All posts by gbaron

Failure to Plan Increases Risk of Reputation Damage in High-Profile Lawsuits–Guest Post

(I don’t often invite guest posts from promotional releases, but I did request this from Greentarget as their research into the 20/20 hindsight of litigation-related crisis communication was very interesting. In litigation, lawyers often take the lead in directing communications. Some are very good at it. But most, if not all, do prioritize the risks in the court of law higher than the risks in the court of public opinion. That can lead to very damaging results. What it does lead to almost always is a more conservative approach to managing communications than is best for the company. That, it seems to me, is what this research points to.)

By Larry Larsen, Greentarget

In today’s 24-hour news environment, most senior legal officers across corporate America acknowledge the importance of communications with stakeholders during high-profile lawsuits.  Yet the majority have outdated strategies or no strategies at all to direct communications outside of court, according to a new survey conducted by Greentarget.

This lack of preparation leads to overly conservative communications, the survey shows, with decisions and actions that are often impulsive and governed by the fear of negative media attention. Ironically, these instincts can compound the likelihood of reputational damage.

“The fact is that most senior legal officers can name the top two or three lawsuits they never want their companies to face,” said Larry Larsen, senior vice president of Greentarget and head of the firm’s Crisis & Litigation Communications Group. “They should take some level of control and prepare for what’s to come.”

Here are the steps to take in preparation for likely scenarios. Giving some level of advanced thought can save precious time when a high-profile lawsuit is filed and the questions start pouring in.

  • Crisis response team. To save time and limit confusion, have a team in place with one leader and key representatives from decision-making functions within the organization – legal, external communications, internal communications and marketing.
  • Decision tree and likely scenarios. Because it’s vital to know when to active the crisis team and alert senior management, we typically recommend a tiered system on which to gauge the severity of a crisis.
  • Trusted outside counselors. A firm should have key outside advisors — legal, financial, public relations, etc. — on call to assist and strategize as situations dictate. Large firms should consider multiple advisor relationships in each category in case of conflicts.
  • Training and role-playing. If your organization’s leadership doesn’t have experience with the media or in crisis situations, drills and media training sessions are invaluable for driving home the critical steps and the resulting responsibilities.

How much damage can a reputation crisis do? Ask Chipotle

Lots of discussion about how much harm a reputation crisis can cause, long and short term. I’ve written on this quite a bit in the past using a study out of UK which showed that the longer term recovery of the share price was directly related to the perception of the character of the leader or leaders as demonstrated by actions they took.

That is one of the most important things folks in crisis management need to know.

Chipotle is hurting. The gizmodo story makes it painfully clear just how much the e.coli and other food related illnesses have cost them.

I give Chipotle executives mixed marks on the response as much as I have seen. I think they did a lot of things right, including shutting down the entire operation for one day to focus on food safety. But I haven’t really seen the assurances of how their new safety policies will impact how they source food–an issue that I think is at heart of their problems. And they haven’t made the dramatic, eye-catching move that shows, yes, they care, they get it, they’re doing things differently. But, as I’ve said before, its easy to be an armchair quarterback in these things. I’m sure they are doing everything they can and praying for no more bad luck or outbreaks.

About food producer “go to jail jobs”–we need clarity

For food producers and those concerned about what I wrote here recently about food producers having go to jail jobs, food safety attorney Bill Marler has provided some very helpful background information. In this post he details a number of major food safety cases, some of which resulted in food executives being criminally prosecuted, paying big fines or even going to jail. But some did not.

Beyond being a very helpful listing, Mr. Marler asks a very important question: why are some chosen for criminal prosecution and not others? Does it relate to the seriousness of the illnesses or the number of deaths involved? Is it brand visibility?

Marler asks:

Admittedly, I have been a booster for increased food crime prosecutions – both misdemeanor and felony. In all the four cases above where prosecutions happened, I have helped prosecutors understand the science behind the outbreaks and explained to them the devastation suffered by the victims and families.

Yet, looking at the above outbreaks together, I find it a bit hard to parse out why some have been targeted – OK, perhaps the Parnell prosecution is a bit easier because it was so clearly intentional – and some have not, or at least not yet.

Honestly, what are the differences in prosecuting the Jensens, DeCosters and ConAgra and leaving the others – so far – unmolested by section 402(a)(4) of the FDCA? Is it the number of sick, the number of dead? Is it the economic consequences? What really are the criteria, or, should it simply be left to the discretion of the prosecutor as to who or what feels the sting of the criminal justice system?

It is time for prosecutors to set forth clear guidelines for who is prosecuted and who is not. People (and corporations if you do not quite agree with some who do not see the difference) should know what the rules are and how they are going to be enforced and that they will be enforced consistently and fairly.

Given the seriousness of food safety, there is little question that those grossly negligent, outrageously irresponsible or who show little or no regard for the consequences should be held accountable. Unfortunately, the way the law reads and the apparently random actions of prosecutors means that at least some who don’t fit that criteria can and will be prosecuted. There is something wrong with that.

Blue Bell’s Criminal Investigation–add food producer to “go to jail jobs”

Years ago a friend who was a refinery plant manager talked to me about how many jobs in the oil industry were now “go to jail jobs.” That is, if something seriously went wrong, you could go to jail simply because of the position you held.

Indeed, one client I worked with, a senior manager of a pipeline company, did go to jail for six months as well as several of his employees, despite the fact that the accident involved was the result of an incredibly complex chain of circumstances many of which they had no control over.

Perhaps this can be justified given the seriousness of the responsibility of some of these jobs. But we seem to have lost the idea that accidents can happen and while you can almost always find some action that would have prevented it from happening, that does not necessarily equate to negligence. Unless you are a plaintiff’s attorney of course.

Now, those involved in food production also have go to jail jobs it seems. The Department of Justice has begun a criminal investigation of Blue Bell, involved in a listeria outbreak earlier this year.

Bill Marler, likely the most prominent food plaintiff’s attorney in the nation, seems to be chortling a bit over this investigation–and not just because he predicted it.

He helpfully explains how a company executive like Mr. Kruse of Blue Bell can be subject to criminal charges and possible jail time: a food product is deemed “adulterated” if the food was “prepared, packed, or held under insanitary conditions whereby it may have become contaminated with filth, or whereby it may have been rendered injurious to health.” A food product is also considered “adulterated” if it bears or contains any poisonous or deleterious substance, which may render it injurious to health.

He concludes: the legal jargon aside, if you are a producer of food and knowingly or not [emphasis mine] sell adulterated food, you can (and should) face fines and jail time.

In other words, as I understand it, if anything gets into a processing or storage facility that could be “injurious to health” then the senior executives involved in that facility can (and according to Marler) should go to jail.

That is absolutely chilling to me, and I’m not a food producer. But I am aware, as I think most are, that there are a range of bad things that can happen even in the most cautious and responsible operation. My friend talking to me about go to jail jobs in the oil industry commented about how this had a negative impact on the industry attracting top talent, thereby of course, increasing the cost of recruiting and holding talent. If Mr. Kruse goes to jail without overwhelming evidence that he was outrageously negligent or created an atmosphere of carelessness, in other words, if this is a show trial the impact on food production could be significant.

Chipotle’s recovery–a case study either way

Chipotle is in the midst of a do or die crisis–well, maybe not die but suffer a long, painful recovery. I’m very curious how this will play out. How will they attempt to recover their reputation and more than that, their loyal fan base.

That is one thing I see as a real problem for them and for any company that attempts what I called earlier a holier-than-thou branding. This kind of intense brand-based loyalty, like Apple or maybe GoPro or even Starbucks, is based in part on a perceived alignment of personal values. Apple’s values are still linked in many ways to the 184 ad that set the tone for the company even though it is likely that few current Apple buyers have ever even seen the ad.

Chipotle was working hard to tie in to the healthy food values of the majority of Millenials and had earned high marks and strong loyalty based on those values–even though many of their “integrity” claims such as not using GMOs were questionable. While many believe (without much factual basis in my humble opinion) that the buy local and other integrity strategies results in healthier food, Chipotle is causing some deep questioning of that. Truth is, our traditional food production system is subject to the highest levels of scrutiny and inspection. Farmer’s market food isn’t. That’s an uncomfortable truth to many promoting healthy foods.

Bloomberg’s unfortunate and patently unfair cover art (with surprised fellow in a serious hazardous material suit) highlights the essential problem here and that problem goes far beyond Chipotle. Every company looking to tie into the deep social values of its target audience has to look carefully at this. BP’s Beyond Petroleum enabled the oil company haters to take full advantage of the truth of BP: it is an oil company above all. The alternative energy projects it was pursuing were dancing around the edges and certainly never were core to what the company was doing.

Bloomberg talks of the “smug” marketing of Chipotle:

For a long time, smug worked pretty well for Chipotle Mexican Grill. It’s grown into a chain of more than 1,900 locations, thanks in part to marketing—including short animated films about the evils of industrial agriculture—that reminds customers that its fresh ingredients and naturally raised meat are better than rivals’ and better for the world. The implication: If you eat Chipotle, you’re doing the right thing, and maybe you’re better, too. It helped the company, charging about $7 for a burrito, reach a market valuation of nearly $24 billion. Its executives seemed to have done the impossible and made a national fast-food chain feel healthy.

That smugness bugged me for a long time, but then, I’m a strong defender of family farming and that includes the kind of products and processes that Chipotle’s marketing was intended to defame. But the point is a warning to any company looking to tie into emotionally laden social values. As Chipotle showed, the rewards can be great. As Chipotle also showed, the risk reward ratio works here as well. The risk is also great.

Chipotle–what does this mean for “holier than thou” branding?

I might as well add my thoughts to the conversation around Chipotle and their unfortunate situation. Yesterday I drove by the Chipotle location where several of my fellow Skagitonians were sickened by e.coli–so the issue is close to home.
But what lessons are here for crisis communication?
To me the most interesting question is not about how Chipotle is responding to the crisis, but how branding affects reputation. Chipotle has been exceptionally aggressive in attempting to position itself against competitors as a healthier provider of food. It’s touted its organic and non-GMO credentials communicating that Chipotle food is better for you than what you get at other restaurants. It reminds me a bit of BP with their “Beyond Petroleum” branding. It seemed like a good idea at the time, but the realities of both BP and Chipotle were that they still had to (and have to) deal with the fact that BP is mostly an oil company and Chipotle is a fast food company dealing with the normal issues of sourcing and handling food. The truth is, and the Chipotle situation may help people understand this better, is that some supposedly healthier food sources may not be subject to the same inspection and government scrutiny as the traditional sources. Just like bottled water, unlike tap water, is not subject to government testing for safety. I suspect that the effort to buy local and as direct from the farmer as possible may be part of the problem as wholesome and preferable as that may seem.
My thought is that any brand looking to establish a kind of “holier-than-thou” brand strategy, one that attempts to grab a moral high ground, needs to consider what happens to their brand when things go wrong. Starbucks is an example in trying to establish itself at the forefront of social changes. Certainly the unfortunate CEO of the Seattle company who sought to address the real concern about wage equality by giving everyone a $70,000 per year salary has found there are some problems with that approach.
Chipotle is also an innocent victim of the cascading effect that we teach in crisis management. “Bad things tend to come in threes,” is the old saying. But this is especially true in crisis management because of the normal way the media covers these things. When something bad happens they immediately look at the record (easy these days with the internet) and try to show a pattern. Then, with media and public attention focused on the company, anything else that happens in that window of focus, immediately becomes part of the story and contributes to the narrative of bad behavior. In Chipotle’s case, the novovirus sickness in Boston has apparently nothing to do with the e.coli illness on the West Coast, but because they both involve food related illnesses and Chipotle they are linked. One plus one becomes a lot more than two.
No doubt Chipotle has its branding and reputation work cut out for it. They do need to show more empathy for those who became ill, need to communicate (which they have) what they are doing to ensure food safety, and I would say they should also say they are doing a top-level review of food sourcing and inspection protocols. I think rather than talking much about organics and GMOs they are going to have to be talking about ensuring protection from pathogens–a much more serious food safety and health issue.


Partisan extremes show up big time in social media in Europe

We talk a lot about the extreme partisanship in American politics. Seems Europe has at least some of the same phenomenon. We also talk about the “Digital mob” and the lack of civility in political discourse.

Economist has some insights (again!). This article called Extreme Tweeting shows how the right and left extremes in European politics far dominate use of social media. It’s clear that politicians on the far left and far right are both far better at using social media than those more down the middle and that their audiences are far larger and far more engaged. But why?

The article suggests several reasons. 1) they are more prolific users, 2) “Social media reward starkness, not subtlety” 3)  faster reaction because they don’t seem to sweat over delicacies (ala Trump I suppose) 4) they are more into organizing and activating.

I am finding this is true not just in politics, but in issue management. It is the extremes that seem to dominate. The problem is, to compete in this environment it seems you are almost forced into being extreme yourself–and that something us moderates and responsible types struggle with.

The Politics of Food Fear

We live in a strange time. Particularly when it comes to food. Without any doubt our food is cheaper, safer and of higher quality than ever before. We have far more choices. We have far more industry and government scrutiny. Yet, more and more people–particularly young people–seem scared to death of their food. I saw a recent study that showed concern about our food is rising faster and is a greater concern in our country than foreign policy and just about any issue that affects our future.

Food fear stems from multiple causes. Let me suggest a couple at least.

  1. Constant, global news.
    Media (including bloggers, social media channel managers, lawyers, etc.) understand there is public concern around food. So if a child in Budapest gets sick from food poisoning, somewhere it is going to show up on some form of news. Make it a dozen children, or a fatality or two and it is going to grab major headlines. Chipotle (not may favorite food outlet for their cynical effort to contribute to food fear through marketing) closed 43 restaurants in the Pacific Northwest for 49 cases of e.coli. Not sure how many of those are hospitalized and there are no fatalities, thank God and good medical care. But it made global news. A story on KOMO News in Seattle a few days ago highlighted the fact that 48 million Americans get sick from some form of food poisoning every year. Holy Mackerel! Talk about your epidemics. Yet, what is this compared to what it was maybe 50 years ago?
  2. Media, Social Media and FUDO.
    Fear, Uncertainty, Doubt and Outrage are the currency of attention and attention is what everyone in any form of the media business needs desperately. You can’t put cute cats or farting babies on every newscast, so you have to do something to capture eyes. That KOMO report I mentioned is an example. There is no context provided, no comparison, no moderating comment about this being because of dramatically improved reporting, medical care and government scrutiny. That it does not represent the kind of danger to the population that this report would suggest.

    An even better example of this is the recent news from the World Health Organization that red meat and processed meat in particular is right up there with cigarettes and plutonium. The truth is the actual report is much, much less scary than the headlines and the report itself is deeply flawed because they bagged on the question of any safe quantity. Nevertheless, this report provides exactly the FUDO currency news outlets need–particularly for headlines.  Note the considerable difference between the headline and the story in this BBC account below.

  3. Food fear and politics
    But this story about red and processed meat and the World Health Organization is more than about media and their sensationalism for survival. It is also about politics. There is no doubt that many will be jumping up and down about this report, not just because they are vegans, but because it seems now clear that the WHO announcement is driven more by global first world vs third world politics and particularly around global warming. The Wall Street Journal identified the connection in this article.

    Your reaction to that article will likely depend on your orientation to the issues of global warming, raising beef or other animals, and food safety. I recently read an intriguing book called “Defending Beef” written by a former environmental lawyer who went around suing people for destroying the environment, then met and married a grass fed beef farmer. She takes on the global warming connection between raising beef and greenhouse gases. I found it pretty convincing even though I think it a bit funny how only the benefits to the environment of animal farming, which she powerfully documents, accrue to grass fed beef and no beef that are fed any grains.

    I hope people look closely at the reports about the red meat scare. You will see that yes, consuming vast amounts of almost any substance is going to harm you and that includes too much bacon and sausage. However, the likely impact of you on what most people eat is minimal at best and most likely non-existent. That does not keep those in that building in New York from sending a message that they know will result in the scary headlines of almost any news outlet carrying the story. The sad thing in my mind is as the truth becomes more clear, it is the credibility of the World Health Organization that will be hurt, and that may be to the detriment of all of us. In the meantime, the media beast has been fed and those who think our food is killing us have one more piece of “evidence.”

  1. Screenshot 2015-11-12 10.21.54

Attack your attackers? Amazon adds ammunition to the argument

One of the most controversial issues in current public relations and crisis communication thinking is the issue of dealing with attacks from the media. I have run into this several times in the past year in work I have been doing so I know it is very much a live issue.

The non-confrontational answer: 1) remain focused on telling your positive story 2) don’t pick a fight with someone who buys ink by the barrel 3) don’t elevate a story beyond what it is making the situation worse by drawing more attention to it or drawing it out into a longer crisis

The confrontational answer: 1) A lie repeated often enough becomes the truth 2) reputation is based on credibility and if the attack has serious weaknesses in facts or truth it is necessary to point that out 3) its a black hat/white hat world and and accusation (naturally white hat) will stand unless thoroughly refuted and the black hat placed on the accuser

There is no doubt that I tend toward the second answer more than the first, with this caveat: it is very much situation dependent.

While I think the great majority of PR thinking is still based on the first one, I see more and more evidence of the second approach being used and to good effect. I’ve commented here earlier on a couple of examples of Elon Musk taking on his critics both in the federal government and in the New York Times. Now we see Jeff Bezos taking on the New York Times on the issue of the work culture at Amazon.

It’s a huge issue. Amazon’s rep took a huge hit with the piece by the Times. Was it fair? You decide. Does it give more credence to the non-confrontational or confrontational approach. Which is best long term for Amazon’s reputation? Would it have been better for Bezos and his comm team to let the issue die quietly, or would it have continued to fester? Is his response sufficient to overcome the evidence presented by NYT. I see all these as ultimately about credibility–given this, who will emerge as the winner?

I’d love to hear other thoughts on this. Because it is a question I face almost every day being actively involved in issue and crisis management where the question is far from academic.


Moving the black hat: A lesson from the GMO debate.

White hats and black hats. In its simplest form that is the way the reputation game is played. I attributed this in Now Is Too Late to the move of Walter Cronkite style journalism into prime-time television with the launch of “60 Minutes.” Having to compete with drama on TV, they adopted the simplest and most satisfying form of drama: melodrama. And the melodrama is characterized by overly simplified portrayals of white hats (good guys) and black hats (bad guys) fighting over the maiden in distress (any form of public good).

In crisis communication and reputation management, you normally have the black hat on. Someone is accusing you of something. The accusers, as portrayed in media reports, almost universally where the white hat with little attention paid to their motives, interests, or even credibility of their accusations. Why? Because it fits the formula. Nuance doesn’t play well in melodrama or “investigative reports.”

But a major strategic question in these issues is when and how do you get the black hat off you? One response is to do your best to change hats. Knowing that the media will only play this white hat black hat game, unless the hat colors switch, you are going to be stuck.

Being very involved in food related issues, this is a particularly challenging question. I’ve watched the GMO debate with great interest (and frankly, great frustration as long time readers here know). The very voices who rail at the ignorance of climate change deniers for their stubborn resistance to scientific consensus, completely change position when it comes to GMO. The scientific consensus is very clear: GMOs are safe, in fact, likely help make food safer. But, despite the incredible amount of scientific study, the anti-GMO activists cling to their attacks. Even Michael Pollan, the respected food writer, says in effect, well, I’m not really saying that GMOs are bad, but they should be labeled. As I argued before, that for 57% of the population would be putting a poison label on these foods. Do Michael and company really think putting the skull and crossbones symbol on food that is known to be completely safe is in the public interest?

While it seems that the pendulum is swinging and that in general the public is coming to understand that the activists are out to lunch on this, those defending continue to be on the defensive. They continue to wear the black hat, which may only be turning slightly gray. The only way to really move the dial on this issue is to switch hats.

And that is what William Saletan has done in this very important article in Slate. In this meticulously researched article, he demonstrates the dishonesty and hypocrisy of the anti-GMO activists. As the subhead states: GMO food is safe. The rhetoric is dangerous.

As always, these debates involve the public good. If you are going to put a black hat on someone, you have to demonstrate that what they are doing is harmful to innocent people or the environment. Clearly the activists have been harmful as he makes very clear.

Moving the hats isn’t an easy thing, particularly when the accusers have had the benefit of media presenting the story in their typical melodrama fashion for so long. And personally it can be dangerous. The “true believers” in the anti-GMO camp will likely turn on Slate and Saletan with a vengeance. Until many other voices like Saletan’s join in the discussion, calling out the Chipotles and Whole Foods of the world for their participation in something they see as harmful, there will be continuing confusion about who are the good guys and who the bad guys here.

It is interesting to see how the major media are dealing with the shift. Case in point: New York Times published a guest editorial from Mark Lynas in April. Lynas is the well-known British anti-GMO activist turned GMO promoter. But we do not see a NYT article or other mainstream outlets doing the melodrama treatment on Greenpeace or the other activist groups. When we do, we will know that the melodrama game has turned against those anti-science true believers.