Friday, March 30, 2012

What Were They Thinking?

The Sanford, Florida police department hired a public relations company to help them deal with the news media in the wake of the Trayvon Martin shooting.

This statement was apparently prepared by the PR agency and released by the Sanford Police
Department March 28:

Sanford, Fl – March 28, 2012 — The City of Sanford kindly requests that members of the media refrain from approaching, phoning or emailing city employees when they are in their roles as private citizens. It has come to light that there have been a few incidents where city staff were followed and approached at their home or in settings outside of working hours.

Law enforcement officials will not hesitate to make an arrest for stalking.

I spent 35 years as a reporter, anchor and news manager before joining the Institute for Crisis Management almost 20-years ago.  I was never threatened with arrest while trying to get a public official to answer questions while at work or any other time or place.

I suppose you could make an argument that any reporter who covers Mitt Romney or Newt Gingrich from state to state covering their campaign for the presidential nomination is “stalking” them and if the coverage is unfavorable have them arrested!
It was no surprise that 24-hours later, the city issued this statement:

On March 28, 2012 the City of Sanford issued Media Advisory Number 23 (Press Release 23). Upon reevaluation, it is clear that portions of that Advisory were improvidently issued. The first two paragraphs of that Advisory are hereby rescinded.

I considered a career in law enforcement – worked with law enforcement off and on over the years and admire the young men and women who seek a career in law enforcement because they want to help people.
I worry myself sick, sometimes, when I encounter young people who go into law enforcement because they want a “power trip.”

We get called to help city, county and state governments from time to time, and when the first Sanford news release was posted I thought – what are they thinking?  I included the Mayor as well as the Chief of Police.

Then, the following day I got that question answered—they were not thinking.  Thank goodness the decision maker’s brain kicked into gear before the community suffered another permanent black eye.

Tuesday, March 20, 2012

Stress Tests for Your Business/Organization

If a "stress test" is good enough for big U.S. banks, why not a stress test for your business or organization?

Three years ago U.S. regulators forced big financial companies to be evaluated with a so-called stress test, which was designed to evaluate if they might fail or come close IF the stock market dropped 50%, or home prices sank another 21% or the unemployment rate hit 13%.

I am not suggesting your business or not-for-profit be measured against those standards, but I am suggesting the leaders of most organizations make a list of the kinds of things that have gone wrong among their peers and competitors and then ask themselves, "if that happened to us could we survive?"

If any of those things happened to us, are we prepared?  Do we know what to do (and not do) to get through and return to a "new" normal?

Some experts call what I'm talking about a risk assessment.  We at the Institute for Crisis Management call it a vulnerability study.  Stress test, risk assessment, vulnerability assessment -- they are all basically the same thing.  What can go wrong?  What would we do if it did?  How would we react?

What would our customers/clients/patients, suppliers, financial sources, employees and their families think, do, say, react?

No organization or business is immune from a crisis or disruption of operations or services. 

If you have not anticipated all those things that can go wrong and practiced with a plan to manage all of those possibilities, you may be gambling about your future, and if you face the facts, gamblers lose more often than they win.  Remember, the game is designed for the "house" to win more often than the folks like you and me.

Here at the Institute for Crisis Management, one of the services we offer is a custom Vulnerability Study to look internally at what could go wrong as well as a review of our Negative News Crisis Data Base, usually for the past ten years, to see what kinds of organizations like yours have faced crises and how well they responded publicly, if at all.

Call for details and the cost.

Thursday, March 15, 2012

A Perceptual Crisis Cost Goldman Sachs $2-Billion So Far

A company doesn't have to do anything wrong to pay dearly for a disgruntled employee.

It costs about the same, or more, if the company actually does something wrong and gets called out by a disgruntled employee.

This week a disgruntled former executive director at Goldman Sachs submitted an op-ed piece to the New York Times....claiming the "environment" at Goldman Sachs is as "toxic and destructive as I have ever seen it."  Greg Smith (no relation) joined GS right out of college and most recently was responsible for the company's U.S. equity derivatives business in Europe, the Middle East and Africa.

Diane Schwartz, my friend and PRNews Publisher and Blogger wrote yesterday, "what a 'get" for the New York Times, what a forum for Smith and what a HR and PR nightmare for Goldman Sachs."

Couldn't have summoned it up any better.

Except today, we now know that in just over 24-hours one disgruntled, former employee has cost Goldman Sachs about $2-billion in market value. The bank's shares plummeted 3.3 percent in trading Wednesday in the wake of the NYT's op ed article.

Now, it is important to remember that Goldman is not a "bank" the 99% keep their savings and checking accounts in.  It is an investment bank that offers services to its clients that most of us could never afford nor understand.

There are some crisis management steps the company should be taking to reassure internal and external audiences that the former director was just an unhappy former employee -- if that is all there is to it.

However, the former banker and his venue, the New York Times, have left some bruises. He talked about the "decline in the firms moral fiber" and claims bank officials referred to their clients as "Muppet's"

Every organization, even mom and pop businesses, are subject to an unhappy employee now and then. The first thing good leaders must do is keep their door and ears open to those unhappy workers BEFORE they go public and try to fix the problems rather than force a potential trouble-maker out.

A Bizarre Crisis

At the Institute for Crisis Management we maintain there are four types of crises you will experience at some time in your career.

1. Sudden Crises -- fires, explosions, natural disasters and workplace violence

2. Smoldering Crises -- two thirds of all crises are the smoldering type -- they start out small, usually internal, but not always, and they are the kind of things someone should recognize as a potential problem and either fix them or report it to someone who can.  You can plan for both of these types and even if you can't prevent them, you can be prepared to minimize the damage of each type.

3.  Perceptual Crises -- the classic example is the old Proctor & Gamble corporate logo that included a half-moon and some stars.  Every few years someone would look at that logo and declare it was a symbol of devil worship and try to organize a boycott of P & G products. 

4.  The fourth crisis type we call the Bizarre Crisis.  You cannot plan for nor anticipate a perceptual or bizarre crisis but you still have to manage them when they rear their ugly heads.

Today, there is a report from New York City about a bizarre crisis.

An 88-year-old woman was on her way to visit her daughter in another part of the city, and was on the escalator at the Long Island Railroad Lindenhurst Station when she fell and her clothes became entangled in the escalator mechanism and asphyxiated her.

You might argue that the Railroad should have anticipated such an accident, but it is still an unusual disruption and has already triggered negative national media attention and most certainly will result in a lawsuit.

Monday, March 12, 2012

It's Never Over 'til the Judge Sings

It's been five years since Seung-Hui Cho went on a killing rampage shooting 32 Virginia Tech students and faculty before killing himself.

And last week a jury was impaneled to hear testimony in a civil trial brought by parents of two victims.  The two families allege in their "wrongful death" lawsuit that Tech administrators were slow to alert students of the first killing on campus and their lawyers painted a picture of campus police as "plodding" and inexperienced.

In their opening statements the plaintiffs' attorneys criticized school administrators for waiting more than two hours before warning the campus a gunman had already killed two women and was thought to be still on campus.

I can't think of a better example of how a mismanaged "crisis" can haunt an organization and its leadership for years.

Doing the right things from the beginning is often difficult, but failing to do the right things from the beginning costs more and costs more for a long time.

If Tech had an operational crisis plan in place, and had practiced with it, and also had a communication plan and practiced with it, this month's lawsuits might never have been filed, and some if not most of the victims would not have died that day.

Thursday, March 8, 2012

Can You Guarantee Clients/Customers Their Information Is Safe With You?

A new study confirms what we should have known all along -- data security and privacy can make you or break you.

A just released Edelman study, "Privacy and Security: The New Drivers of Brand, Reputation and Action Global Insights 2012" underscores the belief that people all over the world are worried that their personal information is not properly protected and that is a significant motivator driving where they shop and who they do business with.

Edelman's study says people around the world are reluctant to do business with any company they think may not keep their personal information or "data" safe.

46% of respondents said they would avoid or leave a company that had experienced a security breach.  Many said they would quit a company they trusted, if/when they learned of a data breach.

Americans tend to be most loyal to companies they like, but one in two said they would likely take their business elsewhere if their first choice had a data breach.  For those who didn't really have any loyalty to a specific company, 70% said they would not hesitate to go elsewhere, after a loss of personal information or other data.

Shopping and banking are two businesses that people want to trust, but only 69% trust financial institutions to protect their personal information. Only 33% trust on-line retailers to protect their information.

Thursday, March 1, 2012

Costa Crociere Is Already Paying For Latest Crisis

With two disasters on two cruise liners in less than six weeks, Costa Crociere, a subsidiary of Carnival Cruise Lines, and the largest business of its kind in Europe, had already lost more than a third of its anticipated bookings after the Costa Concordia ran aground, killing at least 32 passengers and crew January 13.

Then, this week, an engine room fire left more than 600 passengers and 400 crew members adrift in the Indian Ocean with no electricity, no running water and no hot food.

Lawsuits and negative public relations are swirling around the company, which, so far, has mismanaged both incidents -- blaming the first on the captain and failing to be forthright about the conditions on the ship in the second case.

Industry experts are already speculating that Costa Crociere could face a troublesome future if it doesn't change its name or get a lot of help from its parent company in the U.S.

The lesson for all organizations is simple:  you can survive and recover from even a terrible business or organizational disruption, IF you respond quickly, effectively, with empathy for employees and customers/clients, and take responsibility for what happened and be honest about it.