Monday, September 29, 2008

Current Financial Chaos Spotlights Ineffective Crisis Communications Planning

Bad news abounds. Banks are failing as in the case of WaMu. Lehman went bust. “Shotgun” mergers a la Bank of America’s recent takeover of Merrill Lynch have taken place. All at a dizzying pace. This has led me to wonder how prepared were our government officials and the managements of these companies to deal with these crisis situations? From where I sit, not very well.

Given the amount of money at their disposal it is inconceivable to think that those in charge of these entities could not have afforded to retain crisis communications specialists. If they did have access to such advisors, they probably weren’t used effectively. Often, bankers and investors can delude themselves into thinking that the good times will last forever, never planning for the inevitable downturn.

For nearly 30 years we have advised clients on how to navigate a crisis, many have been severe. Many of these clients did not have a crisis plan in place before coming to us. We prepare our clients for the worst case scenarios. We brainstorm with them and encourage them to think the unthinkable about every possible situation that could impact their businesses. Then we develop a plan. About half of what you need to navigate a crisis can be done well in advance of it hitting.

While I could fill pages with advice, I will offer a few helpful management tips:
  • Manage expectations – This might be too daunting a task given how rapidly things change in times of a crisis; however, communicating appropriate expectations about the degree of a problem on an ongoing basis will earn management a degree of credibility and speed the recovery process for the company’s reputation.

  • Know your stakeholders and rally the troops – Although it may be too late to build a relationship with key stakeholder groups once a crisis hits, it is not too late to reach out to them to reassure them and address their concerns. All stakeholders are important but employees are critical to the firm’s ability to weather the storm, therefore, special attention needs to be placed on employee communications during times of crisis.

  • Speak with “one voice” to all stakeholders – Simplicity, clarity and frequency are the name of the game here. Companies benefit from a consistent delivery of a message of stability, control and a plan to rectify the situation.

  • Increase management visibility – In times of crisis, the senior management team needs to be visible, project a level of control, tackle the tough questions, offer plans and solutions, and instill a level of confidence in all stakeholders to foster the belief that the company can emerge stronger than ever.

  • “We don’t comment on rumors” doesn’t apply in crisis situations – If unfounded rumors regarding the health of an organization are causing investors and other stakeholders to act irrationally, the firm has an obligation to publicly address their concerns for the benefit of all stakeholders.

A crisis plan is like your last will and testament; you need one but hope you never have to use it.

Technorati Tags: crisis communications planning, financial chaos, WaMu, Lehman Brothers, Bank of America, Merrill Lynch, mergers, crisis plan, management, stakeholders, business, communications, public relations

Monday, September 22, 2008

Bridging the “Green Gap”

The gap between values and behavior represents a significant reputational risk for individuals, institutions and entire industries. It’s true for the Presidential race. It’s true for Wall Street. And it’s no less true for corporations’ role in addressing climate change, according to the results of a study released by our firm today.

Conducted by Harris Interactive, the 2008 Makovsky Green Gap Survey of 150 leading executives at Fortune 1000 companies found that the vast majority (80%) of top American executives say they are “personally concerned” about climate change. Despite the fact that they believe that climate change is real — and a threat to future generations — as a group they are not driving their organizations to act on those convictions. For example, 76 percent say that their companies should be collaborating with industry groups, suppliers and/or customers to address CO2 emissions standards, but only 57 percent are doing so. While 71 percent say that their companies should be educating employees on climate change issues, only 49 percent are following through.

This is the “green gap.” What accounts for it? It’s not what you would think … it’s not that there is no perceived pay-off for responsible environmental stewardship. In fact, the vast majority (73%) of senior executives link environmentalism with business success. Sixty-one percent say that actions taken by corporations can, in fact, effect change on the environment. What’s more, three out of four (75%) think their company’s action on climate change issues could improve their corporate or brand reputation, strengthen sales and ROI (67%) and improve employee recruitment and retention (58%).

With such a substantial pay-off, why is there a “green gap” at all? According to the respondents, it’s a matter of resource allocation (cited by 60%) and cost (47%).

In her post on BusinessWeek’s Green Business blog, Associate Editor Heather Greene quotes, Makovsky EVP Robbin Goodman as saying, “American business leaders as a group are deeply concerned about global warming and believe that responsible environmental policies make business sense. The challenge moving forward, however, is to unleash these convictions.”

I couldn’t agree more! American businesses see shared responsibility when it comes to remedying the effects of climate change; individuals, the federal government and foreign governments also need to do their part. But it’s up to U.S. corporations to start the ball rolling. We need to bridge the “green gap,” especially when the pay-off represents an increased investment — both financially and emotionally — in the corporation by its stakeholders.

Technorati Tags: green gap, climate change, Harris Interactive, 2008 Makovsky Green Gap Survey, climate change issues, environment, business success, resource allocation, BusinessWeek, Green Business blog, Heather Greene, Robbin Goodman, business, communications, public relations

Monday, September 15, 2008

Passing Up the “National Pastime”!

I always thought American baseball took pride in being known as the “national pastime.” To me “national pastime” means the sport of the American family; the sport that — regardless of gender or age or origin — almost anyone can play; and finally, the sport that brings millions of Americans together, regardless of income level and regardless of whether you are a participant, a fan or even have passing interest.

As ardent a capitalist as I am, I can’t understand why Major League Baseball would permit the Mets and Yankees (and probably other teams) in their new stadiums to charge nose-bleed ticket prices, thereby dramatically eroding our national pastime’s image by closing out the opportunity average families have to buy good seats, unless they want to “burn in the bleachers.”

We recently learned that the average cost for the most prized Mets seat at Citifield will be $494, a 79% increase over current rates. And at Yankee Stadium: $2500. They go down from there – as no doubt will middle-class fan attendance.

Is this the way to grow the game, inspire a broad fan base, encourage children to participate, build support and compete with other sports? As baseball caters to corporate expense accounts, they lose the largest segment of society from where their fan base has emanated.

While football is no less guilty, there are only roughly 16 games per season compared to more than 10 times that number in baseball. Greater supply. Lower demand. More affordable pricing. Isn’t that the smarter strategy?

Technorati Tags: National Pastime, baseball, sport, Major League Baseball, baseball ticket prices, middle class, Mets, Yankees, business, communications, public relations

Monday, September 08, 2008

Getting Mad for Nothing!

One of my earliest experiences as an agency person was seeing an angry client rail about pulling his ads from a particular publication because he didn’t like something in an article about his company. I can’t remember the precise issue that roused his ire, but I remember that it was relatively minor and that, even if it weren’t, there were a whole host of reasons not to threaten someone on the editorial side with pressure on the advertising side.

With the advent of the internet, having a hissy fit about editorial content just expands the audience for an unflattering depiction of your company and its executives.

There was ample proof of this last month when Mad Magazine published a four-page parody of a Circuit City ad. You can see the “Sucker City” spoof on the Consumerist blog.

A thin-skinned Circuit City executive named Elizabeth Barron ordered all stores to “immediately remove all issues and copies” of the magazine from the sales floor and “throw them away.”

Her email was picked up by thousands of bloggers and hundreds of mainstream media and read by hundreds of thousands more, who added their own snarky commentary to the mix (such as this one: “Way to go, Circuit City. Your response to this means it's the first time anybody has paid attention to Mad Magazine in fifteen years.”)

The whole brouhaha calmed down the very next day, when Jim Babb, a savvy Circuit City communications pro, wrote an absolutely charming letter to the Consumerist that showed he had a sense of humor:

I spotted the article about Circuit City and MAD Magazine on your site.

Fyi, I became aware of this "situation" only this morning, and I have sent a note today to the Editors of MAD Magazine.

Speaking as "an embarrassed corporate PR Guy," I apologized for the fact that some overly-sensitive souls at our corporate headquarters ordered the removal of the August issue of MAD Magazine from our stores. Please keep in mind that only 40 of our 700 stores sell magazines at all.

The parody of our newspaper ad in the August MAD was very clever. Most of us at Circuit City share a rich sense of humor and irony...but there are occasional temporary lapses.

We apologize for the knee-jerk reaction, and have issued a retraction order; the affected stores are being directed to put the magazines back on sale.

As a gesture of our apology and deep respect for the folks at MAD Magazine, we are creating a cross-departmental task force to study the importance of humor in the corporate workplace and expect the resulting PowerPoint presentation to top out at least 300 pages, chock full of charts, graphs and company action plans.

In addition I have offered to send the MAD Magazine Editor a $20.00 Circuit City Gift Card, toward the purchase of a Nintendo Wii...if he can find one!

A sincere apology … delivered swiftly … with a convincing promise that the problem will not recur. That’s the essence of good media relations and great crisis communications.

Technorati Tags: Circuit City, Mad Magazine, Sucker City, Elizabeth Barron, Jim Babb, Consumerist, business, communications, public relations

Tuesday, September 02, 2008

U.S. Open: Close Minded?

Talk about poor customer relations, deceitfulness, close-mindedness, bad public relations and not thinking strategically!

Whatever you want to call it, the 2008 U.S. Open, one of the prime worldwide sporting events, chose to commit a silly and yet insulting blunder.

What happened? The U.S.T.A announced last Thursday that there were no tickets left for the weekend. But, according to The New York Times, tickets were on sale on Friday morning.

The senior director of PR for the U.S.T.A. explained that indeed there were “200-300 seats available for Friday and probably 300 combined for Saturday and Sunday.” In explaining the previous no-ticket announcement, the PR director said, “We were looking to avoid a huge buildup of people, and people going away disappointed.”

Talking straight to potential ticket-buyers would have prevented disappointment at the box office. It would also have prevented a huge “builddown” in credibility both for the U.S.T.A and its senior PR director.

Technorati Tags: U.S. Open, poor customer relations, bad public relations, U.S.T.A, credibility, The New York Times, business, communications, public relations