Category Archives: Crisis Communications
During and after Super Storm Sandy, we witnessed a variety of commercial responses to the storm, from the selfless to the craven. There are those, like American Apparel and Ace Hardware, that have attempted “blow out” sales and earned jeers from the Twitterverse. There are those, like many local restaurants, that have selflessly donated food, supplies and labor to relief efforts. And those who have tread the delicate line of offering support while delivering a potent marketing message.
One example of a marketing effort done well was from State Farm Insurance which, when Gawker and its sister sites lost server support, sponsored the temporary Tumblr pages. This effort was helpful, not overtly promotional, relevant and non-intrusive. It’s a challenging balance to strike, but provides some useful signposts.
When considering communication during a crisis, ask the following questions:
- Is it necessary? Keep customers and employees informed of how you are affected and how you are serving them, if they are affected.
- Is it relevant? Does the standard “thoughts and prayers” message make sense and is it meaningful under the circumstances?
- Is it appropriate? During times of emergency, the dominant tone, especially in social media, shifts from snark to sincere. Misjudging tone is simply an unforced error.
- Is it helpful? If you are able to help, do so. The goodwill is always worth it. If you can help in a way that reinforces your brand, so much the better. JetBlue is among the companies that have harnessed the power of their customer base to give frequent flyer points to those contributing to the Red Cross. This is an ingenious way to drive contributions and forge closer bonds with customers.
- Is it over? Be judicious in determining when and how to return to business as usual. Expect a lingering somber tone as communities adjust to losses and new realities.
Navigating crises is never easy, but a sensitive approach can position companies well into the future, while missteps can inflict serious reputational damage. Think twice before putting your marketing hat on – think service, relevance and community.
Winners & Losers of the Lance Armstrong debacle; An Rx for The Foundation’s Survival
October 17, 2012
Nike has a long history of standing by their spokespeople in times of trouble. I’ve long admired their use of sound judgment and their ability to separate an athlete’s personal choices relative to the reasons they chose him as a spokesperson to begin with. They refrain from panic and reactionism, and protecting their brand, and perhaps even saving a few careers along the way. They weren’t concerned about Tiger Woods and his affair. When LeBron James enraged an entire city, Nike stood by him. They even stood by Lance Armstrong through his decade-long denials about performance enhancing drugs. Until today.
When it became clear that Armstrong is a doper, and a liar, they acted. Now, one could argue that everyone has known this for years. The same way everyone knows it about lots of athletes. Not sure what event tipped them over….unless it was a long overdue private admission by Lance himself, but I doubt it.
Nike demonstrates the kind of behavior I celebrate in a client…they are obviously getting good advice, and acting on it.
If Nike dumps you, you must have done something seriously wrong. Seriously. The Lance Armstrong brand, which moved so far beyond the Tour de France victories and into iconic stature as a symbol of courage and hope for cancer victims everywhere, is irreparably damaged. Sure, he still beat cancer. But he isn’t a role model. Not to anyone. Not anymore.
Ultimately, it was that very bravado we all loved that caused his downfall. In a demonstration of hubris usually reserved for Congressional inquiries, Armstrong repeatedly lied (and continues to lie), thinking that his compelling and courageous story of beating cancer gave him permission to do so.
A legacy was ruined today. He was lucky to dance between the rain drops as long as he did. The fact that he continues to deny it is a demonstration of the problem.
In an important nuance, Nike clearly rejected Lance Armstrong, but professed their support for the Livestrong Foundation. Both brands have a lot to lose here, and we’re not just talking about yellow bracelets. There is an entire line of apparel and shoes, representing millions of dollars in sales. The Livestrong partnership is the ultimate personification of Just Do It, in action. So Nike is sticking by them, for now. Presumably, that licensing revenue will keep them afloat, even if they have a short term disruption of donor support. But that window isn’t forever. If the foundation wants to survive they need to do 3 things, quickly:
- Put a new face to the Foundation. Quickly. Starting with their leadership. But they need other iconic, celebrated “heroes” who’ve survived cancer to get more involved.
- Energize the base – they need to communicate with their employees, partners and major donors…condemn Lance Armstrong the athlete, but remind people of the importance of the mission to fight cancer.
- Rally and leverage third party support – the best way to change the narrative is to tell the stories of the impact of the Foundation’s work. Third parties tip the scale in the he said, she said game. And it is clear that Armstrong isn’t going to take a bullet to keep the foundation afloat.
Chesapeake Energy CEO Gets Fracked
May 2, 2012
In the annals of corporate perks, Chesapeake Energy made the Top 10 list by allowing co-founder and CEO Aubrey McClendon to buy into 2.5 percent of every well the oil and gas company drilled. Even better, Mr. McClendon paid for the very lucrative perk with personal loans he arranged with companies Chesapeake did business with such as Wells Fargo and Goldman Sachs, an innovative new spin on payola.
The story gets even better. At first, the Company, through its general counsel, said that the Chesapeake board “was fully aware” of the very comfy financing arrangements. But then with the glare of media lights and the scorn of shareholders upon them, the board walked it back and provided a public clarification that it was only “generally aware” of the deals that had Mr. McClendon use his stakes in the Chesapeake wells as collateral. Not sure how close “generally” is to “fully” but it looked to provide some cover.
The parsing of words did not do much to quell the shareholder outrage and today word comes that Chesapeake’s directors have forced Mr. McClendon to step down as Chairman. All this comes after shareholder outrage last year forced the board to rejig Mr. McClendon’s compensation to make it performance-based, a concept that seemingly took some time to reach the old-boy and one-girl board in Oklahoma.
Chesapeake, which calls itself “America’s Champion of Natural Gas” on its website homepage, touts “Bold Moves, Big Future” but unfortunately, Mr. McClendon’s bold moves for his personal gain combined with rock-bottom natural gas prices have smacked the Company’s stock price and made many question the oversight and independence of its board. The board of directors’ influence on a corporation’s reputation is probably greater now than it ever has been and missteps can counteract even the best corporate responsibility programs.
Directors need to be not only on top of all that goes on in the companies they serve but also the reputational impact of what they do and what they say. New regulations on things like “say on pay” (as Citigroup recently found out) are just part of the brighter spotlight and great scrutiny on boards. Communications expertise and issues/crisis management counsel must no longer stop at the executive suite. Smart boards, when faced with situations like Chesapeake, need to examine closely not only their words, but the optics, because it all plays out from share price to corporate standing to the bottom line.
The Long Tail of the Walmex Scandal
April 30, 2012
Walmart presents a tricky issue for community, civic and government leaders. Organized labor opposes them…for their refusal to commit to union construction, and for their large, unrepresented work force. Community watchdog groups bemoan the traffic and congestion that accompanies a new store. But consumers (aka voters) love their value prices and one stop shopping.
Is the Walmex scandal really the reason Walmart is facing opposition? Or is it a convenient excuse for their opponents to rattle the sabre and rally the troops? And will it really prevent them from expanding?
It should be interesting to watch…would love to hear your views.
Walmart has a trust issue…but it’s not the one you think
April 25, 2012
The world doesn’t need another blog about Walmart’s Mexico problem. We all know the deal: allegations of bribery pose reputational risk. So does obstructing and covering up an internal investigation…offenses that lead to textbook responses: board and executive resignations, the appointment of watchdogs, a re-examination of policies. And as we know, Walmart has had plenty of practice with implementing textbook responses.
For me, the bigger question is why Walmart continually has these kinds of problems. Discrimination, sustainability, living wage, healthy eating, health care – the biggest issues imaginable seem to dog the biggest retailer on the planet. We already know that Walmart is politically polarizing. Labor unions, environmentalists and employee advocates oppose them at every turn. Now in the wake of the Mexico scandal, some are calling Walmart an international embarrassment. It’s only a matter of time before one of these issues — if not the cumulative impact of all of them – destroys the retailer’s reputation for good.
With so much crisis communications experience under their belt, you’d think Walmart would have it figured out by now. But instead, Walmart’s reputation problems are precisely because they follow the crisis communications checklist above all else. They create rigorous supply chain policies to serve as a shield against environmental activists. They create such stringent ethics policies that you can be fired for letting a contractor buy you a soda. They appoint watchdogs for everything that ails them. And then they wear those policies and procedures like a bulletproof vest enabling them to do whatever they need to do to make a buck.
It isn’t bulletproof. In fact, the excessive reliance on stringent policies suggests an underlying truth: they don’t trust their people, including their own leaders, to act ethically, responsibly and in alignment with their values. And when you expect very little of your people, they rarely disappoint. They extort compliance from their suppliers, then turn around and do something entirely different.
You can’t legislate morality or corporate culture. The question of culture is a complicated one – but it’s one that is increasingly coming under scrutiny. Corporate citizenship isn’t just about eco-responsibility and philanthropy – and it’s clear that the behavior and culture of an organization will continue to be front and center.
So, yes, Walmart has a trust issue alright – they don’t trust their employees, their partners or their vendors. And they’ve demonstrated that they shouldn’t be trusted either.
To solve this problem, Walmart doesn’t need another czar, policy or another initiative. They need another outlook. Maybe even another leadership team. (Here is an interesting piece suggesting that what they really need is a female CEO.) They need to shock their system, or there will be a steady stream of Mexicos down the line.
But the real risk facing Walmart is not Mexico or whatever big issue comes next… it’s the danger that people will decide that the high price they pay for low prices isn’t worth it, and vote with their wallets.
A Big Stumble in the Race for the Cure
February 3, 2012
Some NGOs court controversy and engage in political theater to promote their causes and fill their coffers. Until this week, the Susan G. Komen Foundation, the leading breast cancer charity, was mostly known for pink ribbons, hot pink adorned athletes, their Races for the Cure across America and efforts to promote breast cancer screening and finding and battling the disease. All that changed with the announcement of the organization’s decision to cut funding to Planned Parenthood. The news unleashed a torrent of opposition to Komen from cyberspace to Capitol Hill and has proved a monetary godsend for the beleaguered Planned Parenthood.
Though the drama continues to play out, it quickly damaged the reputation of Komen, with organization executives resigning in protest, women throughout the country cutting up their pink ribbons and Komenwear, calls for boycotts and politicians racing toward microphones to opine on the decision From a crisis communications aspect, an organization needs to war game the potential public reaction for any controversial announcement (and first appreciate what in fact will be controversial) and be prepared for potential reactions among all its stakeholders. This can help decide what and how to communicate. For an otherwise incredibly savvy- marketing Komen, there seems to have been a serious lack of planning here or appreciation of the impact of the news.
The initial rationale for the decision that was floated tied the defunding to new criteria which barred grants to organizations under investigation. For Planned Parenthood, this was a seemingly politically motivated investigation by a conservative Republican Congressman. Thus, Komen was catapulted into the center of an election year scrum amidst passionate politicos of all stripes. With social media already hyper-buzzing, Komen added even more fuel to the flames with a poorly scripted and stiffly delivered defense of its action on its Facebook page.
As the controversy took over the airwaves and digital media (with Planned Parenthood reaping the benefits of the media onslaught and a rush of new contributions), Komen committed perhaps an even bigger communications gaffe. It changed its story. Yesterday, Komen founder Nancy Brinker, grimly and combatively did the cable TV circuit, to offer a new rationale for the funding cut and equivocate a bit on what the decision meant to future grants for Planned Parenthood. The reason du jour was now Komen’s desire to support groups that directly provide breast health services and that Planned Parenthood only provided referrals.
Earlier today, Komen reversed course.
It apologized, asked for peace, pleaded that it did not cave to political pressure and indicated that it would fund existing grants to Planned Parenthood. What the finely crafted statement (better than anything it did previously) did not say was if Planned Parenthood would be funded in the future. Though contrite, Komen still seems to be giving itself some wiggle room down the road. This fire fight may not yet be over, but it is already offering lessons in what not to do from a crisis communications perspective. In time, we will be able to gauge the effect on Komen’s standing and the multi-millions it raises each year and whether its serious stumbles in terms of communications and issues management, from before it even made an announcement through the seeming squishiness of its apology, will cloud its future…
The Pink Scandal: Who are the winners and losers in the Komen Foundation Reputation Debacle?
February 3, 2012
Planned Parenthood – who may get some reprieve from being the poster child for abortion and re-cast for what they are – a provider of women’s health services – and one that heavily serves poor and uninsured women — a population of women who often have few options for healthcare.
Former Komen Exec Mollie Williams – who got out of dodge before things got ugly and has handled media inquiries with dignity and grace.
Serendipitous Beneficiary – The American Cancer Society – long respected for their work to combat the dreaded “C” word – they have the opportunity to “take back” breast cancer as their own, and mobilize support from the people who still want to fight cancer, but don’t want to support the Komen Foundation.
No surprises here - The Susan G. Komen Foundation, and the research that may see a decline in funding if support for their efforts dwindles. You have to question whether ceasing a $600,000 grant – a drop in the bucket for both organizations – was worth the reputational damage.
Women – Millions of uninsured and low income women who rely on Planned Parenthood for their healthcare needs, including cancer screenings.
The employees of Susan G. Komen Foundation – When the sex abuse scandals of the Catholic Church were on the front page, a priest friend told me he was ashamed to wear his collar in public for the first time in his life. I would imagine that many of the employees at the Foundation work there because they passionately believe in this cause. Overnight, they’ve gone form walking tall and proud because they work for the gold standard to defending themselves and their employer.
Collateral Damage – The color pink is no longer the new black; but the pink ribbon may be the new Scarlet Letter. Pinkwashing is the new greenwashing.
From a pink halo to a pink badge of shame…overnight
February 3, 2012
I often say that good communications is not an effective remedy for bad policy. When trouble hits, everyone suddenly needs “communications help.” But communications can only change perception if you’ve fixed the underlying problem. Case in point: the Susan G. Komen Foundation.
I remember when the Susan G. Komen Foundation came on the scene. It was early on in my PR career, and every client I had wanted to partner with them – almost as fervently as they wanted to be on Oprah. Soon we had pink everything – from KitchenAid mixers to diamond necklaces – all supporting breast cancer research. And the Komen Foundation became the Xerox, QTip or Kleenex of breast cancer. Heck, the NFL had a pink out. The Komen Foundation and the pink ribbon became the gold standard for every health advocacy group out there. Until today.
Unless you’ve been shut off from the world the past few days, you know that the Komen Foundation will no longer be funding mammograms and other cancer detection services through Planned Parenthood. I learned about it the same way you probably did – on Facebook. And if social media is a good indication, this one isn’t going to just pass over. The Komen Foundation has quickly become Public Enemy No. 1 for women everywhere, and put the debate over coverage of contraceptives on the back burner. Commentary ranges from statements about the power and influence of right leaning politics to suggestions that the foundation itself has lost its way in a sea of pink licensing and promotional deals.
The Komen folks point to a new policy that prohibits them from funding, but a recent story highlights the departure of a top executive as a result of that policy, and several inside sources who paint a picture of duplicity – a public Komen advocating for women, while privately scheming to cut off Planned Parenthood in a nod to conservative politics who’ve made sport of villain-izing Planned Parenthood. What inevitably follows is the question of Komen’s trustworthiness, and where the money goes. How much of the millions they raise through walks, endorsement, licensing and product sales really goes to cancer research, and with what kind of results?
The pundits will surely be lining up to talk about the importance of crisis communications. And yes, good crisis communications will be key to the very existence of the Komen Foundation. But this isn’t a communications problem – this is a policy problem. In an apparent nod to conservative politics, the Susan G. Komen foundation manufactured a new policy in order to sever ties with Planned Parenthood. The Komen Foundation seemingly forgot, or miscalculated, the priorities of its passionate advocates and supporters. Good communications, even great communications, can’t fix bad policy or bad decisions. The Susan G. Komen Foundation needs to make good decisions first, then communicate.
January 19, 2012
Last weekend’s tragic Costa Concordia accident just off the Italian coast continues to dominate news coverage days later thanks to the heroic stories of passengers rescuing themselves and each other and the almost daily revelations of the Captain’s incompetence, cowardice and excuses. Carnival Cruise Lines, parent of Costa, has seen its stock price plummet. The media and financial analysts are also speculating on costs to insurers and the cruise industry in general, particularly at the height of the booking season. Cable news and investigative reporters everywhere are breathlessly reporting on such topics as the “hidden dangers of cruise ships” and “what you need to know before you book a cruise.”
From a communications perspective, the Costa Concordia grounding shows how an entire industry can be sent into crisis mode from one player’s accident. And unlike the airlines, the cruise sector is focused purely on leisure activities so taking to the water is optional and not the necessity that air travel is for the majority of fliers. Therefore, companies such as Royal Caribbean, Norwegian Cruise Lines and even Disney are scrambling to reassure the public of their safety procedures and distance themselves from the egregious missteps that took place in Italy. One can also expect that a bevy of cruise sales are just around the corner.
For companies across industries, the lesson here is to be prepared to react and react quickly and appropriately when a crisis hits a competitor. The media and public, especially in the digital age can be fast and even reckless, painting an entire industry with one brush when there is an accident, scandal or any significant issue facing one player. This is a great time to dust off that crisis communications plan, see if it is updated to take account of social media and game plan how you would react if a Costa Concordia happened in your industry. There are times to be proactive as in the current crisis facing the cruise industry and there are times when you want to only be reactive, such as when a data breach impacts a competitor. Notice how quiet online retailers have been after Zappos’ data breach, as no one want to raise their hand to tout their security bona fides and challenge a hacker.
Can A Local Government Ever Fully Recover From A Bankruptcy?
October 14, 2011
We are well used to retailers, airlines and a host of tech/industrial/manufacturing companies filing for Chapter 11 to try to fix a variety of financial messes and start anew. But government entities seeking court protection under Chapter 9 are rare indeed. On Wednesday, Harrisburg, PA, the State Capitol, took that seldom traveled road against a backdrop of a spectacularly failed incinerator project and political sniping at the local and state level.
For the citizens of and the companies that do business in and with Harrisburg, the way forward is unclear, particularly in light of conflicts at City Hall and the State Capitol about the legality of the move, much less potential solutions. What is clear is that Harrisburg’s reputation (which already had some issues even with Central Pennsylvania partisans) as a place to live and work has taken a big hit that may take a long time to recover. The public’s opinion of government on every level is hovering at all-time lows and unlike a retailer or airline, a marketing/PR campaign espousing “business as usual” through the process and an even better outlook on completion of the restructuring is a much more difficult proposition.
With politicians at the local and state level added to the usual mix of employees/retirees/unions, vendors and other constituencies, it should be an even more contentious and volatile process. The political grandstanding and gamesmanship in the court of public opinion is already off to a spirited start, a sad harbinger of how things may go once the action picks up in the Bankruptcy Court. Given the current economic climate, the Harrisburg case will also be closely watched by other cities and municipalities teetering on the brink.
All that said, government entities, like companies, can come out of a bankruptcy filing stronger. A good example is Orange County, CA which sought Chapter 9 protection over a decade ago after its investment portfolio tanked. It will take leadership, comity, compromise and shared pain among government officials, employee groups, the business community and others constituencies dedicated to a common purpose and the greater good. The start does not look good but as restructuring communication professionals, we are always optimists.