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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.

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.

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.

 

Apologies passé?

You may have noticed as I have how apologies have become much  more common in recent years than they were a few years ago. I attribute this to lessons learned and the growing recognition of the necessity of reputation management, particularly in the digital/social media world.

But, when they become routine they also quickly become meaningless. Tony Jacques has an excellent post on this including some good ideas on how to determine when it is in your interest to apologize and when not. In one example he gives, of Brian Williams pseudo-apology for “misremembering” I think it points out the need for caution about conditional apologies. You know the kind. When I have done something wrong and want to apologize to my wife, there is always the tendency to say “I’m sorry, but…” If you are going to apologize, apologize. Don’t use weasel words, don’t make up words, don’t do it half-heartedly. If there is explanation for what happened and why you did what you did, save it for another message, but don’t fall to the temptation to water down your apology.

 

I was wrong about Twitter. But watch out for Meerkat and Periscope

We’re always looking for the next big thing, aren’t we. Not exactly like venture capitalists, but techno-driven changes in the past two decades have so radically transformed communications and crisis communication that we wonder what will hit us next.

When Twitter came out, what was that 2006?, I quite blithely prognosticated that it would be short lived. Who would want to know what kind of latte you are sipping and with whom? Now Lady Gaga has 45 million followers and some crisis plans have to include the possibility of Lady Gaga saying something bad about them. Twitter is THE necessary tool today for media management, particularly in an emergency or crisis–a shift that started with the crash of USAir into the Hudson.

So, we naturally keep our eye for the next big thing. Bill Boyd has declared that Meerkat and Periscope are the next big thing. More specifically, widespread use of real time video sharing. (Of course, I’m protecting myself against false prognostication by putting the burden on the Chief.)

Why will this be big? I go back to 2010 during Deepwater Horizon. Congressional leaders discovered that BP had a steady stream of video flowing from the ROVs at the bottom of the gulf. Those real time videos showed the oil and mud streaming from the wellhead. They told BP to make those available to the world. My former company, handling web technology for both the government and BP at the time, was asked to set it up. It was very popular. At one time there were twelve different live video streams being broadcast, including from helis and skimmers and wildlife rehabilitation centers. The cost of bandwidth was astronomical. But millions watched transfixed.

I included the possibility of having to provide live video feeds in crisis plans I did following that. I tried to prepare clients for the potential high cost should Congress decide they needed to show the world what was happening.

That was, what, five years ago? My goodness, instead of staying up all night working on the technology to supply those feeds, you just pull up Meerkat or Periscope and start broadcasting to the world.

I won’t get into the details of Twitter’s attempt to kill Meerkat and which app is better. Lots of coverage on that. What I will point out is that this brings citizen journalism to a new level. It is truly citizen broadcasting, in real time, all the time.

Awhile back, reflecting on the Boston Marathon manhunt and how people were sharing information in real time in a variety of ways I did a video called “NanoNews.” It’s not a good name for this new phenomenon of real time news. It’s hardly tiny. It’s huge. But 2 billion people carrying smart phones starting to broadcast their little picture of the world, well, maybe nanonews does fit.

It certainly adds some major risks, including to the issue of verification. On the other hand, there are likely to be big benefits as well. For example, TheePharoh is the now famous tweeter who told the story of Ferguson police gunning down an unarmed black man including photos of Brown lying on the ground. He told the story as he saw it no doubt. But if that act had been Meerkatted or Periscoped might we have seen a different picture? Could we have seen what the justice department did–that it was an act of self defense?

I think this is going to be big. But, don’t ask me, ask Bill.

 

Great lessons on rumor management and how to apologize

Two of my favorite bloggers, Tony Jaques in Australia and Jonathan and Erik Bernstein from California, had excellent posts and two of the most important topics: rumor management and apologies.

Tony tells the story of a hepatitis A scare in Australia that got linked to a frozen berry product.  The company out of an abundance of caution as they like to say, voluntarily recalled their product without verification their product was the cause. From there as you will see the media did their thing and the company apparently did not do enough to correct the misreporting.

The lesson is clear: a lie (or error) repeated often enough becomes the truth. The only way I know to deal with this is to loudly, clearly over and over and over tell the truth and correct the misinformation.

On the topic of apologies, the Bernstein’s rightly congratulate Anthem on their excellent apology following the hacking of 80 million members’ data. The Bernstein’s analysis is spot on as usual, but what struck me is what the company was offering to help assure peace of mind. Plus the fact that the CEO empathized clearly noting that his personal information was part of the hack.

It’s not enough to simply say you’re sorry. You have to say what you are doing to prevent it from happening and most of all communicate that you truly understand how those impacted feel. Not an easy job but well done by Anthem.

 

Is Marshawn Lynch a PR genius?

Somehow, it seems appropriate. The guy getting absolutely the most attention from the media in this Superbowl ramp up is Marshawn Lynch. Why? Because he won’t play their game, at least not the way they think it should be played.

He’s obligated by his NFL contract to talk to the media. Now where did that obligation come from? The media one would suspect. They want unfettered access to the players. So, when Marshawn gets the big fine for not living up to this part of the deal, who goes along. Sort of. He first answers all questions with the same response: “Yeah.”

Then, he ups the game at this pre-Superbowl media day by answering all questions with: I’m just here so I won’t get fined.” I was watching “His and Hers” on ESPN last night and they were furious. But they spent probably 20 minutes talking about guess who? Not outspoken Richard Sherman, not deflategate, not Belichick and his propensity to break the rules. No, they talked about Marshawn Lynch. Same with the print news coming out of media day. What was the story: Marshawn Lynch.

Now, I might conclude that he is doing this because he is painfully shy, hates the media, or doesn’t know the first thing about brand building. Or he could just be a complete jerk.

But after seeing this commercial for Progressive featuring none other than the non-spoken Marshawn, I’m starting to conclude the guy is the smartest PR guy in football, if not in the world. (And Kenny Mayne’s got to get credit for making this happen). Now I could still conclude that Marshawn is just a jerk, but not from what I’ve heard. In fact, it was our son Chris of BaronVisuals who helped shoot the Lynch commercial–not he’s not the guy seen behind the camera (I’m not that old) he’s behind the actual camera. And he tells me Marshawn is for real.

What does this mean for crisis communication? That one should answer all the questions the media through out at you with “Yeah”? No. But what it does suggest is that not playing their game the way they want it played can sometimes, in the right circumstances, and done right, really pay dividends.

OK, this post was just my backwards way of slipping in a comment about the SuperBowl. Hey, I’m from the Seattle area. How about those Hawks?

Paris newspaper attack sickens–and concerns

Today it is Paris. Tomorrow, where? My heart goes out to the victims of this terrible attack that once again blackens the name of Islam.

The news reports of this horrific event bear out the prediction of myself and others that in this time of instant news, we are placed right in the action through social media. The video capturing the shooting makes you want to duck even as you stand on a balcony above the street.

But the real issue of concern here is the dedication of many to take away one of our most precious freedoms–freedom of the press. Even as that freedom is more secure than ever through the millions of reporter/broadcasters carrying their global transmission equipment in their pockets and purses, more and more seem intent on taking that freedom away. We saw it in Mexico where media outlets caved to the demands of drug lords who killed reporters when the media reported on their activities. We saw it in Denmark with the publication of an offensive cartoon. We saw it in Hollywood with North Korea’s attempt to to punish Sony for producing an offensive video. And now this–and many others I’m sure.

The sad truth is, if it was my family, my employees, my life at stake I’m not sure I would have the courage to continue. Indeed, we have seen the effectiveness of these efforts to squelch the offending media channels. I still get angry that a few evil people have made traveling so much more aggravating. What will we do when we see something essential to our understanding of how to live in society being attacked and taken away?

An after thought:

After posting this I read about outlets who were censoring the offending cartoon. This, of course, feeds the bullies and terrorists. Is there another approach. Imagine if a group of POWs were accused by their guards of some misdeed but the perpetrator was not known and not revealed by the prisoners. The guards say step forward if you are guilty or we will take one of you out and shoot you. Instead of waiting for the guilty one to step forward, the entire line of POWs steps forward. Now the guards must shoot all or none. What if all editors, publishers, broadcasters who were concerned about this kind of brutal intimidation published the offending cartoon. What if they upped the game and published a whole bunch of them?

What if every theater outlet in the free world offered to show the Interview for free? Seems that might do more to send a message to the dictator than a few little sanctions.

Just a thought–but this has to be stopped, somehow.