Be prepared for Crisis, always ‘ante portas’
Be prepared for Crisis, always ‘ante portas’. When we were preparing the “Crisis Preparedness Workshop”, we’ve measured all the corporate crisis reported in media. The list has 200 corporate crisis within the last 8 years in the US and E.U!! Siemens, Whole Foods, Novartis, Uber, VW, Chipotle, Fifa, Starbucks, Facebook-Analytica, Halifax, Google. The list is long.
Be prepared for Crisis, always ‘ante portas’
A few days ago, a Greek batteries’ factory was on fire. A well-respected company. Suddenly, all stakeholders turned their attention to the company. Local communities, media, authorities and policymakers. Meetings, official announcements, reactive statements on environmental protection, toxic waste, health and safety, employees, operations shut-down, and many more issues. Far away from the company’s value, history and heritage, and how good they are…
If you google “crisis, cases” you’ll see thousands of examples of quotes, hard-facts, studies, crisis response cases …and tension. But most probably if you ask a CEO to prepare his units for a crisis, you will get a response like “it can’t happen to us; we have more pressing matters to attend“. Even multinationals expect to get support from the HQ, only when some issue occurs.
But what is the real cost of ‘investing’ few hours and resources to be crisis-ready? Is it corporate arrogance, or pure incompetence to prepare proactively for business continuity and perception risks?
Crisis? Google it…
The Siemens case was estimated at a direct cost of $2,2 billion. The VW emissions’ scandal retracted back some million cars. The food giants in the US pay constantly fines when accused of their product ingredients, or for their employee policies. Even a local rotisserie in my hometown is against customers who happened to visit its kitchen… Yes, I know “it can’t happen to us…“.
The Uber lost its London license. Google was accused of its autonomous car-crash (to a school bus) and then for tax evasion in many EU countries. Consumer rights against company practices skyrocket in the Ombudsman’s list in almost every European country. I know, “it can’t happen to us…“.
When we were preparing the “Crisis Preparedness Workshop” back in Nov. 2017, we’ve measured all the corporate crisis reported in media. Can you picture this? The list has 200 corporate crisis within the last 8 years in the US and E.U.!!! Siemens, Whole Foods, Novartis, Uber, VW, Chipotle, Fifa, Starbucks, Facebook-Analytica, OTT revenue, Halifax, Google. Long list.
Crisis in paedophilia, data, and channels
YouTube has taken the heat off the Facebook-Analytica data crisis, thanks to revelations it is still running adverts on video channels promoting paedophilia, white nationalists and North Korean propaganda. Overnight, same day, an investigation by CNN claimed that advertising for 300 companies including retailers, tech giants, newspapers and government agencies had been running on extremist video channels.
Crisis for Wi-Fi on-plane
Virgin America was the first to offer onboard Wi-Fi in 2008. No one could predict that the day would come when an aviation emergency would be broadcasted live, as Facebook live, real-time by a passenger. On April 17, 2018, a passenger on Southwest Airlines Flight 1380 broadcasted what he thought was his final goodbyes after an explosive decompression on the aircraft.
“Something is wrong with our plane… we are going down!” shouted passenger Marty Martinez through his oxygen mask in a live stream seen by just a handful of followers at the time, but has since been shared/viewed more than 540,000 times within the next 24 hours. Tragically, a woman was killed, making this the first fatal event on a U.S. airline.
Search and you’ll get amazed. The many airline crisis cases have sparked a global initiative by the International Air Transport Association (IATA) to redefine and codify “best practices” in aviation crisis communications for the digital age.
Crisis in Governments, welfare, and politics
Back in 2016, Donald Trump Jr. within the presidential campaign tweeted out a meme that compared a bowl of skittles to Syrian refugees (he subsequently deleted the tweet; on your right is a screenshot.)
The next day, Skittles responded in a public statement: “Skittles are candy. Refugees are people. We don’t feel it’s an appropriate analogy. We will respectfully refrain from further commentary as anything we say could be misinterpreted as marketing.”
Since British PM Theresa May put her country on the path toward a “hard” Brexit, facts on the ground have repeatedly forced her to scale back ambitions and make concessions to the E.U.
She continues to muddle through, making Brexit kind of a crisis-management plan towards lobbies, enterprises, consumers, EU students, travellers, financial markets, banks and …voters!
Greek government faced in 2017 the Crisis management failure: Athens’ Riviera oil-spill and later on in the same year, they failed on infrastructure and civil protection and infrastructure set up to tackle floods in the Attica region, leading to 22 people dead.
Crisis for Brands that put themselves in the political debate
When Donald Trump offended women with negative associations, the Tic Tac brand felt compelled to issue a statement (or intrigued to get more shares, likes, and RT’s?) that not only clarified Tic Tac’s brand beliefs but appeared to judge Trump himself as well: “Tic Tac respects all women. We find the recent statements and behaviour completely inappropriate and unacceptable.”
Tic Tac respects all women. We find the recent statements and behavior completely inappropriate and unacceptable.
— Tic Tac USA (@TicTacUSA) October 8, 2016
The word Crisis suggests something that happens infrequently. But crises have become a regular state of affairs. Brands have found themselves embroiled in controversy. And those that deal with PR challenges regularly have still been caught off guard by a customer insurgency. Some crises disappear quickly and others never seem to go away.
In Crisis, everyone looks to the CEO
Facebook-Analytica is the latest example of a “PR disaster”. The term usually means that whatever the facts of the matter are, the company’s CEO fails to communicate convincingly about a crisis, sincerely and in a timely manner. Mark Zuckerberg issued a statement using “corporate speak” and online communities demanded apologies for a) FB knowing the issue for two years, b) what they will do in the future for data protection.
When something goes badly wrong for a company in public, all eyes look to its leader. When the CEO is absent, or hides, or has nothing to say, or fails to respond then the information vacuum is instantly filled by naysayers whose voices become a chorus of condemnation on social media.
In most cases, the failure is on leadership communication. Failure by the CEO to attach more importance to corporate communication and listen to PR professionals. With digital technologies firmly entrenched, the role of the CEO in corporate communication has never been more essential.
There can be no doubt that social media has made PR more crucial for companies than ever before. Nanos Research conducted a poll in 2017 asking Canadians: “Do you think that with the rise of social media, public relations, also known as PR, is becoming more important, less important or as important for organizations today compared to 10 years ago?” The 76% said that PR is now “more important.” and the 70% answered: “Acknowledge the problem and communicate on social media.”
A CEO singing in the middle of a Merger?
Sainsbury’s is in the middle of a merger with Asda. 12 billion value. Important evolution. Thousands of stores, consumers, partners, importers working with the brands. Fame and reputation should be intact. Sainsbury’s CEO, Mike Coupe, has been filmed singing and humming “We’re in the Money” while waiting for an ITV News interview.
ITV New released the clip and it became viral. We can discuss for long if it was a right practice from the media house, but the thing isn’t funny for the CEO.
The media titles were “Astonishing moment Sainsbury’s CEO sings ‘We’re in the money’ in front of TV cameras as he awaits interview to discuss his firm’s merger with Asda“. Mr. Coupe apologized for offending anyone and said he was trying to compose himself and that the song was an unfortunate choice.
If you have a 12 billion deal at stake, before government and regulators’ approval, and media reporting on the brands and the story …how irresponsible, immature and unprepared executive can you be, to turn the attention away from the deal, and the two brands?
Crisis incidents will intensify
- We go through a major global transformation: societal changes, global mobility, tougher standards
- The product, quality, ingredients, safety, consumer, prices, practices
- Companies scaling global offerings must comply with local legislation (not always the case…)
- Unprepared companies, un-audited operations and risks (factories, data, IT, warehousing etc)
- Political leadership, tougher regulation, rules for global sustainability
- Terrorist attacks, natural disasters, security and cyber-crime
- People and true ethics are back on the agenda
- Diversity, sexual harassment, HR policies, welfare, workplace issues, awful practices
- Media scrutiny, backed by an insight of worthy causes, social justice, inquisitive journalism etc.
If your company is like many organizations, then there are great risks that may be leaving your brand unnecessarily exposed. Primarily, your own company operations. Customer service, product faults, regulation, health & safety, energy footprint, social contribution, network outages, failed delivery, security, data privacy, and financial aspects of what your company does. Everything can turn to be a major crisis incident. Allegations, complaints, attacks, and negative stories on media.
Companies will never again have control over perceptions
Communities are talking about companies, policies, experiences, prices, complains, and evaluate if you stand true to any brand promise. Consumers can become very cynical about flight attendants, bank cashiers, rude customer service staff in-shop while always compare competitors. Companies will never “control” or “direct” perceptions in the open, peer-to-peer economy. Have you ever really thought how big this change is? No more paid media or native (paid) content to “contain the story”.
CEOs, University Presidents, Directors of Boards, Team leaders must openly engage their communications team and be Crisis-ready – not when the story goes public.
It takes 20 years to build a reputation and five minutes to ruin it
Download the Borrow My brain free Crisis e-Book
This e-Book has been written with the purpose of equipping C-level teams, senior Communicators, and Marketers with some angle-views and tips on preparing and stay alert for upcoming crisis incidents.
For Crisis-ready, you need top-Management’s ‘buy-in’
To prepare for the crisis means that you have an agile counter-response activation. You need top management’s ‘buy-in’. If they don’t believe in it, or if they don’t see risks, then sit and wait, and who knows you can be lucky. There are several common reasons behind the resistance that many companies show when one tries to convince them to be crisis ready.
- Management wrongfully believes that the old ways of managing crises still apply (paid media…)
- The Managers’ team feels immune to crises (wrongly judging how big or successful the company is)
- Certain departments (e.g.: legal) have a hard time releasing the reins and being open to the need to be proactive and communicate in a timely fashion in times of crisis
- Sadly egos and fear win, and company’s communication teams get ignored.
Companies must treat the communications for issues and crisis management, in the same manner, they so with the IT department to prepare for a cyber-attack or operations experts to be ready for a natural disaster. PR professionals are the crucial team members who ask the tough questions, dig deep into the issue for the truth, inspect the situation from every reputation angle and help the brand communicate the facts while protecting reputation.
CEO is the Confidence & Trust channel
The CEO should be personally involved in the Corporate communications effort, and personally drive the Crisis Preparedness state in the company, securing shareholders and stakeholders interests, while preventing PR disasters. I believe that almost all crisis situations can now be intercepted and successfully addressed with these elements of leadership communication:
- The CEO is present on social media with an active account (ideally on Twitter where media hang-out)
- Transparently discloses what’s happening on trending crisis so that people hear the news first from the company’s leader (and not from other (no-trusted?) sources)
- The leader clearly describes what the company is doing about it
- Sincerely apologizes and takes leadership responsibility
- Ensures that media coverage and social sentiment is based on accurate info and statements
Regulators will intervene more
Back in time, every company’s local executive team was treating the crisis as something that can impact the main Brand…the HQ. It’s no longer true! With the global treaties at hand, with the loud voice of communities over social media, and regulators under pressure to scrutinize company operations, you can’t be reactive.
Googling for crisis’ cases, we’ve found even news from the Chinese green regulator (imagine, even in China where news are controlled to some extent, nothing can be ‘contained’) who called-off 151 coal power plants (good for them and the planet…), an investment plan of 80 billion!
End-note, you can’t pick your crisis
The first thing to know is that you need to expect the unexpected. “Rule Number 1,” according to Jamie Moldafsky, CMO of Wells Fargo, “is that you don’t get to pick your crisis. You have to be ready.”
Is your company ready to tackle business continuity and perception risks?
Tasos Pagakis is a Crisis communications expert within Telecoms, Energy, Pharma, Financial, and FMCG. Has participated in 8 company Merger & acquisitions. Worked for 42 ‘heavy-lift’ crisis including death by accident, Telco radiation, Company restructuring, Petroleum pipeline, Bribery allegations, Security systems, Food contamination, Network outage, Factory-river pollution, Consumer rights etc. As of 2016, he facilitates Crisis Preparedness Workshops for Companies and Authorities.