Managing a full blown corporate crisis is one of the hardest things a communicator will ever have to do. Of course, it’s always been vitally important to protect the profitability and reputation of your organization, but as scrutiny of corporate practice rises, so too does the importance attached to effective crisis management.

Failure to prevent or manage an incident can lead to a loss of your organization’s ‘license to operate’. Interestingly, your own personal brand can also be impacted by your response to a crisis – for instance, we’ve heard from several members that successfully managing a crisis instantly makes a communicator more employable, having navigated a course through heavy fire.

So, both for your organization and for you personally, a crisis raises the stakes like nothing else. With this in mind, CEC spent the last few months learning how the best organizations prevent, prepare for, and respond to major crises. CEC members can check out our new topic center for more detailed guidance, or call our advisory team to discuss your crisis planning.

1. Build a Preventative Culture

Most companies have a contingency plan of some description should something go wrong. But actually using that crisis response plan is a bit like shutting the stable door after the horse has bolted – by then, the damage is already done, and you’re playing a game of damage limitation instead of damage prevention.

What the best do: Employees often have the most practical understanding of the risks that the company faces by virtue of their day-to-day business activities.  Instead of simply telling them how to behave and what to do, try to tap into their knowledge to identify and mitigate risks. Read More »

One of the key activities for communicators in terms of reputation building is stakeholder engagement. Members tell us that they focus heavily on stakeholder engagement activities and are trying to be smarter about it – prioritizing key, influential stakeholders and keeping a pulse on what they are saying about the company. These activities involve not only monitoring for risks and potential issues, but also take the shape of more proactive engagement through thought leadership events, engaging and meeting with industry leaders, and promoting good corporate citizenship efforts.

Currently, most stakeholder engagement is focused around reputation risk management and justifying or positively reinforcing existing reputation activities. Some of the ways in which communicators manage reputation with stakeholders include:

• Stakeholder mapping and monitoring: this involves keeping a pulse on what stakeholders are saying about you, so that you may identify and preempt potential risks. Think of this one as good “housekeeping” to prevent issues or crises from rising. For example, Monsanto utilizes stakeholder-centric monitoring to prioritize issues for specific stakeholder groups. Other companies identify and prioritize reputation risks by mapping “degree of sensitivity to issue” against “strength of company position.”
• Stakeholder conversations and thought leadership: more proactively, communicators identify influencers and discuss issues of concern with them to establish the company as a thought leader in the industry. This is in addition to other thought leadership and executive communications programs. Chevron for example, holds thought leadership stakeholder discussions on important issues to the company.

These tactics are great if you, the Communications team, were the only ones engaging with stakeholders! But more and more it is your business partners and employees who have more frequent interactions with stakeholders.  Adding additional pressure is the fact that the external environment is becoming increasingly complex as stakeholders become more resourceful about how they access information and form perceptions about you.

The problem is that business partners and employees don’t necessarily know all the risks to reputation as they are having conversations with stakeholders, and won’t think through those interactions as strategically as communicators do. Read More »

Managing stakeholder perceptions has always been challenging, but given the growing complexity of the current communications environment, it can often feel like an insurmountable task.  Think about it — as our companies’ business operations continue to change, our customers, employees, and external partners are all becoming far more diverse than ever before.  At the same time, the channels and sources that these stakeholder groups use to consume information continues to evolve.  It’s no wonder that a recent CEC poll Heads of Communications revealed that proactive reputation management was the 2^nd overall priority for 2012, only two percentage points behind employee engagement efforts.

Given the need to address this important topic, the CEC recently launched its next major research initiative —Building an Outcomes-Focused Reputation.  As part of the study we’ve already spoken with communications executives at several dozen leading organizations to better understand the challenges that they are facing in managing stakeholder perceptions as well as the tactics they use to measure, monitor, and improve and their corporate reputations. (Take our 2 minute Quick Poll and tell us what you’re doing to manage your reputation!)

Current Approach:

Faced with increased stakeholder scrutiny and fickle audiences, most companies are focusing on building their company’s reputation by turning up the volume on positive messages related to their organization.  Read More »

As a former journalist, ohhhhhh how I HATE media hyperbole. Don’t you? Every bad weather system that’s described as (this year’s) Storm of the Century…every one-day drop in the stock market that has investors reeling…every tragedy that forces local residents to rebuild the shattered pieces of their broken lives. Uhhhhhhgggh.

When I think about what’s become of the news business, I don’t know whether to laugh, cry or go out on the front lawn and start eating grass (isn’t that what animals do when they think they’re about to barf?).

But I gotta say — although you may already be getting a little queased-out from the relentless coverage of this Joe Paterno/Penn State story — for once, this ain’t hype.  This really is the biggest scandal in sports history. More than just another ringing bell for the Pavlov’s Dogs of Media to salivate over, this is a cautionary tale for EVERYONE in a position of authority at any big organization in the world.

Here’s a strong recommendation from your friends and colleagues at CEC: Use this moment as an opportunity to have an important discussion with your CEO.  Particularly if he (90+% chance it’s a he) is a football fan (gut guess on my part = there’s a 75+% chance he at least likes football).

All you have to do is ask him, “So, uhhhh, whadda ya think about the whole Paterno mess?”, then sit back and let him spew. Whatever he says next will enlighten both of you about his understanding of “the way things work” in today’s media environment.

Chances are you’ll get one of three responses: Read More »

Building a Bank of Goodwill

Financial advisers often emphasize the importance of building a personal emergency fund.  What they’re referring to is a rainy day fund, consisting of a certain amount of money (e.g., 8 month’s salary) which can be drawn down during tough financial times.  Should you lose your job or get slapped with an unexpected major expense, you could rely on these savings to help you weather the financial storm.

In the communications world, a similar concept exists with regard to an organization’s reputation — this is the concept of the “bank of goodwill”.  Much like your rainy day fund, the idea behind the bank of goodwill is that companies can stockpile their reputation assets when times are good and lean on them as a buffer from negative stakeholder perceptions when times turn bad.

On its surface, the concept seems plausible.  After all, in the financial savings example, few would argue that having extra money in the piggybank wouldn’t give you some degree of financial breathing room.  But whereas money can be universally spent on a wide range of goods and services, perceptions are complex, specific to each stakeholder group, and increasingly fickle.  Additionally, academic researchers struggle to quantitatively prove the theory of the bank of goodwill.  Nevertheless, one need only look to the news for examples of big, well respected companies who have been recently blindsided by massive financial and reputation hits due to crisis or scandal.  I’ve spoken with some of these companies and they’ve all said that, if there is bank of goodwill, it gets exhausted quickly. Read More »

As the world becomes more and more connected by technological innovations, it’s no wonder that communicators have become far less reliant on reactive response strategies. Waiting for a reputational threat to arise before thinking about solutions just won’t cut it. But no matters how fast information spreads, communicators — even those well-armed with response tactics — can only move so quickly.

Communicators are successfully enlisting line manager support in limiting reputational risks by erring on the side of simplicity in developing tools and processes for managers to use. Clear decision rules guiding the frequency, nature and venue of stakeholder interactions — plus making clear when to involve the communications team — line managers can play an essential role in local stakeholder engagement.

Line managers represent a powerful resource in identifying reputational threats as well as mitigating risks through engagement with key stakeholder groups. In companies with widely varying stakeholder groups across many locations, managers are much better suited to handle the basics of local stakeholder relations than a centralized corporate communications team. Leading communicators account for the real challenges in developing line managers as players in stakeholder engagement.

Read More »

Every year, corporate crises hit the news, and remind us of their potentially devastating impact on the reputations of those organizations involved. The UBS tax scandal of 2008, Toyota’s three product recalls from 2009-2010, and BP’s oil spill in the Gulf of Mexico in April 2010 all had two things in common:

• They could all have been prevented
• They did significant damage each company’s reputation, and to their financial performance

With the stakes higher than ever before, CEC is updating its existing work on crisis management. And, with the above in mind, we’re looking at two different angles.

1. Building a Preventative Culture

In spite of the best efforts of companies to apply processes, rules, and expectations, this isn’t always enough to drive behavior change – we’ve all seen rules bent or broken to “get the job done”. And yet, we are reliant upon employees maintaining standards to maintain product quality, information security, legal and ethical compliance, and personal or public safety – if they fail to do so, the consequences for the organization can be disastrous.

Communications Challenges

CEC is looking at some of the reasons that employees don’t always act in accordance with the standards required by their organization, its regulators, and other crucial stakeholder groups. Our conversations indicate that many communicators spend a disproportionate amount of time building employee awareness without addressing the personal and systemic barriers to desired behavior. Indeed, research shows that only 6% of employee-observed misconduct is escalated to business leadership, preventing the business from responding to rectify the problem. We’ve thought about what prevents employees from acting in a way that prevents crises. Here’s our first shot, below: Read More »

Simply hearing the words — CORPORATE CRISIS – is enough to spike anxiety levels and get hearts beating faster.  Crises present severe and immediate threats to organizations, often endangering people’s safety, the company’s financial position, and/or the organization’s reputation.  What’s worse, they typically occur suddenly, sending communicators scrambling to find their firefighting suits before leaping into the flames.

A new survey conducted by CEB’s Corporate Integrity Practice indicates that 76% of corporate leaders reported a recent increase in media attention on corporate crises.   I suspect that this increased scrutiny may not come as a total shock to you.  Whether it’s a media scandal, product recall, or environmental disaster, there seems to be no shortage of crises in the news these days.  Nevertheless, one statistic from the survey really stood out.

51% of respondents reported an increase in corporate crises that can be attributed to organizational lapses (only 6% said they thought this number had deceased).  This number, coupled with the increase in media attention ought to really concern senior leaders. –Why? –  Because the only thing worse than a major crisis situation is a major crisis situation that could have been avoided. Read More »

By Rebecca Canan

Communicators are often regarded as the ones who can put “lipstick on the pig.” Or, as Diane Gilman, Enterprise Communications Global Leader at W.L Gore put it, “perfume on the goat.” We’re often asked to communicate a message that is positioned in a rosier and more sugarcoated version than reality. Do we push it out for the “good of the business?” Or do we take a stand and partner with our business partners to find a truthful alternative. In other words, what is the role of integrity in Corporate Communications?

This question was raised after we received thoughtful feedback on our competency model from Diane. She wondered whether integrity should be one of the core expectations on the competency model. Below you can see Diane’s question and our response (published with her permission, of course – thank you, Diane).  Leave a comment and let us know what you think too.

—–Original Message—–

From: Diane L Gilman

Sent: Tuesday, June 28, 2011 11:51 AM

To: Canan, Rebecca

Subject: Feedback on CEC Skill Development Grid

Hi Rebecca,

Just want to chime in with an observation about the framework and grid.

But first, thanks are due to the whole team. The framework is a solid description of competencies that I believe will resonate with both communicators and business leaders. I intend to use it to start conversations with senior leaders about the communicator’s role, and especially to help lift the mindset that communicators are implementers, rather than strategic partners…

One competency that does seem to be missing is integrity. In my experience, the most effective communicators are those who understand, and can help others see, that the only messages that really work are those that are real. “Truthful, authentic, honest” — you pick the word, but surfacing the truth of a situation is a critical part of the communicator’s skillset. We are often the ones who counsel leaders to be more real in their communications. Too often, communicators have been seen as the ones who can “put perfume on the goat” and use our wordcraft to make messages that shade or even misrepresent reality in tone and/or content.

Read More »

Companies’ engagement with stakeholders on Facebook has skyrocketed in the past year. However, given the open and dynamic nature of Facebook, companies have less control over communication exchange and expose themselves to reputation risks. How can these risks be identified and minimized? How can companies adapt to changing rules of stakeholder interaction on Facebook?

Reputation risks could surface in any form. They could be as simple as an irritated consumer complaint. They could be as complex as a systematic, malicious vendetta against your company stance on a policy issue. Even simple complaints, when left to fester, could result in a reputation crisis.

The absence of well-established laws governing social media communications make it challenging for companies to contest reputation damage on Facebook. However, this shouldn’t stop them from putting a proactive social media reputation strategy  in place. Leading food and beverage corporation, Kraft Foods Inc,. has put in place a 6 pronged strategy to address various kinds of reputation risks on Facebook.

We’ve summarized Kraft Foods’ Facebook reputation management processes in the graphic, below:

Read More »