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Who Will Trust Your Organization In a Crisis?

Diane AboulafiaBy Diane Aboulafia, Principal, Great Work | Strategic Communications

Trust and transparency—two words tossed around often these days. Knowing who is telling the truth and whether they are telling the full truth is being challenged frequently, from the highest levels of our government, to the C-Suites across the country. Trust isn’t attached to a title. It’s built over time. When a crisis hits, is your organization ready? Will you be trusted?

Conducting a crisis assessment is critical in developing any plan

If your organization does not have a crisis communications plan in place, make it a top priority, starting with a crisis audit. Answer this question: What keeps your senior leadership team awake at night? Inventory and rank the responses. A recalled product or a plant fire are the types of high profile incidents that may top a list, but assessing smaller-scale actions like excessive employee turnover, or negative posts from former employees on a company review site, can portend a bigger labor relations issues.

I once did an audit for a mid-sized consumer product manufacturer whose senior managers raised concerns they had never voiced to the CEO or legal team. During the discussions it became apparent if left unaddressed these issues made the company vulnerable to regulatory or legal action. The issues were not life threatening and their probability of occurring was not immediate, but by addressing managers’ concerns as a business issue, the company resolved problems before they became a costly or high profile threat to the company’s reputation.

Candid interviews with managers are the first step in building an effective plan.  Organizations should also review their IT, HR and communications outreach policies. Are rules applied consistently across all departments?  Review employee networks, including social media to find out what workers really care about.

Most reputational crises don’t occur without warning, e.g. labor unrest, fraud, product recalls, are examples of problems that usually fester over time. Identify and rank your vulnerabilities, address as many as you can, and build detailed communications response procedures for crises that could occur.

Put everything on the table

Executing your audit and developing a plan are critical, but unless you practice and determine who works well under pressure, your organization remains vulnerable. You need to know you have the right team in place when the crisis hits. Will your established systems work? Do you have the right technology and tools to quickly reach stakeholders who could be impacted by an unexpected danger or business disruption? When a crisis occurs, companies often face the challenges of simultaneously responding to social media, television news crews, and worried shareholders.

Build a representative crisis team

Placing only C-Suite executive on a crisis team is risky. Organizations need team members who work directly with stakeholder audiences. This means representatives from HR, Legal, IT, and corporate communications. The team also needs culturally competent executives who provide the perspectives of different cultures and values, as well as members who represent various age and gender stakeholders. Additionally, the team should have trusted relationships within their most important communities—employees, customers, vendors, etc.  These resources can be influential supporters for an organization when it is placed in the spotlight of media or public scrutiny.

Prepare your CEO

One issue I’ve experienced as a consultant that is both surprising and problematic, is the thin-skinned nature of some CEOs. We live in an age where people expect transparency, and the arena for public discussion is less civil. These factors have created a perception that companies should tell all—which is not always possible—and critics can say absolutely anything, without referencing facts. A tweet, a post, an interview, an image; the channels are open and endless. Recently, I had a client who got pulled into taking a situation personally. His actions escalated an issue that could have been mitigated early. Instead it evolved into a crisis that portrayed the organization negatively and very publicly.

Companies and CEOs must show up and communicate in times of crisis. They have a responsibility to stakeholders and they need to explain their actions. Everyone understands when companies don’t have all the facts in a data breach, for example. But, if the CEO shows up with a plan, and continues to communicate as information becomes available, companies will be valued for consistency and integrity.  This type of leadership also attracts allies for the company.  Interestingly, research shows when people understand a CEO’s decisions and actions, they are less likely to initiate litigation against the company.

Choose your spokesperson carefully

There are times when the CEO may not be your best spokesperson. I worked with a national restaurant chain a few years ago, on an issue that involved a manager who left his store to break up a fight in a parking lot. There was gunfire, and the manager then returned to the store and locked up. However, the manager was fired based on the organization’s ‘no heroes’ policy, which stated his responsibility is to remain in the restaurant, lock up the door and call the police. The issue gained national attention and the fired employee appeared on a well-known, national talk show. The fast food chain was then given an opportunity to respond. The HR director served as spokesperson. She explained the company’s policy was designed to protect and save lives, apologized and informed the audience the company had offered the individual his job back. Her empathy during the interview won praise from the talk show host and demonstrated that an honest, sincere response can turn the tide of public opinion.

Ironically, a few years later this interview appeared on a program rerun in Asia. Video and search engines will always ensure that bad news doesn’t really disappear. Messengers, words and actions matter.

Balancing public need with company risk

Transparency is imperative. People expect companies to be more than profit making institutions. You must be forthcoming with information in times of crisis. People need to know. A lot of times it is perfectly acceptable to provide a minimal amount of information, if you can explain why you face constraints (e.g. investigation is underway, confidentiality laws must be protected, etc.) but in most cases, when in doubt, default to public need. A large insurance provider in the Pacific Northwest waited several weeks before sharing any information with its customers about a significant data breach. As a result, customers were unable to take steps to prevent identity theft, false income tax filings, and other harmful actions.

Sharing what you know when you know it enables companies to maintain trust with the people who are key to their success.

Learn from the best…and worst

I encourage companies to learn from those who manage a crisis well and those who don’t. One example of a company who took control of their story and didn’t allow it to be told for them is Apple. Last fall, presidential candidate Donald Trump called for a boycott of Apple until the technology giant helped the FBI break into the iPhone of one of the San Bernardino shooters. Apple got ahead of this issue early, sharing their reasoning about privacy and focusing on their customers. They were transparent and consistent with their actions and communicated directly to their customers. This approached tapped into the loyalty and support of those who purchase their products, giving no traction to Trump’s call for a boycott.

Last year, Wells Fargo violated both the rules of transparency and trust in its response to accusations that it forced employees to set up fake accounts to reach sales goals. No one in the bank got the story straight and there was no message consistency coming from multiple executives within the bank.  It also did not address the problem seriously. Initially, it blamed 5,300 employees who have been fired over the last several years for setting up the fake accounts. That was a lie. In fact, some employees were fired for refusing to set up fake accounts. None of the bank’s leadership took responsibility for the problem, and no one in leadership acted against dishonest staff.  Because of continued media criticism, the CEO John Stump finally resigned.  But the story continues. Customers are suing, and many large customers including, the city of Seattle, have closed their accounts.

Trust is earned

Trust is not granted, it’s earned. Although technology changes, the best management practices for managing a crisis remain the same. Because of the real-time nature of news and information, companies must adhere to providing as much transparency as possible. Successful crisis communication starts with good leadership, a focus on what is important to stakeholders and employees, providing a quality product or service, and maintaining consistency in the way organization’s conduct business. From there, it requires adherence to fundamental steps in building an effective crisis communications plan to ensure you remain trusted in bad times as well as good.

Diane Aboulafia is a Principal of Greatwork Strategic Communications in Seattle. For more than two decades, she has worked at the nexus of business, public policy and media to help companies and individuals build and protect their reputations.  She has lectured in the United States, Asia and Europe on corporate reputation management.

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