Crisis Manager Interviews Ripoff Report

In this week's issue of the Crisis Manager newsletter, BCM President Jonathan Bernstein interviews ED Magedson, founder and editor of a website anyone in crisis management will be sure to recognize, the "Ripoff Report." The interview, which contains both Magedson's responses and Jonathan's commentary, asks, and hopefully answers, some common questions about the controversial consumer complaint service.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Playing Ostrich

Many businesses now have a documented crisis management plan – a backup strategy for dealing with a major crisis in the business such as a fire or theft.  However, few businesses think ahead to an effective communication plan during a period of crisis.

The global financial crisis is a good case in point.  Instead of taking a proactive approach with their clients, many businesses chose the ‘ostrich’ option.  That is, put their head in the sand, hope it will all go away soon and that clients will leave them alone until it’s over!

This quote from a post on the Clarity Press blog discusses a problem that confounds many businesses once things go awry. The tendency to play ostrich is one that BCM President Jonathan Bernstein has also discussed, and is, unfortunately, a very common reaction by businesses when confronted with the need for crisis management. Focusing on open, honest communication with stakeholders will not only help you move past a crisis, but improve your business by helping you to learn what these stakeholders want and need from your organization.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/
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Handling the Media

Working with the media is an integral part of every crisis management plan. So much so, that just how well you handle this relationship can make or break your company or client's reputation. In a recent article for TechWithUs.com, Thomas Murrell discusses the right way to do things during a crisis:

The keys to performing well in such a situation are planning and preparation. When a crisis occurs know the exact status of it and every fact available. For example who are the people involved, what are the circumstances and what is the latest information?

Also act decisively. A crisis is no time to dither. Get as much information to the media as quickly as possible. If you don’t take control of the information, the media will look for other sources to provide a ’sound bite’ or ‘news grab’ and these may not be accurate or reliable contacts.

Often in a crisis, rumour, emotion and incorrect information can quickly fill the information void. Continually update the media as information comes to hand.

When presenting and planning your media response think of the target audience
and what words will reassure them. Be involved and take a ‘hands-on’ approach. Do television interviews on location rather than in a comfortable office remote from the crisis and audience.

Because these messages are only as effective as the spokesperson who delivers them, it's in your best interest to invest in media training and simulations before a situation arises.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Credit Card Crisis

Any time credit information is compromised it's bound to cause a crisis, so when it was found that the credit card information of several users of Blippy.com, a site that allows users to share online purchase information, could be found via a simple Web search, people took notice. TechCrunch has more details:

Earlier today, VentureBeat detailed a major Blippy privacy breach that exposed user credit card information to search engines. The breach appears to have occurred on a small scale — Blippy believes that only four users had their credit cards compromised — but the fact that it happened at all is unsettling. After all, Blippy’s service asks users to entrust it with their credit card information (and in some cases, their credentials for online services) — it is of paramount importance that Blippy keep that data secure.

Blippy's crisis management for this issue will have to be textbook, and fast. Because the site's entire concept revolves around users' willingness to share credit information, things will quickly collapse should their reputation take a plunge.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

BP's Oil Rig Disaster

Last week's explosion and sinking of an oil rig was just the latest in a series of disasters that have plagued petroleum giant BP. With several safety measures failing on their most high-tech and "safe" rig, the company will face investigations and questioning from several different sources. A quote from the Times Online UK elaborates:

The accident was the deadliest for America’s offshore industry in more than two decades. The question now is who gets the blame.

Tony Hayward, BP’s chief executive, has staked his reputation on cleaning up the company’s act. When he took over three years ago, the oil giant’s image was still tainted by the 2005 explosion at its Texas City refinery that killed 15 people and injured many more. The company paid millions in fines and pleaded guilty to criminal charges.

BP had just six men on the Deepwater Horizon. The rest were employees and contractors of Transocean, the firm that owned the rig and was responsible for the drilling. US authorities, Transocean and BP have all launched investigations to work out what went wrong.

It's never safe to assume that your worst-case scenario can't or won't happen. Although obviously we all hope for the best, it's good crisis management to prepare for disaster.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

European Air Closure Draws Criticism

Across the continent, airports are operating and the airlines are flying again, but the complete halt to air transportation in Europe over the past week -- the first such instance in history, with more than 100,000 flight cancellations -- will be the subject of heated debate in the coming weeks and months.

The industry estimates that the cost of the closure of European airspace totalled $1.7 billion (around €1.3 billion). According to estimates by the International Air Transport Association (IATA), the flight ban paralyzed, at least for a time, around 29 percent of all global flights. Over the weekend alone, $400 million a day in revenues were lost. The Association of European Airlines (AEA) is estimating total losses at close to $1 billion.

This quote from an ABC News article is among many taking a closer look at the events that transpired over the course of the European air closures. With airline and airport owners alike claiming the level of ash was nowhere near dangerous, questions are being raised about the validity of the crisis management strategy put into place by the European Organization for the Safety of Air Navigation, also known as Eurocontrol.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Social Media Helps Stranded Travelers

As has been the case with nearly every natural disaster in recent memory, social media has been a life saver for individuals and organizations affected by the massive ash plume resulting from the Icelandic volcano eruption. A recent post on the SharkeyMedia blog shows just how social media became an integral part of crisis management for the disaster:

Tweeter JL Pagano from Ireland first used the term #ashtag to speak about his personal concerns of the situation, and it quickly took off with other passengers. A number of airlines then started using #ashcloud on Twitter and official updates, and usage skyrocketed to over 55 thousand mentions of #ashtag in just one week. A lot of the usage was from customers themselves sharing tips and stories. Airlines such as KLM, Lufthansa, British Airways and Air Baltic were able to use Twitter as the medium for effective customer service and flight status updates, relieving call centres and providing reassuring, real-time conversation.

Soon after, a newbie called #getmehome became all the rage, along with #roadsharing and #stranded. Those publicly tweeting for help were given rides, accommodation and breakfast by complete strangers over the social media. Even on Facebook, airlines were taking control of the situation. SAS Scandinavian developed a full-scale customer service effort to address every single wall post on their Facebook Page, proving much more effective than listening to endless hold music. One SAS team member said, "about 15-20 people in both Oslo and Stockholm have been involved directly updating social media since Thursday. In terms of fans, we went from 15,000 Thursday morning, to having passed 21,000 today.” Airlines like Virgin Atlantic linked their Facebook Fan Page with updates on their official website, and EuroControl's Fan Page became the biggest hot-spot for leading info on Facebook.

Not only are these companies building goodwill with customers by keeping them informed, but gaining thousands of followers who will likely continue to see their messages and visit their sites long after the crisis is over.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Courtroom Crisis Management

Rarely does a crisis management professional have to use his skills to defend their own reputation. However, as this quote from TheWrap.com explains, we are about to see one of the biggest names in the business take on this very task:

Mike Sitrick, called the Wizard of Spin for his deftness at crisis management for A-list clients, may have some spinning of his own to do.

In a lawsuit filed Monday in U.S. District Court in Los Angeles, Sitrick & Company is accused by a former employee, Richard Wool, of manipulating the value of its employee stock option plan.

By undervaluing the price of these shares, the complaint says that Sitrick -- whose clients include Halle Berry, Ron Burkle, Chris Brown and Rush Limbaugh -- was able to regain complete ownership of his company prior to the company's sale last October to Resources Connection, potentially costing  shareholders millions of dollars.

With his own name and a large sum of money on the line, Sitrick's defense is likely to be a premiere example of litigation-related crisis management -- for better or worse.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Why Can't We Learn from Other People's Mistakes?

"Those who do not learn from history are doomed to repeat it."

This George Santayana quote is one of the most famous in the world, yet we constantly see organizations making the same mistakes that others have made before them. In an article originally written for his own newsletter and reprinted in the most recent Crisis Manager, Australian crisis management professional Tony Jaques looks at one particularly bad move that's been repeated several times in the fast food industry, each time with disastrous results.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Harmonic Convergence

Would you rather have your online reputation be associated with your beautifully written corporate values or with the terms "vomit" and "crap"? That is the question posed by guest author Merrie Spaeth in her article for the latest Crisis Manager, "Harmonic Convergence". In it, Merrie examines the reasons why it's is beneficial for each organization to be conscious of the informal flow of information regarding itself, and gives an example of one whose employee's carelessness cost millions. 

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Crisis Manager Online

The latest issue of our Crisis Manager newsletter is now up on the Bernstein Crisis Management website! This time we have a guest who, although frequently mentioned on this blog, has never before graced the pages of the Crisis Manager with a piece of her own, the one and only Merrie Spaeth. In her article, the communications guru and creator of the infamous Bimbo Awards gives a primer on keeping your company's messages consistent. Following that, we have an article borrowed from Australian crisis management expert Tony Jaques' newsletter that poses the question, "Why Can't We Learn From Other People's Mistakes?"

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

CA Attorney General investigates Palin Payments

California Attorney General Jerry Brown's announcement that his office has kicked off a "broad investigation" (pun intended?) regarding a California State University foundation's payments to Sarah Palin has raised a number of issues like these, from a USA Today article:

In a statement issued by his office, Brown insisted his investigation has nothing to do with politics. "This is not about Sarah Palin," he said. Rather, he said, he's concerned about maintaining "prudent fiscal management" of the state university foundation's funds. "We are taking this action to make sure that the money raised goes toward the intended educational purposes," Brown said.

Brown's statement says he's investigating charges that university officials tried to destroy documents relating to Palin's payment. The university has denied those charges.

Joking aside, with the amount of press generated by this case the CSU foundation's reputation has taken damage before the investigation has really even begun. At the same time, should Brown's case prove to be flawed, it will be the Attorney Generals' office doing some very public crisis management to protect its own credibility.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Learning From Toyota

Every crisis holds valuable lessons for both those directly affected and their peers. A recent AP article, published on ASICentral.com, asked professionals for some lessons that other business owners can learn from Toyota's recent crisis management mistakes and got several responses, including one from BCM President Jonathan Bernstein:

"...the best way to deal with a crisis is before it happens, according to Jonathan Bernstein, president of Bernstein Crisis Management Inc., and author of Keeping the Wolves at Bay. He explains that shipping errors or full-blown product recalls can be prepared for in advance with an immediate plan of action. “One of the rules of my business is, ‘The slower the response the more damage you do,’ ” he says.

Toyota was already days into its crisis before it mounted a response and as a result its reputation took a fast, hard dive. Except in rare cases, delays only provide more time for rumor, speculation, and ill-will to spread.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Twitter Developers Upset

When Twitter purchased Atebits, maker of the Tweetie app, it slapped the face of loads of third-party developers who had helped rocket Twitter to a raging success. More than 70,000 applications have been created to allow users to tweet on the go, geotag, shorten URLs, post pictures and more, and now that Twitter has made its "official" Twitter for iPhone app -- as well as one for RIM's BlackBerry -- the microblogging service may be biting the hand that fed it and rotting relations with developers.

This quote from PC World should give you a small idea of how upset many developers were this week when it was announced Twitter would be buying the small company and, along with changing Tweetie's name to "Twitter for iPhone" and dropping its price from $2.99 to $0, would be promoting it as the "official" Twitter app for the iPhone.

The fallout among developers as a result of these events and the recent release of the free "Twitter for Blackberry" app didn't go unnoticed by higher ups at Twitter, and Platform Team leader Ryan Sarver stepped in for some crisis management with an email to the concerned parties. Although his mail, a copy of which was quickly acquired by the San Francisco Chronicle, did promise to avoid using the word "official" in relation to future Twitter clients, the company stuck by their decision. With reactions still flooding the Web, it remains to be seen whether this will drive developers away from Twitter or attract them to stay and strive to outdo the "Twitter for..." series.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Three Questions to Keep You on Track During a Crisis

•  How are my stakeholders being negatively affected by what’s happening?
•  What can I do to rectify that situation?
•  How can I best communicate my actions to my stakeholders?

These three questions, posed by Grant Smith in a post on his Media Insights and Crisis Expertise blog, can keep your organization on track when you find it in need of crisis management. Making it a priority to keep the public informed of your actions while in the process of apologizing and making amends will help protect not only your reputation but also everyone involved. 

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

College Crisis Management

According to a recent poll, many college and universities have never actually tested their crisis management plans. The poll, whose results were published by Campus Technology.com, contains some figures that are bound to cause concern for students, teachers and their families:

According to the results, 54 percent of institutions have tested their crisis response plan in the last year; 23 percent have never tested their plans. The largest obstacles to executing tests, according to the research, were timing (67 percent), participation (43 percent), budget (40 percent), and securing campus-wide buy-in (36 percent).

The survey also found that 51 percent of schools have had a crisis on their campus in the last two years; and a third of respondents have low or no confidence in their institution's ability to execute the plan in the event of an emergency. Only a fifth of respondents said their campuses had annual meetings to brief the relevant people on the crisis response plan.

Crisis testing and simulation are essential tools for both preparing your crisis response teams and finding and plugging the flaws in your plans. With so many factors at play on and around a major school campus, not taking these steps is a major gamble that could have catastrophic results.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Trouble at the Vatican

By now the Vatican should be no stranger to crisis management. After all, the organization has faced issues with misconduct and molestation among their members for years, yet every time a new situation comes up they somehow manage to bungle the response. In a recent post on his ManagementHelp.org PR and media relations blog, Martin Keller told the Vatican exactly what they need to do to be more effective:

Does the Pope have an in-house public relations team, or is the Vatican getting expensive, or pro bono, outside counsel to handle the latest, growing scandal over the actions — and alleged cover up by pre-pope Ratzinger, then a Cardinal, and others  — of one particularly notorious pedophile priest who was accused of molesting more than 200 deaf children in Wisconsin? Whatever the answer, those inflicting their advice on the Holy See, need to be shown the door. Yesterday.  They have mismanaged this crisis by magnitudes of 10 or more.

Rather than accepting responsibility and making amends, the Vatican's spokespeople have made every effort to redirect blame away from the wrongdoers within their organization. The principles of transparency and honesty are almost completely absent in their behavior and responses, and as a result the reputations of everyone involved are being dragged through the mud.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Perfect Description

Since the advent of social media platforms, boundaries between CEOs and the general public have become almost nonexistent. Customers now have direct access to the people managing companies, and they expect them to be openly accountable. This provides companies with the unique opportunity to address a crisis situation by telling their story directly to the consumer. By acting swiftly with honesty, transparency and humanity, they can mitigate the damage and maintain their customers' trust.

This quote from an InlandSoCal blog post is a perfect description of the incredible potential that social media holds for marketing, public relations, and crisis management. While some companies are still wary of putting their high-ranking employees in direct contact with the public, there are very few who have done so that regret it. In most cases the increased level of interaction and communication actually serves to reinforce brand loyalty while at the same time attracting new customers and good publicity.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

AOL Apologizes

When AOL CEO Tim Armstrong publicly bashed work done by some of his employees, the media grabbed ahold of the quote and ran with it. Armstrong quickly realized that having your employer's disparaging comments aired in public is bad for morale and invited the 250 employees whose work he had commented on to a meeting. Although the meeting was closed-door, The Business Insider managed to get this report from their sources inside AOL:

A source who was in the room tells us Tim didn't "bullshit" and that he was "head-on" about his mistake. He said something like, "I said that the SXSW thing was crap because it was crap. My mistake in this was in coming to the press with this and not coming to you guys."

When he was done talking Tim passed the microphone around the room. He took some "pretty tough" questions, answering them in "a fairly sophisticated way" that "was pretty reassuring."

One editor used a complicated metaphor somehow involving a shower handle to ask a question which basically boiled down to: "Why do we writers have to deal with so much bureaucracy and bullshit?"

Tim answered, "You guys, the people who create the content and the people who sell the ads, they are the ones everyone else at AOL works for including me."

By going about his crisis management in a humbler, honest, and apologetic way, Armstrong enforced the value of his employees and generated press to counter-balance the negative publicity he had initially received.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Jump Start

Every terrorist attack or natural disaster serves as a reminder of just how fragile the things we take for granted really are. In a blog post motivated by last week's subway bombings in Moscow, Eileen O'Connor, of law firm McDermott, Will & Emery, described some ways you can get a jump start on crisis management for these unexpected incidents:

So how does one prepare for the unthinkable? You think about it by identifying the most likely terrorist or criminal threats and natural disasters and planning for them. You should also know and understand the plans of your workplace and community. You talk to family members about what to do in the event of an emergency by picking meeting locations, with one near home and one removed from home, in the event that your home is in the “hot zone.” You also develop a crisis communications plan for staying in touch if you are separated when the crisis occurs or afterward.

When you're already knee-deep in trouble it's extremely difficult to formulate a plan. By covering the basics before anything happens, you make things easier, and safer, for everyone involved.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Four Ways to Lie

Bernstein Crisis Management President Jonathan Bernstein's article, "Four Ways to Lie," is now available at his newest blog, featured at the Free Management Library. The post contains several different ways that dishonesty among individuals and organizations can create crisis management issues, as well as lending some advice to the Vatican in the midst of their very troubled times.

Of course, we are reminded of the saying, "God speaks to us in a quiet voice so that we can reserve the right not to listen."

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Toyota's Troubles Continue

Toyota has had a difficult time with crisis management for their recall. Even when they've been trying to do the right thing there have been critical mistakes made, like this one, described in a post on the blog run by British crisis management pro Jonathan Hemus, Insignia Talks:

It was interesting to note that Toyota did not follow the Ryanair policy of non-engagement, and instead fielded a senior spokesperson for the programme, executive vice president Takeshi Uchiyamada. I applaud Toyota for taking this approach and trying to communicate their perspective: a policy of engagement is essential if an organisation is to shape the discussion and avoid being a helpless bystander as the crisis rumbles on. However, Mr Uchiyamada was hindered by his inability to speak English which necessitated the use of subtitles. In addition, his eye contact was weak and fleeting: both of these factors meant that he failed to make the impact that he might otherwise have achieved. A confident English speaker identified as an engaging communicator via a programme of media training would have been more effective in representing Toyota’s position.

No matter how well crafted the message, an ineffective spokesperson will render it weak and ineffective. Jonathan's post goes on to describe several other points in the case where Toyota dropped the ball, along with his take on how they could have done things better.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/

Unvarnished

A new social media service, Unvarnished, which entered its beta phase just yesterday, is already drawing ire and raising trepidation among many professionals. With the wild popularity of social media, why is the launch of Unvarnished causing such a stir? This quote from a TechCrunch article explains:

Today, Unvarnished makes its beta debut. It’s essentially Yelp for LinkedIn: any user can create an online profile for a professional and submit anonymous reviews. You can claim your profile, but unlike LinkedIn, you have to accept every post, warts and all. And once the profile is up there’s no taking it down.

I asked co-founder, Peter Kazanjy, “Will you ever give users the option to take down their profile?” Kazanjy’s reply: “No, because if we did that, everyone would take their profile down” (see our video with Kazanjy after the break). Thus Unvarnished is a service that depends (and ultimately profits) on digital paranoia and our growing anxiety when it comes to our online identity. Doesn’t give you the warm fuzzies but (as Mike Arrington points out in “Reputation is Dead”) it is perhaps a logical evolution of social media. The site’s fundamental concept is not new (ikarma.com, Jerk.com) but Unvarnished has the best interface to attract a large community of professionals.

This type of site, where users can create a profile for you without your consent or knowledge and then anonymously post anything they like on it, is a crisis management nightmare waiting to happen. With hundreds of profiles already on the site, even in the beta stage, and no way to refute false claims except actively reply to them, businesses and individual professionals may be forced to become frequent users of this site in order to protect their own reputations.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com/