Tag Archives: reputation management

Trust keeps falling–most think our leaders are liars

Only 18% of people trust business leaders to tell the truth–globally. And less than 50% of people trust businesses to do the right things, even less for government. These are some of the findings of the 2013 Edelman Trust Barometer--one of the most important studies in communications.

There are lots of stories out in PR newsletters right now about these findings and what they mean. Here is Bulldog Reporter’s take. Here is the Atlanta Journal Constitution. Here’s the PR Daily story. It’s important to note that while there was some significantly declines, there were also some signs of modest improvement.

What I’m focusing on is the strong belief that most are liars. Think about it for a moment. Most crisis plans include putting the CEO or some other senior business leader out there in front of the cameras, on YouTube or wherever and telling what is going on and what the company or organization is committed to doing about it. If there are 100 people in a room watching your CEO talk, 82 of them are saying either to themselves or out loud: Liar, Liar!

The chart from the Edelman slide deck below (link above) shows who is most and least credible. Think about this. NGOs are the most trusted institutions, academics or technical experts from your organization are far, far more trusted than CEOs. So are regular people, people like yourself.

So, when credibility is on the line (and when isn’t it, particularly in a crisis) who should you have speaking for you? In my book Now Is Too Late I talked about the concept of borrowed credibility. I commented that the crisis communication game is primarily about credibility particularly when there are black hats and white hats involved. It’s a game you cannot afford to lose. But, say you lose all credibility–fairly or unfairly. Your CEO or Chairman becomes the equivalent of a Tony Hayward or Lance Armstrong. Then what? You have to borrow the credibility of others. You have to find those who have high credibility among your target audience and have them speak on your behalf. Of course, if they have high credibility it is because they have proven themselves to be people of character and honesty. They will not be co-opted. That’s a good thing because if someone with high credibility starts speaking on behalf of a seriously damaged organization, the first thing they are going to have to say is that they have not been co-opted, induced, forced or any way gotten involved in a way that damages their credibility.

But, maybe we should be thinking far in advance about who has credibility and should or could be speaking on our behalf in a crisis. Again in Now Is Too Late I talked about putting reputation equity in the bank–you may need to cash those checks. One of the best ways to do that is by making friends with those you may need to rely on in a crisis. Let’s say you are a company with some past environmental conflicts. To have a leading global or local environmental group and leadership engaged with you in getting your act together, being open and honest with them about what you are doing, getting their help in thinking through some of your dilemmas just may pay huge dividends when push comes to shove. Sure, could be very risky because I’ve had one who when it did come to shove turn on me and my client taking full advantage of my openness to hurt us. So, I am suggesting you think about it with some real caution.

The point is clear–in this environment of lack of trust, we need to think about the best ways to build credibility for our organization in times of crisis. To do that, we need to be very realistic about the environment we’re operating in.

 

Lance, Oprah, Manti T’eo–a weird dishonest world we live in

The last couple of days make me think we are all living in a reality show. Maybe one of those candid camera shows and we are waiting for the “reveal.” Are you kidding me?

-Lance Armstrong–hero to millions, cancer survivor, amazing athlete, founder of a foundation that inspired millions to “live strong,” is nothing but a scheming, pushy, bullying liar who used the courts of law to fiendishly pursue enemies and pretend to be innocent. But, we as a society love to see our icons fall of their pedestals and crash into a million tiny pieces so even though everyone knew he was confessing (finally) and that he is a serial liar of almost the worst sort, the crowd still wanted to see him wiggle around in front of us.

– Oprah Winfrey–desperate to save her $300 million she invested in OWN, and perhaps more important, her reputation as a failure-proof entertainment impresario, “stoops” to feeding the hungry crowd the spectacle of Lance admitting to the world that he’s not worth all the attention he’s been getting. My question: what did she have to offer Lance to get him to help her rescue her failing network?

– Catfishing–a new term to me, but apparently a common activity on the internet of pretending to be someone else to pull cruel, inhumane tricks on other people, such as Notre Dame football stars, and through them, the whole university athletic program.

Manti T-eo, the newest reality TV star and football player who now even the smartest of our journalists can’t figure out if he’s the victim of or perpetrator of fraud, or both. Clearly, even if he is the victim of catfishing, as right now appears to be the case, he is also no victim as he has been caught lying repeatedly about “seeing” his girlfriend and being with her. He may be a victim of cruel hoaxters, but he is far from innocent himself.

This is all too bizarre. There is one common theme to all this. Lying. What strikes me is that the interest shown in these stories show how conflicted we as a society tend to be about the issue of telling the truth. We live in a time where honesty, transparency, truth-telling are held as nearly ultimate values. We are appalled at the sheer degree of lying that someone like Lance Armstrong participated in for many years. He told Oprah he did not think what he was doing was wrong, bad, cheating, or anything like that. In the meantime, he is treating others like dirt and forcing them into similar behavior. This man seems to have no character–yet we seem to be fascinated by him. Oh, the books and articles and blog posts and movies about to come. If he is the scum back he professed to be, why can’t we just leave him struggle with his legal problems in peace?

And catfishing and computer hoaxes. I heard one commentator on the ABC news clip linked above saying in effect this is a natural result of the anonymity of the web–as long as we can hide behind our screens people are going to do that. Yes, but in a time when we demand such an incredible level of honest and transparency from everyone else? What is going on here?

So, we hate lying, we hate liars, but we are endlessly fascinated by them. And the very people who are so outraged by the lack of transparency of the big and powerful are in some cases making a mess of other people’s lives by misusing the anonymity of the web. Maybe I’m the one confused, but this is just not making sense to me.

 

McDonalds (Canada, any way) gets transparency right

You may remember back in June there was a bit of hubbub over Mcdonald’s Canada answering very transparently a question from someone about how and why they doctor the advertising images they use to sell hamburgers. They did a great job on video of walking through the photo shoot process–and dispelled a lot of myths and cynicism along the way.

They are continuing in this vein with this new video about french fries. A McDonald’s supply manager (clearly Canadian with his pronunciation of words like pro-cess) answers questions about whether McDonald’s fries are really potatoes, whether or not they are formed or cut, and why there is so much salt on them. The video walks us through the whole french fry process from farm to customer. In the pro-cess, answers from customers are provided, offering reassurance.

Certainly there are those out there who don’t think anyone should eat fried foods. And so they will say, look at all that horrible frying. Well, if you don’t like fried foods or french fries this video isn’t going to convince you otherwise.

The point is that here is a lesson for the entire food production industry. Be transparent. If there is any part of the way you do things that will not stand up to this kind of video presentation, you had better start changing it now. Because while McDonald’s is featuring a pleasant looking supply manager (who maybe has eaten a fry or two too many, just like me), a video about your process may wind up on YouTube without you doing it or knowing about it. So much better for McDonald’s to be telling their own story, even if some won’t like it.

Great job McDonald’s Canada.

 

Bodyform shows how to respond to a viral negative rant

It’s pretty well understood now by most in business that social media has created additional vulnerability: someone gets mad at you for good reason, or not so good, and if they are clever enough or if lightning strikes, their rant can go viral and cause a genuine crisis. The big question is, how do you respond?

United Airlines showed how not to when Dave Carroll saw his guitar smashed by baggage handlers. He turned a very negative experience into a bash-United song that went viral, created a new career for him, and gave people like me something to talk about for a long time.

Now, there is a new example to show, but in this case, it is one of the best examples ever of a response to a social media rant. I put it up there with Taco Bell’s brilliant response to the ridiculous lawsuit over their “hidden” beef. They placed ads saying: Thank you for suing us.

This time it was Bodyform, a make of maxipads, who was victimized by an outrageous rant on their Facebook page. A rant that quickly went viral with 40,000 likes in 20 hours (please note: 20 hours–that’s how fast these things go!)

Now, how would you respond? There is a tightrope here, thar be dragons everywhere. Take this quiz–set your own strategy before reading further and seeing the brilliant response of Bodyform.

I can’t describe it, so you will have to watch the video. Stay to the end, it’s got sort of a smelly kicker.

Here’s what I like about it:

– it fits the culture–that sly sarcasm that exposes the silliness of the complaint will resonate well with the digital mob

– medium and message match–they not only use the medium of social media, they do it in a way that totally conforms to the values of the crowd

– the “CEO” “apologizes” therefore demonstrating transparency, honesty and humility. In the process, she can hardly help making those of us who teach the “right way” to respond wriggle just a little bit, along with Richard of course.

Well done, Bodyform!

And to the Richard’s of the world who think you can embarrass savvy companies like this one, be warned. You may become the butt of your own joke.

 

 

 

Scary thought for consultants: are crises overblown?

There’s quite a group of people like me who make a living, or try to, by telling CEO-types that “they better prepare” because “now is too late.” The underlying and compelling reason is that a major crisis is a big deal, maybe even life or death for the corporation. But, this Wall Street Journal article poses an interesting and potentially disturbing question: are these new kind of social media-driven crises not really such a big deal? Do they really have any lasting impact on the share price, bottom-line an organization future?

The article traces the story of three recent reputation crises which would fit in the category of serious. But, it shows that the impact of these events was very short-lived and with little to no apparent damage to brand value, share price or profits. One of the organizations highlighted is Goldman Sachs which has become a favorite whipping boy of the media in the last while with little apparent impact on the company’s future or performance.

The writer of the article also asks a number of PR professionals what they think of these short-lived events. “Puzzled by such sanguine attitudes, I asked PR experts for an explanation. Their answers can be grouped in three categories: “the shiny object,” “the loyalty issue” and “the lack of choice.””

Personally, I have felt for some time that the recent changes mean several things:

– much increased vulnerability because of how the digital lynch mob can operate (thanks Geoff for that descriptive term)
– much faster response required because of the light speed of the hyper-networked
– much faster cycle from germination, to full bloom, to the leaves dropping harmlessly
– potentially lower impact because of the sheer volume of these (see increased vulnerability) and the weariness and loss of attention span caused by the volume and frequency.

There are other important factors highlighted by the PR pros. One is loyalty, the other is the growing realization that the digital lynch mob is not the whole world (see my post on Komen Foundation where I think most PR analysts completely missed this point). But the biggest difference to me is engagement. Pre-engagement with key stakeholders. This is becoming my new mantra but I think it is critical. If you talk to the people who matter, and a lot of them at that, on an on-going basis, then when it hits the fan, you can just keep talking. You either say: we screwed up and we’re sorry and we’re fixing it, or the lynch mob has it wrong and here’s why, or the media’s not telling the truth and here’s why.

This ability to just step up and on-going conversation is one big reason why I think a lot of the flutter than happens on the Internet and media with these kinds of issues just won’t be such a big deal. But, if your only way of talking to the people who really matter is through the media by pushing out a press release or two, hang on for a longer and much bumpier ride.

A Post Script re Pink Slime.

The pink slime crisis sort of gives lie to the above issue of crises not having such a great impact. BPI certainly wouldn’t say that as it fights for its life. Another producer of the beef product, just filed for bankruptcy.

J&J takes apologies to a whole new level

Apologizing has become one of the standard practices of crisis communication and reputation management. The problem is, they are all starting to sound alike. “We deeply regret the impact this event is having on our valued [whatevers].”

Johnson & Johnson had a rather rough 2010 with millions of products recalled including infant Tylenol. Then in January, 2011 its popular ob tampons quietly disappeared from shelves. The products loyal fans went nuts on social media and J&J, without apparently explaining the reasons for pulling the product, decided to bring it back.

I suspect that their marketing and public affairs staff got a little tired of the standard apology that they had to drag out over and over with the recalls. So they got creative, and in the process I think have set the standard for apologies.

Here is their apology–turn up your speakers and make sure you put in your first name.

 

Replying to William’s question–Goodwill and Reputation Management

Frequent Crisisblogger commenter William Cummings (vacation lane blog) asked about the relationship between the accounting of “Goodwill” and “reputation management.” I started to answer but decided to make it a post. Here’s to you William:

Not  being anything resembling an accountant my understanding that “Goodwill” is sometimes shown as an asset on a financial statement as a way of capturing the intangible but very real value related to the company’s image, brand value and/or reputation. The reality is that a business is or should be made up of much more than its physical assets. In fact, I argued in a much earlier book, that the real value of a business ought to be measured by its relationships–the number, quality, and potential revenue and profits they and those they connect with represent. There are a number of companies today that measure “brand value” by looking at these things and making some financial determination of what the company is worth based on its position in the market.

Reputation management can be seen as those things that management does to protect and enhance its brand value. Company executives do lots of things to protect and enhance their revenues and profits and these are traditionally seen as the primary and appropriate focus of management. But brand value goes beyond sales, costs and margin. While you may be able to increase net margin by sourcing a better supplier, or increase sales by a more effective marketing strategy, enhancing and protecting brand value is a little more complex.

Interbrand does a good job of analyzing brand value. But one of the most useful stories and analysis I’ve seen of this is from 24/7 Wallstreet where they present the 15 most hated companies in America.

One thing that will become clear from looking at these ways of measuring brand value is that it does not equate sales and profitability. In fact, it is quite possible to be ungodly successful in sales and profits and have a really bad public reputation. The two often go together as I’ve commented here several times–look at what happened to Microsoft when they became totally dominant in the software business. They had a terrible time until Google showed up and started competing–now Google faces some of the same problems because of their dominance in their sphere. When Toyota approached and then passed GM as the biggest carmaker in the world I warned (in 2007) that they should watch out because they were susceptible to reputation attacks based on their leading role. Success can really hurt.

William, I’ve gone far beyond your question–but reputation management obviously is a big deal. As the article that prompted your question points out, it is now CEO’s biggest concern. Ultimately, however, the solution is simple. Be trustworthy yourself, and make certain every day that your organization does all it can to earn trust from those people on whom you depend for your future.

What if BP asked my advice?

I’m sure most crisis communicators have asked themselves that question in the last while. What if the new CEO of BP, Robert Dudley, called you into his office and said, OK champ, what do we do now? What would you say?

They haven’t, but it doesn’t stop me from speculating as to what advice I would give. So here goes:

1) You’re on the right track.

You made some impressive moves with the replacement of key executives and the formation of a new unit to focus on safety. That suggests you are serious about addressing the realities of a culture issue (whatever those may be) and the public and media perceptions. Now you  need to follow that up with clear, consistent reporting on what changes are being implemented as a result of these steps.

2) Recognize your credibility is severely damaged.

While the move from Mr. Hayward to yourself was necessary and has been pretty positively received, do not deceive yourself into thinking that what you say is golden. You still have a BP logo on your business card and that nice little solar flower image is definitely not golden. You need a credible voice to speak to you and for you–one the nation trusts and that will surprise the media. They should not be a spokesperson for BP but instead a spokesperson for the public into BP, an ombudsman. But from that vantage point they can report on what BP is doing to fix the company, their image, their culture and the mess in the Gulf. Colin Powell comes to mind, of course Thad Allen would be outstanding but not sure how that would work. But, you get the picture. James Carville? Not so much.

3) You are a leader–don’t be afraid to lead.

Despite what many people may think of you and the lack of trust they express, the reality is that no one in the world has the knowledge and expertise that your organization has in dealing with deepwater well failures. You have already been generous in funding lots of studies. Now don’t be afraid to step to the front and help the rest of the industry, the nation and the world deal with the very real issues of deepwater drilling. Until the world loses its taste for hydrocarbons, we need that dinosaur rot and you know better than any how to get it and what can go wrong.

4) Become a champion for Unified Command and the National Incident Management System.

Because you were in the forefront of this thing, you know better than almost anyone what went right and what went wrong in the event. As Admiral Allen has pointed out, one of the biggest problems from a perception standpoint was the difficulty of the public (mostly the media) to understand how the party who caused or at least is responsible for the spill could also be a key part of stopping it and recovering. Some have suggested that the government should have all the technology and expertise your team has. It’s ridiculous and you know better than anyone. We need to have private/public collaborative response working effectively in this nation–both for human caused events like oil spills and terrorist attacks and major national disasters. Few are speaking out about the need to protect and enhance our National Incident Management System and the core concept of collaboration and mutual trust and respect. You took an awful beating from not just the media but the administration. It should not prevent you from speaking out boldly about the need for an effective Unified Command response and closer adherence to the key principles of the National Incident Management System.

5) Keep focused on building trust.

Sure trust was lost, fairly or unfairly. You can’t be the one standing there responsible for spilling five million barrels and not lose trust. But trust can be earned back. The focus is straightforward–do the right things and communicate about them well. You’ve done some tremendous work, particularly in community relations in the areas affected. Keep doing what you need to do, keep an eye out for the values and expectations of all the reasonable people out there, aggressively and consistently communicate and BP will not only restore the respect it once held, but earn new respect.

Best wishes to you Mr. Dudley.

The link between reputation and company value–BP shows the high cost

Public relations pros often deal with the question as to how to get CEOs to pay more attention to the vital role of reputation management. Some CEO’s seems to inherently “get it,” and others, often financial-metric driven, have a harder time understanding the link because they don’t see an obvious connection between investments in reputation management or protection to the all-important quarterly results.

Crisis expert James Donnelly pointed this out in a recent post referencing a Forbes article which suggested we may be entering an age of reputation management. But, if anyone doubts the stunning impact of reputation loss on economic value, all one has to do is look at BP. One of the highest value and most respected (albeit hated by anyone who thinks hydrocarbons are evil) companies, has dropped out of the list of the 100 most valuable brands as a result of the catastrophe in the Gulf of Mexico. This according to brand valuation expert Interbrand.

I suspect that BP will be used for many years by anyone pitching PR services and particularly crisis preparation services to senior leaders. And well they should be. But I do have a fear. I’m afraid the pitch will be: See what happens when you don’t do good PR? Your reputation will go to heck and your brand value will be destroyed.  A much better pitch in my mind would be: There are some problems that even great PR can’t fix, so if you have any chance of doing some really serious damage to people, their futures or the environment, let’s look first at minimizing the risk of those bad things happening, and then let’s look at how to respond effectively if some really bad things do happen.