled in a trust deficit with a case of reputation risk whiplash. …Facebook’s eroding market confidence appears to be self-induced by 5 days of silence and lax third-party risk management. Reports of more than 50 million personal records being accessed by Cambridge Analytica… is not only a terrible violation of consumer privacy, it highlights how trust (the new thrift of the modern economy), is hard to earn and easy to lose. (Read more in Disparte’s Wednesday article in Forbes.)

Losing the trust of regulators, business partners and the public—that’s what happens when your response to a crisis is too little, too late.

 

Sorry Seems to Be the Hardest Word

#YOUTOO_

There is no shortage of powerful men being felled by scandal lately. From Hollywood to Wall Street, from Capitol Hill to the Fourth Estate—no industry is immune. And it appears the cycle of revelations, accusations, ham-fisted apologies, pseudo-apologies and angry denials is just getting started.

Considering the scale of this wave of accusations, business leaders need to ask themselves: What do we do when it happens to us?

Most of us hope this won’t happen to our organization. However, hope is not a strategy. Most companies have anti-harassment policies and this seems like the ideal time to dust off those employee handbooks for a review. But to be effective you should be proactively communicating your policies to ensure compliance. Deploying some simple, professional and preventative internal communication can make a world of difference. It’s easier to avert a fixable problem than to ignore it and try to do damage control later. Because, frankly, there is no good way to respond to accusations of sexual misconduct.

However, there is a right way. With the hurt victims, misuse of power and highly-charged feelings, these situations first require an empathetic, human response. That’s where communications come in. I can’t comment on the legal procedures. And the human resource issues are another matter as well. However, I can provide insight into how skillful crisis communications can protect a business and the people that are part of it.

Beyond their fiduciary responsibility to the company, business leaders are responsible to the people with whom they work to be prepared for any scenario—yes, even sexual harassment—with a disaster recovery plan. And that includes a robust crisis communications strategy. A lack of clear communications can make employees feel unmoored and demoralized.

However, having a plan ensures everyone in your organization is on the same page. It lets employees know you’re dialed-in on the issue and taking positive steps to address it. In part, you will also help protect the jobs of those who have done nothing wrong but are nonetheless impacted. Having a communications strategy for this type of scenario reassures your clients and customers you are looking out for their interests as well. But most importantly, planning for the worst will help to produce the best possible result under the circumstances. It may very well save your business.

So, ask yourself: What will you do if your CEO or board member or a high-ranking manager is accused of inappropriate sexual behavior in the workplace? What will you do when the local news station calls for comment? Do you have a plan?

The answers come from conducting a realistic threat assessment. From that assessment, you must create a communications plan that ensures your company can effectively weather such a scandal, including the rebuilding of trust with your employees, customers, vendors and the public. You need buy-in from stakeholders, clearly defined roles, back-up personnel and—most importantly—a rock solid commitment to the truth and sharing the facts as you know them. Developing a plan like this takes time, so first focus on prevention. But also have a plan.

After all, the worst time to prepare for a crisis is when you are already in one. As we’ve witnessed through countless media statements from the accused, saying “sorry” isn’t easy. In fact, when done poorly—yes, I’m looking at you Kevin Spacey—these statements make matters substantially worse, adding to the number of negative news cycles, the confusion of employees and the pain of survivors.

 

How can hotels use social media during a crisis response?


Photo credit: Mark Emery Photography via Foter.com / CC BY-NC-ND

The majority of hotels recognize the critical need for crisis response planning. But have they factored in social media? Over at Hotel Executive, Gary explains eight ways hotels can be effectively using social media during a crisis response.

 

Trump organization gets it right on data breach communications


Gage Skidmore / Foter / CC BY-SA

Donald Trump has jumped to the top of the Republican primary polls with an acerbic style that runs contrary to established political rhetoric. But when Trump International made the announcement yesterday that it was hacked, the PR effort was by the book.

And effective.

The Donald Trump Hotel chain says its payment data system was breached, potentially exposing customers’ credit and debit card information for more than a year. The chain posted a notice on their website and media coverage like this CBS report shows how to communicate a breach:

  • The facts about the breach: malware may have given hackers access to payment information between May 19, 2014 and June 2, 2015
  • The exposure: they have “not found any conclusive evidence that the information was taken or misused.”
  • Steps taken to correct it: they notified the FBI and financial institutions and hired an outside forensic expert to investigate.
  • Recommendations for customers and what it is doing to help: offering a year of complimentary fraud resolution and identity-protection services.

The Donald is in the crosshairs of many, so the New York Daily News and others took their shots, but coverage was once and done. As of now, they appear to have avoided what the IRS, Target and others have done – underestimate the extent of the damage in their initial reports, leading to multiple news reports and keeping the story alive.

Will it all come out in the wash?

I’m on my way back from The Clean Show, where there was tremendous interest in my TRSA-sponsored educational session, “Crisis Communications: A Practical Guide to Protecting Your Reputation.” Whether they were commercial laundry operators or others in the textile industry, attendees recognized the importance of communicating effectively in a crisis.

A massive, cylindrical washing machine

Space ship or tunnel washer? You decide.

Among the highlights of my presentation were:

  • Having a crisis response plan that includes communications protocols for media, customers and other key audiences.
  • Identifying a spokesperson who can represent the company well.
  • Dos and don’ts of media interviews, focusing on honest, open communications.
  • Preparing talking points that drive all answers in media interviews.
  • Incorporating social media in a crisis communications plan
  • The role of leadership in navigating a crisis effectively.

Following the presentation, TRSA hosted a press conference to unveil results of a new survey that reported business and consumer perspectives on service professionals wearing uniforms. The conference also unveiled the new TRSA animated video we developed with videographer Tom Donnelly.

Opening day on the trade show floor was eye opening with the size of the equipment and advanced technology used by the commercial laundry industry TRSA represents. For me, it was a valuable window into an important, far-reaching industry.

A large green banner depicting a women clutching plastic saying "sometimes I feel like I'm drowning in plastic."

The laundry industry has a bright green streak.

How to integrate social media in crisis communications


ePublicist / Foter / CC BY-ND

A crisis is a time of uncertainty that requires the careful management of information. If you don’t move quickly to present the facts and explain your position, then others will do it for you – and that puts the accuracy of the words and images they use beyond your control.

The words and images you use can either spell success and strengthen your future or damage your company’s reputation for years to come. The impact of social media on the crisis communications process has been significant.

Today information flows faster is more complex and independent. It is spread through multiple channels, and as a result, is often less reliable and more difficult to control. You often have just a few hours or minutes to communicate.

Social media must be fully integrated in your crisis communications plan. That means, your social networks are of equal import as other audiences and your community manager should be an effective communicator, as well as a media-savvy professional with appropriate technical skills.

Messaging must be also consistent with other channels, but appropriate for social networks. Candor is expected and an authentic voice is critical.  And, as crisis communications is a two-way process, listening through your social networks can inform your communications with many different audiences.

Above all, you need to consider and plan for all contingencies. Each type of crisis should be considered. Social media will play a critical role in communicating during and after natural disasters, terrorist attacks, cyber breaches and, of course, crises created by social media. But also consider its role in financial crises, human resources issues and (in the insurance world) claims and service issues.

Join me on Thursday, Feb. 12, 2015 at 11 a.m. EST for the IMCA webcast, “Integrating Social Media in Crisis Communications,” where I’ll explore these issues in more detail.