Most people understand that if you do the wrong thing, you’ve earned your spot on the front page. A collapsed Ponzi scheme. An airplane somewhere other than a runway. A lawsuit.

But what happens when the actions of others put you in the middle of a story you don’t want to be in….when you are the scene of the proverbial crime, not its perpetrator? Like being the airline when the employee pops the chute and quits over the PA? (Disclosure: jetBlue is a client) Or being the hotel where sexual assault occurred and your employee was the victim? Or the restaurant where the mob boss was shot?

Crisis communications is about communicating, right? Maybe not. Sometimes the hardest thing to do is to just be quiet – to duck and let the story pass. Unless you are an enabler to the issue – something in your policies or actions enabled the situation, or could have prevented it – communicating just makes you a bigger part of the story.

Even though your instinct tells you to defend your Company’s honor, the more you communicate, the more you become a part of the story. This is especially true as the news cycle winds down, and the media starts looking for new angles for “day 2” stories.

For those reasons, Sofitel, the employer of the woman who was allegedly sexually assaulted by IMF Head Dominique Strauss-Kahn, and the site the location of the incident, has managed this crisis perfectly by cooperating fully with authorities and otherwise keeping its head low.

Sometimes the best strategy is to let it pass.

cwinters Crisis Communications Dominique Strauss-Kahn, IMF, Sofitel

The numbers are stunning – 77 million Sony PlayStation accounts hacked, 24 million Sony Online Entertainment accounts hacked, 12.3 million credit card holders information in possible jeopardy, including an estimated 5.6 million Americans.

Unfortunately some other metrics regarding the Sony data breach are also amazing – two days to contact law enforcement, five days to contact the FBI, seven days from the date of the breach for Sony’s U.S. subsidiary to issues a statement, nearly two weeks for the Company to offer more fulsome details of the attack and almost three weeks before Sony’s CEO issued a public apology. So much for learning lessons from Toyota’s long, fragmented and much maligned dance of disclosing details of the issues with its cars and seeking forgiveness.

Corporate bureaucracies, geography and culture aside, the rules of crisis communications are universal, particularly in the digital age of immediacy and no boundaries. Companies, whether U.S., Japanese or from Djibouti all need to get factual information out quickly (days are no longer a relevant measure of crisis response time), take responsibility, be transparent and exert control of the story in a crisis situation.
Sony like Toyota was a well respected company with a loyal customer base. PlayStation partisans are a more rabid even cultish crowd than Toyota drivers and they took to social media with a vengeance to air their outrage and savage Sony. Many are saying that they are done with Sony for good. Time will tell. Toyota has invested much time and resources in trying to win back trust of their customers and things are now getting back to normal for them. Sony will no doubt need to do the same.

The dichotomy between Sony and Toyota is the events that precipitated Toyota’s crisis were manufactured in-house while Sony was attacked by hackers (unless you are one of the conspiracy theorists who believe it was a disgruntled employee). If fact, Sony looks to be trying to make use of this victimhood in an effort to gain some sympathy from its customers as well all the elected officials and regulators investigating the situation. We will have to wait and see how this works out for them.

In the end, the Sony data breach shows once again that a company’s crisis response can be as, if not more damaging than the crisis itself. Toyota’s recall fiasco of 2010 cost it $5.1 billion or 16 percent in brand value according the latest Interbrand’s study of Best Global Brands.

The Sony saga is not over but it will be interesting to see how their brand value is impacted. Also worth watching is whether the next global company facing a crisis in the U.S. or elsewhere will heed the lessons of Toyota and now Sony.

rtauberman Crisis Communications PlayStation Network, Sony, Toyota

What a difference a month makes. Last month Warren Buffett was praising David Sokol, his erstwhile successor who made a hasty departure amid the scent of an insider trading scandal, as a great guy whose purchase of Lubrizol shares prior to the Oracle of Omaha buying the Company “were not in any way unlawful.” At this weekend’s Berkshire Hathaway annual meeting, normally a lovefest for 40,000 Buffett shareholders and devotees, the Oracle used words like “inexplicable”, “inexcusable” and “very damning evidence” to describe Sokol and what now looks like share purchases that will end with a perp walk.

Buffett is legendary for his investment acumen and vigilance regarding his and his firm’s reputation. After a month in the media spotlight regarding the Sokol/Lubrizol affair where questions swirled about what the Oracle knew and when he knew it, whether he was just getting too old and was off his game, or whether he was just a hypocrite when it came to Sokol, Buffett came clean and admitted that he “obviously made a big mistake.” Time will tell whether Buffett’s reputation took a hit. He has built up considerable good will over the years and the Sokol fiasco as well as the big hit to Berkshire Hathaway profits in the first quarter as a result of insurance losses will likely not do lasting damage to the man or his company’s reputation.

The Sokol/Lubrizol affair is just the latest example of the response to a crisis situation creating seemingly more problems for a company and its executives than the crisis itself (think Toyota, BP, Goldman Sachs and Johnson & Johnson). Crisis communications 101 teaches that you take control of the message quickly, be transparent, only release information on what you know and never speculate. From the start, Berkshire Hathaway dropped the ball, whether due to Buffett’s loyalty to a key member of his team or just not knowing the facts. The media jumped all over the issue and for a month reveled in discussing the seamy details and timeline of events, repeating Buffett’s reputation mantra and highlighting the ode to Sokol in the company’s press release.

Now, a few weeks late, Buffett has held forth on the issue and provided a mea culpa. Charlie Munger, Buffett’s right hand man summed it all up nicely at the annual meeting in typical Berkshire Hathaway understatement when he admitted that it “wasn’t the most clever press release in the world.” It also wasn’t the most clever way to respond to a crisis and that should be the lesson for the normally very clever Oracle and the rest of us.

rtauberman Crisis Communications Berkshire Hathaway, BP, Goldman Sachs, Johnson & Johnson, Toyota, Warren Buffett

I was traveling last week when Southwest made its announcement about grounding flights for inspection after passengers on a flight experienced the reason that airplanes don’t have sunroofs. Suddenty all of the pre-flight stand up comedy about safety didn’t seem so funny, as passengers blacked out while the aircraft dove to an altitude where oxygen masks wouldn’t be necessary.

Southwest has catapulted from the scrappy start up who mastered the quick turn and whose culture and cheap fares made them the airline everyone loved to fly. And they’ve enjoyed cruising on that reputation for many years. They embrace being an industry outlier – air baggage handlers proudly promote that they load free bags, for example. Will safety concerns put a chink in Southwest’s previously “bulletproof” reputation armor?

In the airline business, safety is the greens fee. And while the airline has worked hard to minimize the concerns, that very attempt to minimize the issue may be reputational suicide. I was in the airport while the “minimally disrupted” passengers were told they would not get to their destinations for TWO DAYS.

There are other indications that the reputational decline of Southwest are on the horizon. Southwest ranked 5th (out of five) in the “kindest airlines” rankings – which is based on performance data, not customer opinions.

What should Southwest do? Educate their stakeholders, in the authentic Southwest fashion. For an airline that is known for its use of candor, embracing dialogue and utilizing all channels, Southwest’s response to this situation has been decidedly by the “textbook” – straightforward statements issued via traditional means. Technical language about the “non-destructive test (NDT) in the form of High-Frequency Eddy current of the aircraft skin” doesn’t make customers feel safe. Southwest should think about how to make the technical aspects of safety accessible, meaningful and engaging. For the short term, they should balance the dialogue about free bags with dialogue about safety. And they need to keep the sunroof closed.

cwinters Crisis Communications Southwest Airlines

This Tuesday, the Supreme Court will hear the case of Dukes v. Wal-Mart, a class action lawsuit regarding alleged discrimination by the world’s largest retailer against women in regard to pay and promotion.

The case has potentially huge ramifications for class action lawsuits, equality in the workplace and Wal-Mart’s reputation. As the Bentonville behemoth deals with the media blitz surrounding the case, one is reminded that on any given day, Wal-Mart is likely dealing with a crisis somewhere in the world. From citing its superstores to consistent issues about how it treats its people, suppliers and the small businesses in its communities, Wal-Mart bashing is a popular sport. And that doesn’t even take into account the usual lists of employees behaving badly, product/service troubles and legislative/regulatory matters, and the minor acts of God that any major multinational must deal with.

Perhaps it is having to be on an almost constant crisis footing that has helped Wal-Mart set the standard for dealing with a major natural disaster. Its comprehensive and well coordinated response to Hurricane Katrina made FEMA seem downright amateurish, leading many to conclude that the Federal and State governments could learn a lot from Wal-Mart on how to prepare and deal with the next big one. The Suburban Emergency Management Project provides an incisive review of the breadth and scope of Wal-Mart emergency preparedness resources, procedures and personnel along with the actions it took before, during and after Katrina.

The devastating earthquake and tsunami in Japan, showed that Wal-Mart can do crisis response on a global scale. As The Wall Street Journal points out in a fascinating article, Wal-Mart’s Arkansas-based emergency response team quickly sprang into action after the quake struck and coordinated with its operations in Hong Kong and leadership in Japan to issue alerts and updates to employees, seek accounts on the safety of all its employees and begin distributing relief supplies at its stores and myriad locations across Japan. The WSJ story also shows the diligence and creativity of Wal-Mart employees throughout Japan, the region and back in the US in delivering relief, disseminating information and ascertaining the well-being of its employees.

While few companies have the need or capabilities to build the crisis response infrastructure of Wal-Mart, all organizations should look at how the folks from Bentonville do it to understand the importance of being prepared with the right plan, tested procedures and dedicated people in place to manage a crisis. As Wal-Mart knows, your business and reputation depend on it.

rtauberman Crisis Communications Employee Discrimination, FEMA, Supreme Court, Wal-Mart

Einstein defined insanity as repeating the same actions, but expecting a different outcome. If that is true, insanity rules the day when it comes to crisis response.

We all know that the effectiveness of advertising is in a free fall. Yet I keep seeing articles about how companies are responding to crisis issues – from Taco Bell to BP – that are focused on their advertising. Who needs to up their Super Bowl spend. Who needs to launch a campaign. Who is fighting back with advertising.

While an ad campaign can create “air cover” and help unify a story, when it comes to crisis response, advertising alone is about as effective as hiding under a rock. It is expensive, slow and ranges from irrelevant to untrustworthy among your key constituencies, who pretty much discredit it before the spot is even over. Sometimes, it can be a catalyst for something really interesting, like Toyota’s ads for their Ideas for Good campaign, which actually sent me to their website to learn more.

So why do people still rely on advertising so heavily? Because it is safe, and controllable. You design the ad, you control the message. No one ever gets fired for recommending a full page ad or a TV spot. And when a CEO is demanding, we do more…we can buy more of it.

Insanity. But safe insanity.

cwinters Crisis Communications advertising, BP, Super Bowl, Taco Bell, Toyota

For Johnson & Johnson CEO William Weldon, 2010 was, as Queen Elizabeth put it a few years back, an “annus horribilus.” The Company’s various divisions issued a seeming never ending string of recall notices from pain relievers to cold remedies to contact lens solution to antacids. J&J’s McNeil Consumer Healthcare division, makers of Tylenol, Sudafed and Benadryl captured headlines throughout the year with a series of problems at its facilities.

Through a series of public relations fumbles, belated mea culpas and operational gaffes, J&J, a consumer healthcare icon, whose 1980s Tylenol tampering response was widely seen as the crisis communication gold standard, has seen its reputation significantly tarnished and its sales plummet. Generics and store brands from CVS, Walgreens and Rite Aid have never had it so good.

This track record garnered for Mr. Weldon a place next to the likes of BP’s Tony Hayward and HP’s Mark Hurd a place on list of the worst CEOs of 2010 by Sydney Finkelstein, the Steven Roth Professor of Management at the Tuck School of Business at Dartmouth as reported by CNBC.

Unfortunately, it appears that 2011 is starting right where 2010 left off for J&J as the company issued its latest recall of 43 million bottles of Tylenol, Sudafed, Benadryl and Sinutab manufactured at McNeil’s now infamous Fort Washington, PA plant. Using a time-worn public relations ploy, the news of the recall was released on a Friday evening prior to a long holiday weekend. Mr. Weldon, once again spoke of action plans, quality reviews and commitment to consumer safety.

For those of us in crisis communications who know all too well how reputation is tied to a company’s proactive, transparent and thoughtful response, it is sad to see what has become of J&J. The blogosphere is once again full of chatter with reminiscences of J&J’s gloried past, recollections of its expert management or previous crises and calls for executive changes long overdue.

This past weekend also brought news of another medical leave to be taken by Apple CEO Steve Jobs. The issues of Apple’s history of communications or non-communications about Mr. Jobs’ illness and succession planning at the Company are fodder for another blog post. This latest episode and the quick hit to Apple’s stock price shows the close relationship between corporate and executive reputation at Apple and what may happen with the Company’s visionary leader on the sideline. Conversely, for J&J and Mr. Weldon the reputational issue may be a CEO staying too long in a position.

rtauberman Crisis Communications Apple, BP, CVS, HP, Johnson & Johnson, Rite Aid, Steve Jobs, Tylenol, Walgreens

One of the most difficult decisions in a crisis situation is determining when to speak and when to stay silent.  (There are plenty of great examples of how companies communicate well during a crisis, but it’s not so easy to find ones in which silence was a good strategy. (I generally cite the recent JetBlue / Slater incident.)

Equally difficult is the question of when to stay the course on a decision, and when to pull the plug.  In short, how much bad publicity is enough to force you to change what you do or how you do it?

Recent days and weeks have been loaded with strategy switches and plug-pulling decisions.  The Kardashian Sisters decided that a branded, pre-paid debit card just wasn’t for them.   Four Loko announced it would remove the caffeine from its popular alco-pop beverages in response to public outcry about the caffeine-alcohol combination. And perhaps most notably, the public boasting of a con-man who gamed Google, the credit card companies and countless consumers, causing Google to change its ranking analytics and explain itself to the world.

So how much bad publicity is too much bad publicity? When do you cross the threshold that prompts you to change in your operations, policies or processes? The simple answer:  When the cause of the publicity, and not the publicity itself, can inflict ongoing damage your company’s reputation.

Sometimes you can ride out negative coverage of a single incident – this too will eventually pass.  But when the policy or process actually causes the negativity and will continue to do so, action is needed. If you find yourself in this situation, ask the following questions:

• Does the issue in question invite regulatory or legal intervention?
• Was it a decision made for a good reason, with the unintended consequence of disrupting, confusing or otherwise harming customers?
• Does your commitment to this one thing have the potential to damage other areas of your business?
• Is the upside too small to be worth the risk?
• Are questions about this issue leading to more fundamental questions about your business practices, management capabilities, governance, transparency or other big areas of reputational risk?
• Are your employees expressing concern about it?
• Is there a relatively easy change that can eliminate the problem while enabling the original business objective or benefit?

Answer yes to any of these questions and you should be evaluating options, including making a change.  Sometimes, seemingly good decisions have negative unintended consequences. Acting quickly, owning the problem and communicating the solution without being defensive can do more than nip a crisis in the bud; it can make you the hero, and actually increase and enhance your reputation among your stakeholders.

cwinters Crisis Communications

Consider Toyota, the brand that became synonymous with the word “recall” in recent years. Toyota seems destined to be the poster child for reputation destruction and the subject of cases studies that will be taught for years to come in college PR courses. First, they denied the problems. Then they apologized – well, sort of. And then they apologized some more. They launched campaigns about safety and trotted out customer testimonials.

And none of it was particularly effective. So what now? Toyota is changing the subject.

Exhibit A is the Ideas for Good commercial about Toyota technology and football? The spot I saw features a Mom, talking about how she feels just a little less worried about her son playing football, thanks to Toyota sharing its technology.

The dangers of football have been top of mind for parents and sports fans after the tragic paralysis of the Rutgers special teams player during an apparent routine kick return, plus the recent spate of impact-related head injuries in the NFL.

As a rabid sports Mom who has made those trips to the ER with kids with concussions, the Toyota commercial grabbed my attention, so much so that I stopped doing dishes and came into the family room to watch. Then my PR persona kicked in and I wanted to learn more about this campaign, which ranges from using Toyota technology to improve NASCAR safety to employing LEED building techniques to preserve Yellowstone Park’s pristine beauty. Toyota also is asking the public to submit ideas for new ways to use its technology for the good of the world.

Is Ideas for Good a good idea?

Well, considering that Toyota is mired in a seemingly endless stream of bad news – the company announced yet another recall last month, the strategy of finding a way to play offense is a good one. Focusing on how Toyota is helping the world is smart, regardless of whether the beneficiaries are driving Toyotas or not. It shifts the conversation from the defensive position taken by Toyota loyalists defending the brand to a conversation befitting the leader that Toyota once was and presumably want to be again.
On paper, a textbook formula for reputation recovery looks like this:

At the appropriate time, stop apologizing – check.

Move beyond your self-centered conversation – check.

Engage your stakeholders for collaboration to benefit someone besides yourself – check.

Will Toyota succeed in moving beyond the recall overhang? Some of that depends on when and if the recalls finally end. Even then, only time will tell. But I give them an A for effort.

cwinters Crisis Communications NASCAR, Rutgers, Technology, Toyota

As we mark the five-year anniversary of Hurricane Katrina, another tragic event just occurred off the shore of Louisiana – an oil rig owned by Mariner Energy exploded earlier today in the Gulf of Mexico several hundred miles west of the site of BP’s infamous Deepwater Horizon disaster.

The people of Louisiana have had more than their share of tragedy. For the families of the 13 people on the rig (thankfully, all accounted for based on news reports), this raises questions about worker safety that are tailor-made for union organizing.

So why does an explosion at a rig owned by Mariner Energy spell trouble for BP, which has spent nearly $100MM on advertising in an effort to repair its reputation since the explosion?

It’s simple – BP has become the face and acronym of BIG PETROLEUM.

Today’s explosion creates a legitimate argument for President Obama’s drilling moratorium and increased discussion of regulation … but who really cares about Mariner Energy besides The Apache Corp., its owner? If you read John Grisham’s novels you know that it is the big-name, big-money entity that gets targeted.

Every news story will rehash the BP events. Every call for regulation and investigation will cost them. And every energy company will cite BP for decreases in sector valuation.

Conventional public relations wisdom says today’s event will get BP out of the news and off the hot seat. But I’m betting against the house on that one.

cwinters Crisis Communications Apache Corp., BP, Hurricane Katrina, John Grisham, Mariner Energy, President Obama