Tuesday, August 31, 2010

Surviving a Recall

"Recalls undermine trust in a specific brand and it can take the company a long time to recover from the damage to its reputation, but it doesn't have to take a long time if the company uses good crisis management tactics," Manpreet Hora, an assistant professor in Georgia Tech's College of Management, said in a study analyzing 500 recalls. "Consumers are forgiving, so if a firm apologizes, acknowledges the problem, and doesn't make the mistake again and again, consumers will continue to be loyal to that brand."

This quote, from a post by Ilya Leybovich on the Industry Market Trends blog, is right on the money in terms of the role crisis management and people skills play in protecting and rehabilitating brands which have been faced with product recalls. While the initial damage will obviously vary from one situation to another, with careful handling and honest business practices even seemingly dire situations like Toyota's recent massive recall can become "history" and not an ongoing issue.

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

Sunday, August 29, 2010

Insurance for Eggs

Egg producers are no strangers to recalls, but following the most recent salmonella outbreak, one of the largest in U.S. history, some are looking towards an emerging service that could lend a hand in recall crisis management. BusinessInsurance.com explains:

The recall of half a billion eggs tainted by salmonella linked to chicken feed likely will cost hundreds of millions of dollars and ignite further debate over whether food producers should buy product recall insurance, experts say.
Advertisement

While interest in the coverage has increased as a result of several recent high-profile recalls, the market for product recall coverage is still developing, they say.


Some recall insurance extends so far as to cover not only losses from business interruptions, bodily injury and product loss but also the critical phase of reputation rehab, including advertising and consumer education, without which it becomes difficult to move past the incident and return to normal operation.

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

Friday, August 27, 2010

Philippine Police Problems

The Philippine police force is facing international criticism after their bungling of the recent hostage situation in Manila cost eight Hong Kong tourists their lives. Broadcast on nearly every major television network, the incident has destroyed any last remaining shreds of good reputation the force held on to and exposed its lackadaisical crisis management methods. This quote from an article on TheStar.com explains:

Even when the situation looked dangerous, they appeared to be nonchalant and seemingly unconcerned about how the deadly kidnapping could end.

The police negotiators were seen joking and laughing with the disgruntled former cop who demanded to be reinstated in his job in return for releasing the hostages.

In fact, it even had the CNN newscaster asking at some point why the authorities were taking the whole situation so lightly.


This is not the only hostage incident to have taken place in the Philippines recently, and now national attention is being brought to the rising trend. If the issue is not corrected and the country's image rehabilitated, the negative effects will trickle down to the region's tourism and hospitality industries, costing both lives and money.

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

Monday, August 23, 2010

Pirates Sink Their Own Ship

Sports teams are vulnerable to crises just like any other business, sometimes even more so because of the large sums of money and public interest involved. Fans of Major League Baseball's Pittsburgh Pirates have become accustomed to their team bringing up the rear, but careless handling of questions regarding team finances have landed the organization in hot water. The Meadville Tribune reports:

So how do the crisis management experts at the Pirates handle the news the Associated Press had gotten its hands on and was working on a story that showed the team had made nearly $30 million in 2007 and 2008 (they won 135 of 324 games during that time).

They invited four local media outlets to a press conference to address what they felt was going to be a story that misrepresented the Pirates financial situation.

“The presumed implication that anyone in the ownership group is lining their pockets is inappropriate,” Nutting told the four media outlets.

Hard to figure how anyone would come to that conclusion about a team that had $30 million in profits and consistently had one of the lowest payrolls in baseball.

The Associated Press, the one agency with a national reach and the one working the story was not invited to the press conference. The AP story was picked up by newspapers and every national sports outlet and website all over the country with no Pirate response, further making the Pirates look ridiculous.


Crisis management experts will tell you, "no response" is the same as an outright admission of guilt in the minds of the public. By neglecting to involve the national media or respond to the AP's questioning, the Pirates have not only alienated and upset their fans, but attracted negative attention across the country.

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

Saturday, August 21, 2010

The Ostrich Syndrome

There are many steps to be taken in a crisis, and while there are differing opinions as to which is most important, Davia Temin made a convincing case for one in a recent Forbes.com article. A quote:

Most important of all--in any crisis--is to short-circuit denial! It's a human trait when disaster strikes to go straight into "this can not possibly be happening to me." Or "if it is happening, it can not be that bad." Or, "even if it IS that bad, no one will ever notice..." The more quickly you move beyond this denial, the more quickly you can put in the right fixes ... and that makes all the difference to how the crisis will unfold, and how you will be remembered.

This "head in the sand" phenomena is encountered so frequently when assisting organizations with crisis management that the BCM mascot is lovingly known as "OhNo the Ostrich," a humorous homage to a dangerous problem. As the quote states, moving quickly past this denial frees up the ability to control and direct the crisis and the opportunity to bolster your reputation in the process, while choosing not to is only delaying the inevitable.

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

Thursday, August 19, 2010

Crisis Management Through the Customer's Eyes

I'm probably the last person you want to hear from now. I'm what you call a customer. Chances are, you don't know me. You're fast asleep when you fly over me on red-eyes. You profess undying love for me in company lore—and ignore me in practice. You've built a Byzantine infrastructure to insulate yourself from me. And now you want my understanding and forgiveness.

So let me spare you an eye-popping billable from some media guru. Fact is, you'll never appease those talking heads on cable. To save your brand, you'll need to reconnect with people like me. And you'll accomplish this only by looking at the world through our eyes.


This quote, from a BusinessWeek article, introduces an idea that often revolutionizes an organization's crisis management plans - looking through the eyes of the customer. While it is common for most every business to have some type of crisis management plan in place, taking the viewpoint of an outsider can reveal serious flaws that would otherwise go undetected until an actual crisis strikes and the court of public opinion tears you to pieces.

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

Tuesday, August 17, 2010

Public Lacks Trust for Media

A recent national poll found American's faith in traditional media to be holding at extremely low levels, and with no signs of improvement in sight. Here are the numbers, from Gallup.com:

Americans continue to express near-record-low confidence in newspapers and television news -- with no more than 25% of Americans saying they have a "great deal" or "quite a lot" of confidence in either. These views have hardly budged since falling more than 10 percentage points from 2003-2007.

The findings are from Gallup's annual Confidence in Institutions survey, which found the military faring best and Congress faring worst  of 16 institutions tested. Americans' confidence in newspapers and television news is on par with Americans' lackluster confidence in banks and slightly better than their dismal rating of Health Management Organizations and big business.


The steady decline in trust and confidence for traditional media has been caused by several issues, but much blame can be laid on the increasing amount of unethical behavior by reporters and media outlets. As BCM President Jonathan Bernstein wrote in his article, "Fight Back Using The Journalistic Ethics Code," also available in shorter form at his Huffington Post blog, the increase of globalized news via the Internet, falling ad revenue, and growing popularity of sensationalism have all contributed to this decline.

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

Sunday, August 15, 2010

Semi-Transparent

A Washington State fire department is learning crisis management on the fly as it copes with an underage drinking incident involving several of its high-ranking members with a major funding vote approaching. While the response from the department's Chief shows that he is aware of some of the tenets of both crisis and reputation management, not following through 100% may cost him. This quote from Dave Statter's popular Fire/EMS blog STATter911 explains the situation:

Chief  Tom Lique, aware that some in the public think the department keeps information from public view, is trying to use the fact that they are releasing the details just before the election as something positive. he told The Bellingham Herald, “I’m hoping the timeline here, as uncomfortable as it is, demonstrates that just because of the levy, I’m not trying to stonewall or hide this information.”

Now that sounds good but later in the article reporter Christian Hill writes that Chief Lique refuses to release the internal report on the incident. The actions don’t appear to support the chief’s words.


The old adage still stands true, actions speak louder than words. Because he refuses to release the department's internal report of the incident, Chief Lique's claim that he is striving for transparency looks like a lie, and regardless of his actual intent the media will take that misstep and run with it.

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

Saturday, August 14, 2010

Nobody is Immune

Large or small, even the best managed businesses may be hit by an unexpected public relations crisis. These can be recalls of dangerous or contaminated products, a civil product liability law suit, or some other unforeseen disaster that may hurt sales, the bottom line, and reflect badly on a company's image.

As this quote from a Yahoo! Finance article states, no business is immune to crisis. A fine example of this is supply chain interruption. While many do not consider the possibility in their crisis planning, even the most basic operation will grind to a standstill at the loss of their primary suppliers if there is no plan for other sources or delivery methods. While some, hospitals for example, are almost expected to have issues, there are subtle causes that could create a need for crisis management in any organization.

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

Friday, August 13, 2010

Crisis and Reputation Management

Your reputation is your most valuable asset. While crisis management can begin with very few reputation management practices in place, failing to bank the good will that it can create before a crisis hits is a dangerous choice. In a recent article Bret Giles, President of agencyside, gave a couple of excellent examples:

A client with reputation management practices in place makes crisis management that much easier. When Southwest ran into issues with a vocal, overweight celebrity, the energy it had invested in reputation management made the crisis much easier to address. With no reputation management, the brand is left to implement a crisis management plan with few to no tools. For instance, recent stories surfaced about Enterprise Rent-A-Car renting vehicles that had been recalled, resulting in unnecessary deaths. This is a crisis. This calls for crisis management. Unfortunately for Enterprise, they barely have a Facebook presence, have essentially no Twitter presence and cannot easily deploy a group of evangelists to extol the virtues of the brand. They will not speak on camera. They look guilty and they have no one there to protect their reputation.

There are many more recent examples, from the good (think Apple) to the downright ugly (BP, Toyota). With methods that can be scaled according to each organization's needs and budget, there is no excuse for ignoring reputation management.

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

Sunday, August 8, 2010

Hurd Hurts HP

Hewlett-Packard's crisis management team has been hard at work this week following the sudden resignation of CEO Mark Hurd. Leaving after revelations of an inappropriate relationship and improper use of company funds, the formerly revered Hurd will float out on a $12 million dollar golden parachute loaded with hundreds of shares of HP stock. BusinessWeek has more details:

 The departure leaves Hewlett-Packard, the world’s biggest maker of personal computers and printers, in search of a new CEO and chairman after more than five years under Hurd. On his watch, the Palo Alto, California-based company regained leadership in the PC market from Dell Inc. and used acquisitions to expand into new areas, such as computer services. The company’s stock-market value increased $44.6 billion, rising to $108.1 billion, since Hurd took the helm on April 1, 2005.

“Clearly he’s been a significant leader and visionary in restructuring the company,” said Jeffrey Fidacaro, an analyst at Susquehanna Financial Group in New York. “It’s going to be a significant loss to the company in terms of operations.”

Hewlett-Packard fell $4.31 to $41.99 in extended trading. The shares, down 10 percent this year, dropped 5 cents to $46.30 earlier today on the New York Stock Exchange.


While HP was successful in mitigating reputation damage by distancing themselves from Hurd, their struggle now is to convince stakeholders that the loss of the man who masterminded its recovery and nearly doubled its stock value will not hurt future performance.

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

Saturday, August 7, 2010

Brand Extortion

It has become incredibly popular to turn to the Web to find and post reviews of businesses. Led by services like Yelp!, Google Reviews, and Facebook to levels of use never imagined by the once-formidable Yellow Pages, most if not all remain free to use and profit from banner or sponsored ads run on their sites. While many have ethical rules for treatment of both businesses and customers, there are some who seek to profit unfairly from the business world's growing interest in reputation management. This quote from a post by the Ecoconsultancy blog's Meghan Keane explains:

Squidoo is providing a forum for brands to monitor, control and influence their reputation online. But rather than letting brands set up their own pages, Squidoo is doing it for them and dangling control over the site for the $400 monthly fee.

If that price sounds like a threat, it is. If Brands in Public becomes a space where people go to learn about brands, it would be in a company's best interest to influence the way they're pictured there. It's up to them to decide if it's worth paying Squidoo $4800 a year to influencethe way they look in the space.


While one would hope that consumers are keen enough to disregard the site because of its nature, should it become a popular page businesses may be forced to decide whether to fold and pay up or lose their chance to enter the conversation.

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

Friday, August 6, 2010

Target Facing National Boycott

Target is in big trouble. The retail giant's recent decision to donate $150,000 to Republican gubernatorial candidate Tom Emmer has drawn the ire of the public for more than one reason. Sam Stein reports in The Huffington Post:

Target has already come under intense scrutiny for the $150,000 it has given to a Minnesota-based group for the ostensible purposes of influencing the governor's race. Not only is it one of the first high-profile companies to take advantage of the Supreme Court's Citizens United ruling (allowing companies to make unlimited expenditures on political campaigns) it chose, in Emmers, a longstanding opponent of gay rights.

    Target has spent over $150,000 in the Minnesota Governor's race backing state Rep. Tom Emmer, a far-right Republican who supports Arizona's draconian immigration law, wants to abolish the minimum wage and even gave money to a fringe group that condoned the execution of gay people.

    Target must think customers won't care. They're wrong: We do care, and we need to let them know that we want Target--and all corporations--out of our elections.

    Will you send a message to Target CEO Gregg Steinhafel telling him that you're not going to shop at Target unless they stop trying to buy elections?


The protests have, so far, been confined to within Minnesota. But MoveOn is pushing for a much more deafening, national response -- targeting Target on Facebook in addition to an online ad campaign that was also launched on Tuesday.


With both political and civil rights motives powering the protest efforts, Target needs to start crisis management, now. If the popular chain allows the situation to progress and be fueled by the rumor and innuendo that a continued silence would produce then it will undoubtedly lose both reputation and revenue.

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

Thursday, August 5, 2010

Does New Jersey Stink?

Merrie Spaeth's BIMBO awards are a constant source of amusement and education as she compiles the poorest communications choices people have made in the previous month. This month the top prize went to the state of New Jersey, which has felt the need for crisis management after the recent rise of negative Jersey stereotypes on television and in media brought concerns about decreased tourism. Straight from the BIMBO Awards site:

“New Jersey Doesn’t Stink”  is the state’s campaign slogan to fight back against stereotypes like MTV’s popular “Jersey Shore.” (We applaud Gerry Wilson, CEO of High Point Insurance and the founder and sponsor of the idea, for trying to show people that New Jersey is – in the words of their website, “a beautiful melting pot state with mountain scenery, tourist attractions from the Atlantic City boardwalk to colonial Princeton.” However, they’ve put billboards up in the state. Surely, they should be putting them up in neighboring or other states? And the campaign has spawned parody, with one columnist suggesting the slogan, “New Jersey: We’re FBI Friendly.” Our bottom line assessment? Great way to get attention, but we wonder if the positive message will get through.)

Besides the state's gaffe of posting the billboards only in an area where people probably already believe Jersey is OK, using negative words like "stink" in an attempt to improve the image of something is never a good idea. Despite their intent, negative words leave negative connotations in reader's minds and can easily be used out of context to do more harm than good.

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

Wednesday, August 4, 2010

Google Gives Businesses a Voice

Google is now letting businesses respond to reviews posted on their Place Pages in Google Maps. This should be huge for reputation management, particularly as Google continues to place increased emphasis on these pages.

"Engaging with the people who have shared their thoughts about your business is a great way to get to know your customers and find out more," says  John Maguire of the Google Place Page team. "Both positive and negative feedback can be good for your business and help it grow (even though it's sometimes hard to hear). By responding, you can build stronger relationships with existing and prospective customers."


As this quote from a WebProNews article states, Google's latest addition to their popular "Place Pages" (think Google meets Yelp!) should come as welcome news to anyone tasked with the job of monitoring and managing their business' reputation. Presenting the opportunity for even the smallest of operations to engage in crisis management by refuting unfair claims or publicly apologizing and making amends for mistakes, tracking and improving stakeholders' view of your organization is easier than ever.

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

Tuesday, August 3, 2010

Own Your Identity

As part of an effort to promote a "road diet" on Chicago Drive SW, Grandville officials looked into creating a Facebook page.

But they found out the city already has a presence on the social networking website. Although unofficial, the site looks like what city officials had in mind.

"We can't figure out who's doing it," said Matt Butts, assistant city manager. "I was going to reply (to the anonymous page administrator): 'This looks great. Who are you? Can we work together?'"


While this quote from an mlive.com article describes a seemingly cute and innocuous situation, take a step back and imagine what could have happened if the page's creator had a bone to pick with the city. Allowing others to control your organization's identity is a major crisis management no-no. For a prime example of a seemingly official social media account causing trouble for an organization look no further than the impostor @BPGlobalPR Twitter feed. When the feed first started BP's reputation dipped even lower than it already had as hundreds of bloggers and Twitter users posted furious responses to the sarcastic statements regarding the Gulf spill. The good news is that the vast majority of social media services will help restore control to the rightful owners, so get out there and own your identity.

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

Monday, August 2, 2010

Internet Reputation Management

As the Internet makes it increasingly easy for anyone to track, publish and spread information or opinions, online reputation management continues to become even more integral to crisis management. Just what does reputation management entail? iBusinessTip.com explains:

Reputation management is the process of tracking an entity’s actions and other entity’s opinions about those actions, meaning the search for what people are doing and what others think about what people are doing.  It’s a bit like online gossip, but reputation management goes further than just People magazine.

Entire Internet related responsibilities, such as search engine image protection (SEIP), were created for the sole purpose of protecting a person’s name and reputation from undesired public information.  Reputation management is important to individuals, businesses, non-profits, politicians and more, because it affects so many areas of life. 

There are many ways to execute reputation management on the Internet; one way is to overwhelm and eliminate negative listings that show up when people search a name or term in Google.  However, things have changed and online reputation management is evolving and new services such as online image consulting and litigant image enhancement is growing.


The fact that much of the public perceives the average YouTube video or Twitter posting as credible means that one unhappy customer affects the opinions of an incredible number of people. Although approaches differ, the goal of all reputation management is to understand and improve stakeholder perceptions of your organization.

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

Sunday, August 1, 2010

Room to Wiggle

Wherever there's a crisis you are bound to find the media, and simply dropping a curt "no comment" is not going to cut it. While good crisis management dictates that organizations push a statement out quickly, leaving a big of wiggle room can prevent future problems. The Get in Front Blog explains:

Anyone who is publishing content in Social Media, speaks with journalists, or writes press releases knows that there are words that can trap you with little or no way out.

They are: never, always, and definitely.

These three words can spell trouble because reporters and writers are trained to listen. They often take things literally. For example, you may say to a reporter, “Our family-run liquor store has never sold alcohol to anyone under the age of 21.” Most reporters spend their days digging for information, scanning the Internet, and asking a lot of questions to a variety of people. They are curious. They look for cracks in your story. They will find the old buried archive from 1971 when your dearly departed Grandpa sold beer to a 17-year-old who was killed in a car accident.  And you said “never”.

Instead of using words like never, always or definitely, start to think in vague terms. Avoid the pitfall of painting yourself into a corner.


We often say that in the absence of communication, rumor and innuendo will fill the gap. Keeping early statements flexible grants the ability to both plug this hole and ensure that nobody is caught in an inadvertent lie.

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