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Reputation risk

Tony Jaques - Crisis ProofingWhey 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

 

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London

The web is now the medium of choice for campaign groups like Greenpeace, Oxfam and the WWF to raise funds, expand their networks, and mobilise supporters. Little wonder: online pressure played no small part in Shell exiting its longstanding partnership with Lego, Nestlé reconfiguring its palm oil supply chain, SeaWorld halting its breeding of captive orcas, and the collapse in shark fin consumption in Hong Kong. Then UK Culture Secretary Jeremy Hunt admitted that online pressure had ‘significantly influenced’ his decision on the Rupert Murdoch’s 2010 bid to take full control of BSkyB.

finishedwithfins

 

But it is not just the big campaign groups that have benefited. Once the preserve of students, tree huggers and political dissidents, activism is now the opium of suburban housewives and white collar workers across the world. It is particularly evident in the huge popularity of online petition sites:

  • Change.org counts over 140 million members in 196 countries
  • Avaaz boasts some 43 million members in 194 countries
  • Care2 has almost 35 million members
  • A UK member of parliament recently told me she receives dozens of emails every day supporting various causes from the 3 million+ members of 38 Degrees, all of which she feels compelled to respond to.

People power has never felt so real, or so daunting. And in an age in which business is increasingly expected to play the role of a concerned and actively engaged ‘citizen’, the numbers involved and the sheer unpredictability of public opinion raises real challenges and risks, as firms supporting ostensibly mainstream causes have discovered.

Drawing on discussions and interviews with Greenpeace, the WWF and high profile individual activists, I argue in my book Managing Online Reputation that online activism is now mainstream, activist networks are becoming more amorphous, and campaign groups are deliberately making their lines of attack less predictable, before going on to detail three current and emerging strategies and tactics used online in the ongoing battle for public support.

The relevant chapter – on the social and environmental threats of the web – is now available online as a free sample:

 

With propaganda swirling online, a Change.org petition fast escalating and Greenpeace all over your Facebook page, an online activist attack can feel terrifying and remorseless. But while some activist campaigns meet or even exceed their objectives, most fail to convince the public of their merits, or simply succumb to slacktivism.

How you choose to respond requires a close understanding of your detractors’ playbook, a smart reading of the public mood, and an appreciation of your tolerance for business and reputational risk – factors I’ll explore shortly.

Image courtesy of WWF Hong Kong.

 

biz.HK, the magazine of The American Chamber of Commerce in Hong Kong (disclaimer: until recently I chaired its Communications and Marketing Committee) recently interviewed me about how companies should protect and manage their reputations online.

While wide-ranging, the interview focuses on the need to align online reputation activities with offline reputation management, an area many organisations are struggling with.

Here it is (p. 46):

And here it is on Amcham HK’s blog.

 

 

Bangkok

Drawing on my experiences in journalism, government, IPO-ing one of Europe’s top digital agencies, and working at WPP, I had the pleasure earlier this week of talking to early stage entrepreneurs and assorted others at Paperclip Hong Kong about the importance of building trust from the get-go.

The second half of the talk focused on online reputation, specifically how companies should handle threats on the internet and social web and draws on my book Managing Online Reputation. A single negative review, badly handled, can be disastrous for a small company so it is all the more important that business owners have a decent understanding of the many options, tools and techniques available to help them evaluate and respond to common problems.

Here’s the deck:

Hong Kong

Caution, shameless self-promotion: my book Managing Online Reputation launches today.

You might ask – perfectly legitimately – why I have taken the trouble of writing 60,000+ words about something that should now be well understood. Surely it hardly needs saying that Google, Twitter and Weibo make it harder to manage a company’s name and image, opening it to the whims, prejudices and ulterior motives of disappointed customers, aggrieved employees, malicious competitors, enraged activists and recalcitrant algorithms?

pownall-book-0006

Yet it remains the case that many organisations (and individuals) remain unclear how best to insulate themselves from trouble online, and continue to mess up their response when things go public.

It has not helped that there remains a dearth of practical, common sense advice in this area. There are many reasons for this, from a tendency to see social media as a business and marketing Holy Grail while overlooking the hazards of the conquest, to the fact that most existing guidance is written from a social media marketing, public relations, technology or legal perspective when effective online reputation protection and defence is about all of these working together. Things have also not been helped by a cottage industry of  ‘online reputation management’ specialists selling puffed-up search engine solutions.

Managing Online Reputation draws on what I have learned over many years as a communications strategist, PR practitioner and digital marketer mining the seam where communications and reputation, and the internet and social media meet. Accordingly reputation is tackled primarily from a communications perspective – albeit a broad one – and I make no apologies for this: if issues are left to fester long enough they will almost inevitably become reputational – and hence PR – problems and must be tackled as such.

However, to understand more clearly the risks to reputation posed by social media, and to appreciate the many different response options, I talked with experts in fields such as media and IP law, social and environmental activism, IT security, digital forensics, crisis management,  emergency response, social media monitoring, search engine marketing and Wikipedia management.

Given that the social web impacts so many areas of an organisation it should come as little surprise that online reputation is a complex topic. However Managing Online Reputation tries not to over-complicate or over-sell the issue. You’ll find it avoids talk of ‘social media crises’ and other hyperbolic marketing phraseology, just as it makes no grand claims about what the many social media business and listening tools now available can do for you. Rather it looks at social media in a broader context, and offers practical, realistic, common-sense advice in plain English.

It is also intended to be interesting. Sprinkled amidst tried and tested ways to categorise, assess and respond to potential problems online, and detailed guidance on how to develop (or update) your crisis plan, you’ll find vignettes about the culture of smears in China and political protest in Hong Kong, the easy and pungent opium of online petitions, the perils of companies attaching themselves to social movements, and what a black swan looks like online. There are also detailed case studies of companies of all shapes and sizes responding successfully to and recovering from fast escalating negative incidents and bone fide crises.

Here’s more of a taster:

 

More than anything you should come away from reading Managing Online Reputation with the notion that, despite the scepticism in which companies and institutions are held today, and the innate tribalism and volatility of life online, your organisation’s reputation is eminently knowable, manageable and redeemable – as long as you prepare well, keep your head and play it straight.

Managing Online Reputation is available in paperback and as an e-book via Amazon, Barnes & Noble, 800-CEO-READ and other outlets.

You can find out more about the book and how to order it here.

Hong Kong

The contract is fairly standard, my agent confirmed. However, she stuttered, the final clause is most unusual, one she had never seen before. If you find it a problem I am happy to go back to the landlord, she added.

My curiosity piqued, I scanned the document. It seemed a perfectly normal rental contract, with the exception of the following Rider:

It is a condition of the tenancy that inside the premises (address removed), including the immediate external areas surrounding the premises, there shall not be any idol or graven image or any activity relating to the worshiping of idol(s), such as the burning of incense or the setting up of any kind of altar or shrine. If this stipulation is contravened, the landlord reserves the right to terminate the tenancy contract with immediate effect and return the Security Deposit within 14 days as stipulated within Clause 7 of this same agreement.

Being agnostic, I accepted the document in its entirety and thought little more of it.

– – –

Regrettably small things quickly started going wrong, culminating in the washing machine grinding to a halt, at which point I called my landlord. He quickly apologized, volunteered to address the issues and later appeared, a polite, casually dressed mid-30 year old local Hong Kong financial trader who clearly knew his way round washing machines better than I. After a short while the worst of the problems were resolved.

I thanked him and as we made for the door he pressed something into my hand. It turned out to be a small, pink-brown pamphlet extolling an evangelical Christian sect with a UK telephone number and an address in east London. He revealed he was shortly to spend a month devoted to its gospel in Ilford’s leafy suburbs.

And with that he made off into the gloom of the passageway.

– – –

Given his religiosity, why did my landlord add the Rider to the contract? There appear a number of possible explanations:

First, that there is but one God, and that was my landlord’s God, and his God only.

Second, that he figured his tenants, presumably free from being beholden to other Gods, were ripe for persuasion.

Third, that he was trying to discourage mainland Chinese, Indians and other perceived idolaters from renting his apartment.

All three explanations are possible, but the final one seems most likely.

– – –

Some other takeaways spring to mind:

For one, a lawyer friend reckons my landlord had almost certainly broken Hong Kong’s anti-discrimination laws.

Second, being seen to say one thing while doing another has always been, and remains, a sure-fire way to raise hackles.

And third, given the ease with which information and experiences can today be shared, one’s reputation — personal and professional — is a slippery, amorphous entity that has to be carefully managed at all times. Discrimination and inconsistency make it a juicy target.

– – –

I will not reveal the landlord’s name. Such an act seems inappropriate and would hardly be becoming.

However I never trusted him from that moment and moved out at the earliest opportunity.