Recession and crisis communications


The way a company responds to a crisis makes all the difference and it’s crucial for executives to learn how to keep their brand strong as the recession persists.  Bad things can happen to good businesses but you control how you respond

A story by Laura Williams-Tracy in the Charlotte Business Journal notes that one smaller local bank is protecting its brand well by marketing aggressively with a believable message as opposed to the lower-key approach of Bank of America Corp. and its chief executive, Kenneth Lewis.

Lewis made two large purchases of BofA’s stock in late January and early February, investing more than $2 million in the bank. Presumably, he was demonstrating his confidence in BofA. But when reporters asked a company spokesman about the CEO’s actions, the response was “no comment.”

Michael Cherenson, chairman of Public Relations Society of America said “Maybe the banks are concerned that the truth would be more damaging to their reputation,” he adds. “But a communications void will be filled with misinformation.”

Getting a company’s message through is the chief goal of crisis communication. The task is to express that message clearly to an audience that includes employees, the news media, customers and investors.

What’s unique here is that the economy isn’t a one-time event.  Most crises are catastrophic but brief, and then life goes on.  The U.S. and global recession is a long-term problem that will require long-term solutions and transparent communication.

The objective is to build trust — not to spin bad news.  Companies can build and bank some of that trust before a crisis occurs.

One executive said, “When you hit crisis mode, more often than not it’s too late to figure out what your brand promise is. It’s not the time to start saying who we are and what we stand for.”

Even if a company has built good will and enjoys a favorable reputation, it can lose those advantages quickly if it handles bad news poorly.

Most experts give Peanut Corporation of America low marks for its public communication after it was linked to salmonella-related deaths from tainted peanuts.

The company’s CEO appeared before Congress with his arms crossed and refused to answer questions for fear of self-incrimination. Days later, the company filed for bankruptcy.

One practitioner pointed out that, “Successful companies have that ability to take the legal concerns and still operate on basic principles. Good lawyers understand that the brand and company name is valuable and must be saved.”

Successful businesses also know how to tell employees when things aren’t going well. History shows that company performance frequently drops after a round of layoffs that were intended to improve profitability. If you don’t manage moral and build the trust and confidence of the people who are left you may have gained nothing.    


Present better

 Ran across a story by James Duncan Davidson about making better presentations that I thought you’d like.  Paraphrasing:  

Deliver your speech to the crowd, not the screen. How many times have you seen speakers spend all of their time talking to either the left or right side of the room and never addressed the audience. Your slides aren’t the recipient of your presentation. Your audience is. Face them. Address them.

Pick a spot and stay. Move deliberately to another. Don’t pace aimlessly. And please don’t turn all the way around. I know that I’m often guilty of this one — back and forth, never resting.  Sometimes, speakers will go so far as to turn their back on the audience as they shift direction. This says to everyone in the room that you feel trapped and don’t want to be there.  And, if you’re telling the audience that you don’t want to be there with your body language, you’re not helping your words get through.

Take off your name tag while on the stage. You look kind of goofy with a dork tag hanging around your neck.

If you don’t make eye contact with your audience, you make it harder for them to connect to your message. If you pick a few people in various places of the audience and lock eyes with them, everyone else around them will feel that. If it helps, you can lock eyes with friendly people that you know in the audience. If you don’t have any friends, make some by talking to a few people before you go up on stage.

The corner of the stage is darker than rest of stage. Stay in the lit part of the stage so that they can see you more easily. And, unless there’s a follow spotlight on you, don’t jump off and wander up and down the aisles. It’s a lot less cool when you don’t have a spotlight on you.

If it’s being videotaped, all of this matters 10x more.

Rule of thumb for speaker clothing: Dress like you mean it. ~0 to 1 levels above mean “nice” for audience. Be comfortable on stage but don’t look like a slob up there. If you’re talking to suits, don’t show up in a t-shirt. On the other hand, don’t show up in a tux for a technical conference. Know your audience and dress like them or one step up.

When you’re on a panel, don’t look at your shoes, look at the other speaker otherwise you look bored even if you’re not. We’ve all seen photos of speaker panelists who look like they’re sleeping or bored up there even if they’re not. Be engaged in the subject and pay attention to the speaker, you’ll look better up there.  Smarter, even.


Say you’re sorry

One thing that we talk about with our clients who deal with angry customers, groups or citizens, is the power of simply apologizing when you screw up.  That’s often tough for their lawyers to swallow and we have to explain that an apology doesn’t have to be some admission of guilt.  


Found an interesting op-ed from the Philadelphia Inquirer originally penned by Stuart H. Shapiro, which we paraphrased here:

One of the first lessons parents teach their children is to say “I’m sorry” when their actions cause hurt or an unintended consequence. We teach our kids to acknowledge their mistakes, not run from them.

Yet, for decades, lawyers and insurers have advised health-care professionals to “deny and defend” when an adverse situation arises, believing that apologies or expressions of empathy to patients and their relatives would lead to lawsuits, settlements, and ruined careers.

Pennsylvania is considering legislation that will permit medical professionals to acknowledge, express empathy for, and take ownership of unforeseen outcomes without the risk of litigation based on the apology.

The new law wouldn’t relieve doctors, hospitals, or nursing homes of liability, and it doesn’t prevent patients and families from filing lawsuits. It simply permits health-care professionals to communicate openly and honestly with patients and their families without fear that their statements will be used against them in court.

Numerous studies have shown that anger – not greed – is the driving force behind most medical-malpractice suits. Patients and families are justifiably frustrated when something goes wrong and a health-care provider fails to discuss it with them honestly. In one study, more than a third of those who filed suit said they would not have done so if they had been given an explanation and an apology.

Thirty-five states have passed similar legislation and not only have claims gone down, but customer-service ratings have skyrocketed.

At the University of Michigan Health System, claims and lawsuits dropped from 262 in 2001 to 83 in 2007. Costs for legal defense and claims have been cut by two-thirds, and the time spent resolving cases has been halved.

At the University of Illinois Medical Center, malpractice filings dropped by half and, in the 37 cases in which the hospital acknowledged a preventable error and apologized, only one patient has filed suit.

In states with apology legislation, medical mistakes have become teaching opportunities, not potential cover-ups. It allows medical professionals to talk to patients about what went wrong and why. In those cases in which a lawsuit was filed anyway, settlements were often agreed upon in months rather than years. And families and health-care professionals say they are able to heal sooner and move on with their lives.


Rethinking Think Tanks
Source: Politico.com, February 3, 2009

Fueled by tax-deductible donations and an explosion in philanthropic assets, think tanks have dramatically grown in size and influence during the past 100 years,” writes J.H. Snider, himself a think tank fellow. “U.S. think tanks increased in number from eight in 1910 to 98 in 1960 and 1,106 in 2006. … Despite think tanks’ billions of dollars of tax subsidies and considerable power, they have received minimal public scrutiny and are often poorly understood.” Think tanks should establish ethical guidelines specifying “what types of lobbying, plagiarism and donor promises will be publicly disclosed or banned,” Snider suggests. Think tanks should also be required to disclose their donors, as do “lobbyists and political candidates,” and acknowledge “ethical conflicts.” In addition, “the media should do a better job covering think tanks,” especially around “think tanks’ revolving door with government, functioning in orchestrated lobbying campaigns and claiming credit for others’ work.”


Rebuilding Trust in Business
A condensed version of a story by Bronwyn Fryer in Harvard Business Review:
Wall Street lies in metaphorical rubble. The “Greatest Banker Who Ever Lived,” Alan Greenspan, says he misunderstood market mechanics. Jack Welch says focusing on share price was a dumb idea. The Future of Capitalism is itself in question.

When the business pages make no sense, it’s time to turn to a philosopher. Charles Handy, vicar’s son-turned-oilman-turned-business-school-professor-turned philosopher, has raised many questions and made many accurate prognostications about the future of business.

Consider what he said, post-Enron, about the erosion of trust. “Markets rely on rules and laws, but those rules and laws in turn depend on truth and trust. Conceal truth or erode trust, and the game becomes so unreliable that no one will want to play,” Handy wrote in “What’s a Business For”  (December 2002). “The markets will empty and share prices will collapse, as ordinary people find other places to put their money–into their houses, maybe, or under their beds. The great virtue of capitalism, that it provides a way for the savings of society to be used for the creation of wealth–will have been eroded. So we will be left to rely increasingly on governments for the creation of our wealth, something that they have always been conspicuously bad at doing…..Trust is fragile. Like a piece of china, once cracked it is never quite the same. And people’s trust in business, and those who lead it, is today cracking.”

So what does the future of the organization look like? In one of his very first books, Gods of Management: the Changing World of Organizations, Handy advanced the idea that the best organization operates most like a village–a place where people equally contribute their skills for the good of the whole, where culture matters most, where the initiative is bottom-up, where the shareholders are the people who do the work. “Villages are small and personal, and their inhabitants have names, characters and personalities,” he wrote. “What more appropriate concept on which to base our institutions of the future than on the ancient organizational social unit whose flexibility and strength sustained human society through millennia?”


Pimples and perpetrators


A housing development in Great Britain installed pink lights that highlight zits to stop kids from gathering and causing problems.


A recent BBC story said the homeowners association bought the lights to curb anti-social behavior. The lights supposedly have a calming influence, but they also highlight skin blemishes.


The National Youth Agency said, “They have a right to congregate, it’s part of being a teenager and most young people are good, law-abiding people.”


The lights have been installed in three underpasses on the area. Tony Gelsthorpe, chairman of the Association, said the lights were important for the residents. “We’ve had problems with underage drinking, drug dealing, anti-social behavior and general intimidation.

“I was a little bit dubious about the pink lights at first but it’s done the trick.” 


One of the best parts of parenthood is embarrassing your kids, who knew it was a crime-fighting technique!?





Get better

The International Association for Public Participation (IAP2) Certificate course – the best fundamental public involvement training on the planet – will be offered in Austin April 20 – May1, L.A. May 4 – 8, Houston May 11-15, Columbus June 1-5, Philadelphia June 15-19, and Boston July 13-15.  Call or email me for more information.

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