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Reputation management

Tony Jaques - Crisis Proofing

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 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 models for prioritising issues as crude and over-simplified, before setting 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

 

The New York Times has a good article on Lyft’s public response to Uber’s woes. Or, rather, on the lack of it.

It may be tempting for Lyft, GrabTaxi and other rail-hide companies to kick Uber publicly when it is down, yet at a time of greatly increased scrutiny on Uber, and when the major players face many of the same issues, from fair pay and concerns about driver conduct to driver churn, immigration clamp-downs and widespread skepticism about self-driving cars, gloating or worse is likely to be seen as opportunistic, serve to further alienate key constituencies in government and elsewhere, and risk drawing even greater attention to the industry as a whole.

Nobody wants to be seen participating in a race to the bottom.

As if Uber doesn’t have enough problems, TPG partner and Uber board member David Bonderman’s sexist jibe about over-active women talkers during an all-staff meeting to discuss law firm’s Covington & Burling’s report on harassment and discrimination could hardly have come at a worse time.

To reiterate: Bonderman responded to a comment by fellow Uber board member Ariana Huffington that one woman on a board tends to attract others, by saying ‘Actually, what it shows is that it’s much more likely to be more talking’.

Cue a swarm of angry employees and a smoking gun in the form of a leaked audio file.

To which Bonderman responded publicly:

 “Today at Uber’s all-hands meeting, I directed a comment to my colleague and friend Arianna Huffington that was careless, inappropriate, and inexcusable.

“The comment came across in a way that was the opposite of what I intended, but I understand the destructive effect it had, and I take full responsibility for that.

I do not want my comments to create distraction as Uber works to build a culture of which we can be proud. I need to hold myself to the same standards that we’re asking Uber to adopt. Therefore, I have decided to resign from Uber’s board of directors, effective tomorrow morning.”

He also apologised direct to Huffington and emailed Uber employees:

“I want to apologize to my fellow board member for a disrespectful comment that was directed at her during today’s discussion. It was inappropriate. I also want to apologize to all Uber employees who were offended by the remark. I deeply regret it.”

Recode’s Kara Swisher lambasted Bonderman’s apology and refused to ‘include it [in her coverage] because he does not deserve it in any way’.

I beg to disagree.

Too often, apologies fail to hit the mark as they are seen as naked attempts to dampen down criticism by blaming others’ interpretation of your actions or words, or some other well-trodden form of non-apology apology (of which there are several).

Bonderman deserved the opprobrium. At a minimum, his words were insensitive and showed poor judgement. Yet he saw the error of his ways, relinquished his position on Uber’s Board and apologised quickly, directly and sincerely.

It is a mea culpa that deserves to go a long way towards healing the wounds.

 

 

 

 

 

 

 

 

London

I was recently asked by Strategic RISK Asia magazine for my thoughts on the reputational threats arising from employees use of personal social media accounts. I was glad to share my views as it is a topic that comes up regularly with clients and prospects. It is also one I explored in my book Managing Online Reputation.

Below is my full response to the journalist; the published article is here.

SusanAFowler_Uber

Which risks are created for firms from employees’ personal social media accounts?

Research consistently shows the top risk of social media to companies is damage to reputation. Rank-and-file employees may be seen as the most trusted sources of information on, and credible advocates for an organisation, yet the flip side is equally true: inappropriate, offensive, unethical or defamatory behaviour by those seen as the most authentic embodiment of a company has a nasty habit of spilling into the broader public domain and bringing their employer’s name and image into disrepute. 

Understandably, much of the focus concerning employee social media profiles is on internal threats. However, companies underestimate the external risks associated with these accounts, notably the increased risk of social engineering to access personal and/or company information, and greater opportunities for identity theft as a way to embarrass an individual – and perhaps their employer – in public.

Which types of posts from employees on personal social media accounts are the most damaging (political statements, unprofessional conduct, criticising the company etc.?)

The degree of damage depends on factors such as the nature of the post, the resonance of the topic, the credibility of the employee, whether the post is seen as accidental or deliberate, and the visibility and reputation of the company. It can be particularly damaging if it is seen to involve confidential or highly sensitive information, racist, sexist or discriminatory comments, the harassment or smearing of colleagues, customers or competitors, or which point to corporate hypocrisy or double standards – all of which will quickly attract negative coverage and can result in legal action, financial penalties, or lost sales.

Much hinges on the local political, social and media context. For example, political and social online activism across Asia is less widespread but certain topics are guaranteed to raise hackles and with civil society gaining ground and personal online activism on the rise, a loose statement can prove immensely damaging. And while smears are commonly regarded as below the belt in the west, in China and elsewhere there is a pervasive culture of trashing other individuals, companies and just about anything and everything else, many of which are surprisingly overt. Many die at birth, but others take on a life on a life of their own if the employee is trusted. It often also helps if the target is western.

How can firms mitigate these risks? Is employee training necessary, or does it need to go further into rules in contracts and disciplinary action?

The blurring of employees’ personal and professional lives online presents a tricky challenge for any organisation. While some companies continue to limit workplace access to social media, or to personal social media accounts during working hours, most accept that the great majority of their people have a personal presence on social media and understand it is unreasonable, and in some countries illegal, to clamp down on or to monitor personal online activities, particularly outside of working hours.

At one level, the risks of rogue social employees can be reduced by having strong values and culture, ensuring good behaviour across the corporate ecosystem, having a healthy working environment and fair compensation, and being open and honest whenever possible. Understanding that there is little to stop aggrieved employees sounding off on employer review sites such as Glassdoor, or taking to anonymous workplace communities like Blind, many companies are also strengthening employee reviews, complaint procedures, and putting in place more substantive and constructive exit interviews.

It is also essential to have strong social media governance, most obviously in the form of a corporate social media policy and a set of guidelines that spell out the expected parameters of online behaviour, highlights the link between poor personal behaviour and reputational damage on the company, and which threatens disciplinary action for breaches of policy. Many companies now refer to or embed these terms in employment, contractor and supplier contracts, and feature them in formal onboarding processes.

Of course, social media policies and guidelines must also be understood and lived, which is where training and communication come in. The challenge is often that these dry, rather formulaic policy documents have many grey areas. For example, is it appropriate for employees to talk about, let alone criticise, their employers’ activities on Facebook and, if so, when and how? Should they respond to third-party criticism of the company on their social profiles, or the open web? Are there any topics employees should expressly steer clear of, even in their personal lives? Should employees be talking up their company’s products on social media and, if so, how? In what circumstances (if any) should an employee use his employer as an online platform for his own personal activities and views? Smart organisations have training programmes that get into these awkward nooks and crannies, bring them alive, clearly spell out the dos and don’ts, and issue regular reminders.

Companies like L’Oreal have taken this educational approach a step further by hand-holding their people personally through the social media maze, showing them the merits and risks of different kinds of social media strategies, platforms and profiles, and teaching them how to segment users, limit access to their opinions and content, and keep their profiles secure. Corporate personal branding programmes not only help employees and their employers protect their reputations day-to-day, they also instil residual goodwill and help reduce the likelihood of alumni disparaging the company once they have moved on.

It would be great to know your thoughts on this necessarily messy and difficult topic. Is there anything you find particularly challenging about employees’ personal social media accounts? And what do you find are the best ways of minimising these risks?

Hanoi

I am delighted to confirm that my book Managing Online Reputation is now available in Vietnamese.

While the mainstream media in the country remain controlled by the government (to an even greater degree than China ), the huge local popularity of the internet and social media and a dwindling appetite for state TV is resulting in greater pressure for institutional accountability and transparency.

As I pointed out in an earlier post, Vietnamese organisations are not used to such scrutiny and have little experience managing issues, incidents or crises in full public view – something apparent in a series of botched responses by household name local institutions to allegations of pollution, market manipulation and so on.

As domestic scepticism broadens and deepens, and as Vietnamese companies start competing more aggressively in foreign markets, local business leaders will have to ensure their organisations are properly equipped to understand and handle a whole new set of customer and stakeholder needs, expectations and behaviours, and for the reputational jabs and jolts that come with the territory, including online.

Hence the need for a Vietnamese version of Managing Online Reputation.

Charlie Pownall - Managing Online Reputation (Alpha Books, 2016)

 

Published by Alpha Books, the country’s top business book publisher, Managing Online Reputation can be found in most reputable bookshops across Vietnam, and online.

London

Part 2 of an interview with a Chinese PR student on crisis communications and social media. Here is Part 1.

3. Does social media impact crisis communications in different ways in Asia versus the UK? Are there any characteristics exclusive to the UK?

In my experience social media can indeed impact crises differently in Asia, and much of this comes down to speed – parts of Asia are very highly networked – and the culture of the web, which can be immensely volatile, especially in a country like China. Compounding matters there’s the fact that customer and stakeholder opinion is evolving quickly across the region, not least concerning expectations about corporate good behaviour and transparency, while government attitudes towards foreign companies, in particular, can be hostile, and control of the internet notoriously uneven. These aspects – and plenty of others – require a close understanding of the context in which you are operating.

Operationally, the main difference is that Asian organisations tend to be more conservative, hierarchical and slow to make decisions, which can make the management of a crisis challenging. And where there is a culture of strong local political control, and a pliant local media, local companies may well have little experience of having to manage serious negative events in public and online – a notable example being Taiwan Formosa and the Vietnamese governments’ inept handling of a toxic spill earlier this year that ravaged hundreds of kilometers of coastline and damaged the livelihood of thousands of local Vietnamese fisherman.

Equally, some multinationals operating in Asia are reluctant to devolve crisis decision-making to their local businesses, resulting in precious time being lost when you need to respond quickly and appropriately at the start. And for the reasons pointed out above, foreign companies must be mindful of throwing the standard western crisis playbook at what may be a very different business, media, political and legal environment.

I’m not convinced there’s anything intrinsically unique about the nature of crisis communications in the UK – at least in a western context – other than perhaps the behaviour of the mainstream media, specifically the tabloid press, which can be very single-minded in their willingness to build up and then attack an organisation, and whose views tend to bleed quickly and deeply into the social web.

See also my Primer on Crisis Communications, which covers similar territory.

London

A resourceful Media and Public Relations student from China at a UK university recently asked me for my thoughts on crisis communications and social media for her dissertation. In the spirit of sharing, here’s the first part of my response – the second on how crisis communications differs in Asia and the west – will be posted shortly.

The questions have been edited for clarity:

1. To what degree is social media impacting crisis communications? How is it changing traditional crisis communications?

Social media has had a significant impact on crisis communications:

  • Most obviously, news and information travel much faster, meaning organisations need to track issues and potential crises more regularly and respond more quickly when something bad happens
  • There is much more misleading and false information to track and consider, some of which is deliberate
  • Online opinion tends to be very volatile and polarised during a crisis, making it difficult to know when and how to try to manage perceptions
  • The lifecycle of crises has become much more unpredictable with so much information constantly swirling online and getting picked up by the mainstream media, and the ease with which confidential information now leaks
  • Perhaps most important, the nature of the social web means people nowadays expect organisations to be open and responsive during a crisis – which may have profound implications for crisis strategy, important at a time when many large organisations are not trusted and when the facts are unclear when a crisis first breaks.

2. What are the advantages and disadvantages of social media on crisis communications strategy?

The main advantages are that, thanks to social media:

  • Organisations now have greater insight into what various different stakeholder groups think about them and behave towards them
  • Crisis strategy and messaging can be tested and revised more or less in real-time, rather than having to commission custom market research surveys
  • Relationships with stakeholders can be handled direct, bypassing ‘traditional’ gatekeepers such the mainstream media
  • Using video, photographs and other tools, it is now possible to communicate factually and, critically in a crisis, emotionally
  • You can involve more people more closely in an organisation’s recovery once the worst of a crisis is over using crowdsourcing and other web and social media-based techniques.

On the other hand, social media presents many strategic risks and operational challenges during a crisis. These include:

  • Organisations have to respond very fast while ensuring their messages are consistent across many channels
  • Then there’s the huge volume of comments and feedback to manage, while knowing what is important and what should be left alone
  • Online opinion and feedback may be skewed, inaccurate and not as insightful or nuanced as conventional market research
  • An analogue leadership team which does not understand digital/social media and can be very jumpy during a crisis, leading to poor decision-making
  • If social media is not treated seriously and strategically, the necessary procedures and skills may not be in place before and during a crisis.

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See also my Primer on Crisis Communications, which covers similar territory: