Archive for the ‘crisis management’ Category

“Ceci n’est pas une pipe”

June 6, 2013

In the great hall of mirrors that is corporate communications, addressing issues raised by government court orders whose contents you can’t disclose and whose existence you can’t acknowledge represents a high degree of difficulty.  Imagine you are in receipt of such a court order which has become the subject of widespread public controversy and you wish to be heard on the subject without violating the law.  What would you do?  In this age of social media, you have some interesting options, including the one chosen by a company we will not name which tweeted out to the world an internal memorandum addressed to employees which said in part: “The alleged court order that [Newspaper Y] published on its website contains language that:

  • Compels [Company X] to respond
  • Forbids [Company X] from revealing the order’s existence
  • Excludes from production the “content of any communication…..or the name, address, or financial information of any subscriber or customer.”

…if [Company X] were to receive such an order, we would be required to comply.”

A good effort in which every word has been scrubbed within an inch of its life.  We could quibble with “alleged court order.”  Unless the company is suggesting the document published by the newspaper is a forgery this should surely read “the court order, whose existence we can neither confirm nor deny…”  In the last sentence we would also prefer “if [Company X] had received such an order…” but this is a mere bag of shells.  We can continue this discussion on April 12, 2038 when the alleged court order may be made public.

Jackboots on the Forklifts

February 19, 2013

Let us spare a thought today for poor Amazon as it lurches forward from perhaps the most out-of-left-field crisis of the decade. According to The New York Times, the company has now severed its ties to the security firm it had hired to protect its warehouses in Germany who, it was disclosed, had, at the very least, a predilection for Neo Nazi outerwear. One could raise the question whether anyone at Amazon thought it odd that the security firm’s name in acronym spells out H.E.S.S., the name of Hitler’s deputy, but to us, this crisis is an object lesson in the futility of crisis “playbooks.” We award a golden pompom to anyone who could have predicted that such an event might befall Amazon which is precisely why lengthy crisis playbooks that purport to spell out what to do in any eventuality are relatively useless. By all means, have prepared language for the most likely problems but the best practitioners focus on the process more than the content. If you can get the right team on the line quickly and effectively you will have accomplished more than will be found in any playbook no matter how extensive.

Data Exhaust

May 21, 2012

The initial public offering of Facebook last week has prompted discussion of how the company will  justify its behemoth stock market valuation over the long term.  In a canny, but apparently unrelated move, GM announced that it no longer considered the cost of advertising on Facebook justifiable.  The piquancy of this announcement was muted somewhat when the auto manufacturer also disclosed that it would not be advertising on the 20123 Superbowl but the question nonetheless remains: why would hundreds of millions of people voluntarily surrender their right of ownership in their own data production to Mark Zuckerberg?  Daily, exabytes of so-called data exhaust stream out of the tailpipe of human interaction to be sold to advertisers in a bizarre form of metaphysical carbon capture.  Is it conceivable that individuals will some day be able to extract  a fee from Facebook for the right to monetize their emotional waste?  Or will we see the establishment of a Facebook-type utility in which users agree to mutually pool their data exhaust and sell it directly to advertisers, effectively dis-intermediating MZ?  Arguably, managing their data exhaust is something people are willing to job out to Facebook for now, but it  might take only a few highly visible data outrages for them to change their minds.  Facebook and its advertisers will need to be more vigilant than they have been so far to ensure that this data exhaust doesn’t create a smog of privacy violations that people refuse to tolerate.  Perhaps, even today, someone somewhere is writing the data equivalent of “Silent Spring.”

The Costa Concordia and Fact-based Crisis Response

January 20, 2012

The evolving story of the ill-fated Costa Concordia is an almost casebook illustration of the dangers in crisis response of rushing to place an interpretation on  a murky situation too quickly.  It may well be that the “hero/villain” narrative  elevating the Coastguard captain and demonizing Captain Schettino turns out to be correct.  However, the emergence of conflicting data about the pattern of Costa Cruise ships route deviations suggests that much has yet to be learned that may not reflect so well on the company, as FT.com suggests today (“Focus Shifts from Ship’s Captain to Company”).  It can be very stressful to withhold judgment in these circumstances but it is critical in order not to box oneself  into a corner.

By contrast, some steps in crisis response should be undertaken without delay even before all the facts are known.  In this spirit, it was much better news that  the parent company Carnival is launching a “stem to stern” audit of all its safety and emergency practices for every one of its cruise lines.  This makes emotional and psychological sense and represents a logical human response to the fear and pain people feel in response to such a crisis, irrespective of the cause ultimately determined.

My Boss is a Sadistic Cockroach

December 6, 2011

The National Labor Relations Board has recently begun warning employers that restrictions on employee use of social media may violate labor laws for both union and non-union employees.  This is because the 1935 Wagner Act generally protects the right of employees to talk to each other to discuss employer conduct, wages and working conditions, so-called “concerted activity.”  According to legal experts cited in yesterday’s Wall Street Journal, name-calling plain and simple probably isn’t protected, but more than a 100 employers have recently been accused of improper application of social media policies as it relates to employee comments online.  The NRLB has so far left a number of areas unclear such as the relevance of an employee posting a rant from a workplace computer, but it seems clear to us that this is another case in which employers need to be very cautious about censoring or firing employees for anti-company or anti-supervisor statements.  The NLRB may yet deem that a posting on Facebook by someone with workplace colleagues as friends constitutes de facto “concerted activity.”  This is just another area in which social media has opened up a new avenue for potential reputational damage and a further reason why handling your “talent” well has become a critical brand strategy.

We Are the J Students! We Are Proud!

August 19, 2011

Yesterday’s news brings yet another tale of unanticipated reputational threat arising from the terminally outsourced world in which we currently live. We can, I think, confidently say that the Hershey chocolate company never in its wildest imaginings considered the possibility that employing international students through a government program would become a “sweatshop” flash point as reported in today’s New York Times 

This most recent example of the networked enterprise focuses our attention once more on the critical need for employers to have transparency in their supply chain.  Many years ago, energy companies tried to argue that because the tanker truck in the freeway pile up was operated by a contractor, they bore no responsibility.  That argument didn’t wash then and any suggestion that a long outsourced HR supply chain absolves Hershey of responsibility for work performed to get its own product to the end customer would be equally wrong.  The vigilence is all, and having ordinary managers who can spot an obvious disconnect when they see one.

Hack Hacks Shutter Rag

July 8, 2011

The New York Times barely concealed glee at the misfortunes of News Corp. shouldn’t distract us from this rare example of crisis over-reaction. The negative response to the decision to shut down The News of the World, which may well have had iron-clad operational logic, demonstrates that in every crisis there is an irreducible narrative arc that must not be violated. In the context of the ongoing uncertainties about whose cell phone was hacked by whom, shutting the newspaper was akin to knocking off the key government witness prior to the trial. The News Corp.’s explanation for the decision was also a textbook non-explanation explanation. The New York Times called James Murdoch’s statements “a striking example of self-critical apology” but if all the key players, James Murdoch and Rebekah Brooks, among others, remain in place, this is an odd sort of self-criticism. Rather like the exquisite torture of business executives appearing before a Congressional committee in order to provide headlines for politicians, it is sometimes most effective simply to stand out in the withering fire until public interest begins to fade. By attempting to bring down the curtain prematurely, to mix metaphors, News Corp. has robbed the public and the politicos of their moment of hypocritical self-righteousness and it will assuredly not smooth things out for the BSkyB deal. The only effective brand recovery has to include publicly acknowledged learnings. Riding out of town in the dead of night makes this hard to do. There will be more twists and turns before the public has had its fill of this story.

Privacy as Competitive Advantage

May 23, 2011

The Sony Playstation imbroglio and the stealth campaign attempted by Facebook on Google have once again pointed up the critical sensitivity towards the issue of privacy. The astonishing fact that Apple felt the need to respond to allegations about geo-location data it was collecting suggests an acute consciousness of the reputational toxicity of privacy. Or, perhaps, it is merely recognition of the fact that each of these competing eco-systems occupy very similar turf and privacy could be the wedge issue that pushes customers terminally towards one player and away from another.
There are many conspiracy theorists willing to explain in great detail all of the nefarious things that companies want to with the data they have, but we have always been adherents to the view that inertia explains more than malice. To us, it looks almost as if it’s the effort involved in getting rid of the data that is getting companies into trouble rather a secret master plan to exploit it.
So we’d like to make a modest proposal that there is at least a possibility that there’s a business to be made in being the wired company that cares enough to purge responsibly, with a patented and fully transparent data cleanse system ™. Certainly, the race to the top in data cleansing would lol a lot more edifying than the sheepish mumbling about enhanced data privacy settings that is today’s standard response to each succeeding data revelation.

First Stupid, now Evil

April 28, 2011

We were happy to see the board of Berkshire Hathaway reverse itself in the matter of David Sokol’s disclosure about his acquisition of shares in Lubrizol because it neatly illustrates one of our core crisis management precepts.  This is that in the fog of swirling facts, conjectures and opinions surrounding a crisis, it is often helpful for a company to ask itself — is our explanation going to be that we were stupid (mistakes were made) or evil (someone can be blamed)?  This can then lead to an unemotional discussion of whether procedures need to be changed (no more mistakes) or whether someone can be fired (noisely or quietly) or a business unit closed or sold.  What is compelling about the B-H decision is that its original explanation was a botched attempt at explanation #1 — everything was legally OK, but we probably would behave differently in the future.  This flew completely in the face of our baseline of expectations about Warren Buffett as a man of impeccable rectitude with an aversion to obfuscation.  The audit committee report outlines in excruciating detail a timeline and pattern of events that enables the firm to convincingly switch to explanation #2.  We offer no opinion on whether this version of events is correct, but this looks like a good save, and probably a bit of luck.  Most companies in crisis trying to make this switch simply make matters worse by destroying their credibility.  Note to Renault: it is usually easier to go from stupid to evil than evil to stupid.

Malus Domestica

April 22, 2011

Well, how fitting that we now know what kind of Apple Steve Jobs runs — Northern Spy.  It makes very good pies, but does it make good public relations?  We’re prompted to ask this question because once again Apple has stayed true to its practice of not commenting with regard to allegations about its retention of data about IPhone users’ locations.  This is consistent with its previous posture re Steve Job’s state of health and questions about stock options.  The almost universal admiration of the company (some might call it adulation) in spite of this habit occasionally causes corporate communications practitioners to ask — “opacity seems to work for Apple.  Why shouldn’t I try it?”  The answer is not as simple as it might seem.  Some might say this posture has worked well for Apple, causing  past critical storylines to wither for lack of the oxygen provided by a company response.  However, it seems to us, that it requires a level of intestinal fortitude, the willingness to put up with high levels of negative speculation, that is realistically only available to a company like Apple.  Steve Jobs is truly one of a kind and arguably even titans such as Jack Welch, Lou Gerstner and Bill Gates would have had trouble pulling off this consistent silence.  The  great Warren Buffett himself will be hard pressed to say nothing about the resignation of David Sokol at his upcoming annual meeting even though he is unlikely to go beyond what he has said previously. So the lesson here seems to be that, for most companies, consistent and reasonable transparency is the safest posture.  Once again, we will have to leave pregnant silence to the man in the black turtleneck.