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Issues management

Crisis Proofing - How to Save your Company from Disaster, by Tony Jaques

Whey protein concentrate (‘WPC 80’) may not be the best known or sexiest product, but it is certainly big business. Deriving from cow’s milk, and a by-product of cheese production, it is used in baby formula, beverages, and a host of food supplements, including for bodybuilders.

Like other dairy products, WPC 80 is susceptible to contamination, the result of which can be deadly when digested. So when Fonterra, New Zealand’s largest company and the world’s largest dairy products producer discovered in July 2013 that 38 tonnes of concentrate had tested positive for botulism, a recall was quickly announced.

The trouble was, later tests by the government found no evidence of botulism and that the recall had been a false alarm. However, considerable damage had already been done to Fonterra, with several countries announcing milk product import bans and the company’s reputation for product quality in severe jeopardy.

The company’s independent inquiry (summary – pdf) into the incident concluded that, among other things, Fonterra was ‘not ready for a crisis of this magnitude’, that there had been a ‘failure to join the dots’ between botulism, infant food products, consumer sensitivities and the firm’s reputation, and that the company’s risk and crisis processes needed overhauling.

Fonterra’s top brass would have done well to have read Crisis Proofing, Tony Jaques’ book on how organisations should reduce the chances of a crisis happening and minimise the damage that may arise should a crisis occur.

While he gives many useful tips on crisis response, including how to navigate legal advice on apologies, Jaques’ background in issues management means his insights and practical tips on the leadership mindset, strategic approach and planning processes that enable companies to avoid train wrecks in the first place are particularly valuable.

In my experience, many companies place undue emphasis on identifying risks (especially, given their slippery nature, reputational risks), at the expense of ensuring their issues management processes work properly – an area Jaques excels in. For example, he lambasts the probability/impact and significance/influence issue prioritisation models as crude and over-simplified and instead sets out a more comprehensive and nuanced proprietary model based on an issue’s Impact, Salience, Visibility, Affectability, Proximity and Profile.

Jaques also takes aim at the reactive and ad hoc approach taken by many organisations to managing issues. Too often, he says, companies are overly focused on recording and tracking risks, and tweaking the identification, tracking and decision-making processes for the benefit of management and risk committees, as opposed to actively working to resolve them in a clear and strategic way. By contrast, his Do-it issue management model (chapter 8) is a model of clarity, practicality and focus.

At the heart of Crisis Proofing is a call for mindful leadership of the top-down variety that can seem contrary to the open and horizontal forms of organisational decision-making pushed by some contemporary management thinkers. Yet, as Jaques argues, effective crisis management demands hands-on, decisive and swift decision-making at the very top of the organisation, and a willingness to learn from mistakes and make changes.

As such, while many of the tips in Crisis Proofing are useful in day-to-day risk, issues and crisis management, the book is especially relevant to those leaders and senior decision-makers directly responsible for their organisation’s strategy, culture and reputation.

It is a book I recommend wholeheartedly.

 

Disclosure: I was asked by the author to review the chapter of Crisis Proofing on social media, and was subsequently provided with a review copy of the book by Oxford University Press. I also discuss Fonterra’s WPC 80 botulism scare in my book Managing Online Reputation

 

Blame Malcolm Gladwell. He managed to make The Tipping Point sound so simple and elegant, a panacea of digital connectors and mavens for just about any kind of communications challenge.

Gladwell talks of the rule of 150 (aka Dunbar’s number): the optimal number of individuals that someone can have substantive social relationships with. The average number of Facebook friends we have? 150! (At least then. Inconveniently since revised to 245 or so).

“Epidemics” he notes “are sensitive to the conditions and circumstances of the times and places in which they occur.” Yet in the rush to make products or ideas viral, the context of how audiences – especially business and governmental opinion-formers – make their decisions often seems to be overlooked.

It is clear that IT decision-makers, for instance, actively share content with each other. However, the most shared types of information remain email and articles from the trade media, according to a recent IDG study. This suggests a relatively narrow scope for ‘digital influence’ in this category.

IDG_ITdecisionmakers2013

And while the Internet and social media latterly played a significant role in Greenpeace’s lengthy and ultimately successful campaign against Nestle (amongst others) over its alleged use of unsustainable palm oil, research shows that the key voices actively shaping online discussions were the specialist and mainstream media, together with ‘traditional’ stakeholders such as NGOs. ‘Digital influencers’ (however these are defined) were notably absent from the conversations.

Understanding the context is critical when designing any communications programme, and especially issues-focused influencer programmes due to the wide range of stakeholders and potential outcomes.

Specifically, you need a good feel for:

  • the topic itself and its drivers
  • the different stakeholder audiences involved and their beliefs/standpoints, informational requirements and potential impact on the issue
  • the most credible and trusted media sources, as well as 
  • the most active online voices, across all stakeholder segments.

Below is a talk on digital influence that I gave at a conference last week in Hong Kong, which makes the case for a contextual and integrated approach to influencer outreach.

Digital/social media play an important role in consumer and business decision-making, to a greater or lesser extent.

Time to drop the term ‘digital influence’ and get back to influence?

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