Ono the Ostrich CRISIS MANAGER
The Internet Newsletter about Crisis Management
Editor: Jonathan Bernstein

"For Those Who Are Crisis Managers,
Whether They Want to be or Not"

ISSN:1528-3836
2010 Jonathan Bernstein

Volume XI, Number 01
January 5, 2010

JUST A THOUGHT

What have you sworn will "never happen" to your organization?  


FROM THE EDITOR


Happy New Year to my readers worldwide.  I know that we, as crisis managers, will be at the center of the changes taking place globally in response to the loud *POP* which occurred after leadership ostriches everywhere finally started to pull their heads out of...wherever they were.

To start off the year right, I am pleased to bring you two main feature articles and a short one of my own.

Our first feature, from Mike Kerwin of Levick Strategic Communications, braces organizations for increased governmental scrutiny in the wake of corporate and other human-made crises in almost every nation.  While the specific types of investigations may vary from country to country, Mike's lessons are fairly universal.

I then give you an article about how focusing on what seems mundane, mobile device security, can prevent crises - always the lower-cost alternative.

And finally, Checkmate Public Affairs' Jeff Chatterton gives us a brilliantly candid list of 10 "hidden" ways you can engage in effective crisis prevention this year.

As always, if you like what you see -- please, share it with others and tell them to subscribe!        

BCM

My best to all,

Jonathan




LESSONS FOR PUBLIC AFFAIRS AND COMMUNICATIONS IN 2010
Mike Kerwin

Global financial crisis, high-profile recalls, and climate concerns were only a few of the issues that fueled unprecedBCMented consumer and investor anger in 2009. It's all but a foregone conclusion that legislators, regulators, and attorneys general will seek to leverage this prevailing public sentiment into messaging opportunities during what promises to be a contentious midterm election season. Companies that are unprepared for the spotlight could find 2010's branding challenges even more formidable than 2009's.

 

Here's a brief primer on how best to deal with the three most likely sources of government scrutiny in 2010:

  

Congressional Investigations

 

Congress directly reflects public opinion - and the public forgives mistakes if trespasses are owned up to and a commitment to righting wrongs is made. So remember:

 

  • Be transparent. If you have nothing to hide, prove it by ensuring that legislators and their staff have full access to any materials or people they deem significant to the investigation.
  • Seek a partnership with Congress on any practical steps that can be taken to solve the problem - and talk about such possible collaboration during the committee hearing, when the whole world is listening.
  • Transform the ordeal into an opportunity. If the company has a good enough story to tell, an appearance before Congress could reinforce its brand or provide a forum to more broadly disseminate its messages.
  • Never let reporters see you sweat. During the impromptu news conferences that take place in the halls of Congress, be cordial to the reporters and as supportive of the committee members as possible.

The experience needn't be about avoiding punishment. It could be all about showing leadership.

 

Regulatory Investigations


The decision to play or not play offense is particularly critical when companies grapple with public exposure during regulatory entanglements. On the one hand, the company must protect its reputation. On the other hand, every press release, media interview, and blog post can alienate regulators at a point in time when it might still be possible to minimize fallout from their investigations.

 

An offense communicates strength and confidence in your position. A defense buys time, allowing you to cooperate with regulators and perhaps earn their trust.

What factors should drive the choice?

 

  • First, a crisis team must do risk/benefit analyses at every juncture, all the more because the decision to stay on defense or go on offense determines every subsequent tactical action. Should you talk to the newswires? You will reach the broadest possible audience, but you won't be able to control what they write. Should you limit your offense to your own blog and thereby maintain control? You will indeed stay in control, but you may be perceived as proportionately less credible for doing so. 
  • Second, it's not just a question of the fact patterns underlying your particular situation. To make the decision for defense or for offense, you also need to understand who the regulators are and what they really want to accomplish. Understand that the professionals who staff these agencies are as talented as anyone in the private sector. As lawyers, they're probably equal to your own legal counselors. The regulators also believe in what they're doing. They believe they are helping the public, which can make them all the more resolute.

Attorney General Investigations

 

Of all the authorities with the power to publicly scrutinize corporations, state Attorneys General are some of the toughest customers. Their investigations have the potential to combine the brand-threatening grandstanding of a Congressional inquiry with the legal liability presented by a regulatory inquiry or criminal trial.

 

For companies with a national customer base, 49 other state AGs may jump on the bandwagon after the first investigation - lending credibility to the government's case in the eyes of key stakeholders, putting the company on the defensive from the outset, and multiplying potential losses. The need for coordination between legal and communications professionals is nowhere so critical as here.

 

The first order of business is to define the company's strategic objectives. Decide on what the "win" is - and then plan from there. Circumstances may change that objective, but begin with some notion of whether success will mean full vindication or a deal you can live with.

 

Companies that choose to take the gloves off should consider the example of Ken Langone - Home Depot co-founder and former head of the New York Stock Exchange Compensation Committee - who was targeted by Eliot Spitzer for allegedly misleading board members about pay package of NYSE CEO, Richard Grasso. In his public self-defense, Langone highlighted the political aspirations of his nemesis. It played well with important financial market audiences, who knew exactly what Langone was talking about. The claims against Langone were dropped not long after and his reputation remains largely intact.

 

For companies that choose to cooperate, they must do so with an eye toward reputation benefits and losses. When current New York Attorney General Andrew Cuomo brought charges against Facebook for allegedly failing to protect minors online, the result was a partnership between the AG's office and the embattled social networking site that resulted in what has been called a "new model" to protect children online.

 

You need to weigh the personal agendas and proclivities of each state AG before deciding if and how a Cuomo handshake might differ from a Spitzer handshake. In this case, Facebook set an industry gold standard, which would not have come about but for the AG's actions and the company's temperate response

 

Mike Kerwin is a Senior Writer at Levick Strategic Communications and a Co-Editor of the High Stakes™ newsletter.


PREVENT CRISES BY
PROTECTING YOUR MOBILE DEVICE

Jonathan Bernstein

What type of highly confidential information do you store on your mobile device?  Contacts who would hate to see their information shared with spammers or identity thefts?  BCMPasswords?  Photos or videos you or others wouldn't appreciate appearing on YouTube?

It's an odd quirk of human behavior that we will put certain types of information under lock and key and password at home or office, but then make the same information easily accessible to anyone who steals (or finds) our phone or other mobile device.  I have helped more than one organization respond to crises which originated with such thefts.  And while some types of crises aren't preventable, these situations are, usually employing simple-to-implement measures.

Take my Blackberry Tour, for example.  By using the built-in password protection system, I can prevent access to the phone and my data.  If someone fails to enter the correct password a preset number of times, all my data is wiped!  I can restore it 100% from my corporate Enterprise server (and even a private Blackberry user could restore from their backup), but a thief could not unless he/she could quickly guessed my password.  Are there hacks around this system? Probably.  But most thieves wouldn't have that level of sophistication.  I set up my Blackberry so that it defaults to "password required" mode if it has been turned off or if haven't used it in an hour, but there are other options.  Even if the device is in password-protected mode, it can receive incoming phone calls and can be used for one type of outgoing phone call - to emergency services (911 in the United States).

There are built-in and/or inexpensively purchased protection systems of this sort for literally every type of mobile device.  Is entering a password a slightly-time-delaying pain in the ass?  Sure.  But it doesn't cause nearly as much pain as dealing with the aftermath of stolen confidential data.

I recommend strongly that every organization whose employees use their mobile devices for business purposes require that those devices have some means of protecting confidential information in the event of theft or loss.

Comic Postscript: I know how well my Blackberry's protection system works because, shortly after getting this phone, I forgot the password I'd set up.  I knew my data would be wiped if I kept mis-entering, so I called for tech help with one password try left to see if there was a workaround.  I was told no, the system is hard-wired for the protection of the owner.  So I tried one more time and *POOF*, all my data went bye-bye.

10 Ways to Sink Yourself in 2010
Jeff Chatterton

Why do I call them "hidden" ways? It's simple - chances are good you've never thought about them.BCM

I'm working with a client today that had their office broken into.  Despite being under lock and key, three laptops were stolen, and along with them, confidential information on over 8,000 customers.  It's truly a case of "bad things happen to good companies."

My client is a victim, yet they are now spending a lot of money to inform eight thousand people their identity is at risk.  Not only is this a huge financial hit short term, the long term consequences have yet to play out.  Will they lose customers?  Not if I can help it.  But needless to say, my client is not having a great day.

My role is to step in and stop the bleeding, and turn things around. We're going to do it - at the end of the day, this will be a fantastic opportunity to reinforce customer trust and confidence.  But it's a lot like a forest fire.  Sometimes, a forest fire is a good way to kickstart new growth.  Sometimes, despite the best intentions, you end up burning down entire communities by accident.  No one wants to see that happen.

Since a new year brings new challenges, I thought I'd compile a list of ways you can have a really bad public relations day that you probably haven't thought of - yet.  Since it's 2010, I'll come up with ten (and only ten, as opposed to 2,010!)  Each are conceivable, real life situations that happen every day... and yes, each are easily solved if you've prepped for them in advance.  But have you?

1.   Watch your competitors burn with glee (aka 'afflicted competitor syndrome)

When "Balloon-Boy" Falcon Heene was dominating the CNN feed one afternoon last fall, I received a phone call from one of the largest manufacturers of ballooning equipment in North America.  Obviously, this manufacturer had NOTHING to do with the Heene family... that contraption was entirely home-built.  Nevertheless, by the time I received a phone call, the company had received over fifty (!) media requests for interviews.

If your competitor does something dumb, don't assume it reflects ONLY on them... especially if you share a territory, a technology or a customer base.  No matter how awful your competitor is, their bad day can quickly become yours as well.

2.   Don't Sweat the Small Stuff

The Challenger blew up because of a bad o-ring.  Maple Leaf staged a multi-million dollar food recall because a knife wasn't properly cleaned.  If you discover 'little things' going wrong, the easiest way for that little thing to become a full blown forest fire is to ignore it.

3.   Short-Sell Stupid

Look - if it's dumb, chances are good you've done it.  I know I have.  And if you're so clumsy in real life, why do you expect your employees to be better?

Who's job was it to clean that knife at Maple Leaf - and does it really matter?  Did Domino's plan for one of their employees to pick their nose, sell it with a pizza and capture it on YouTube?  Of course not.  Can you guarantee one of your customer service reps will never swear at a customer?  Of course you can't.

People can be inherently stupid.  Planning for that isn't insulting - it's just good corporate practice.

4.   A rising tide can lift all boats.  An ebbing tide... well, don't ask.

Imagine being in charge of a high-tech start up three months before the tech bubble burst in the early 2000's.  Or how could you manage Investor Relations for ANY publicly traded company between October and March of last year?

Did you do anything wrong?  No, not really.  Does that matter to the investors who want to turn your annual report into toilet paper?  Not one little bit.

5.   The Golden Competition (aka the OPPOSITE of   afflicted competitor syndrome)

I try to avoid partisan examples, but look at  the Republican National Committee.  In one year, their competition a) swept Congress b) won the Presidency, and c) won the Nobel Peace Prize.  If you're in charge of communications at the RNC, that's a solidly bad year.  What did the RNC do to deserve all of that?  It doesn't matter if they deserve it or not - it's happened.  And as a result, it's a tarnished brand.

Obviously, time heals all wounds, especially in politics... but it's not a huge leap to ask, "Has this happened to me or my brand in the past year as well?"

6.   Assume you're Secure

Look at the example at the top of this page.  My client is spending a small mint to potentially infuriate 8,000 of their best customers - because it's the right thing to do.  Those three laptops were behind two locked doors and chained to their desks.  It didn't stop the criminals.  Whether it's a hacker, a careless employee or downright negligence - how can you prepare for having your dirty laundry aired in public?

7.   Assume your People are Happy

I'm always cynical about claims, "our people wouldn't do such a thing" or "we have the best employees in the world."  Keep in mind - I'm self employed for a reason.  I have a simple prism... I am a good, honest and loyal person.  And if I don't want to work for you, why would anyone else?

Why on earth do you think your employees are happy?  Have you asked them?  Have you asked them... lately?  Have you honestly asked them what you can be doing better?  Try a simple question:  "Would you leave this company tomorrow if you had a similar opportunity?"  You may be shocked at the results.

Companies that ignore their own people deserve what comes from 'that.'  And typically, 'that' is never a good thing.  Damaging headlines... strike action... regulatory reviews... government inspections... Chances are good they were instigated by a disgruntled employee.

Which means, as the employer, you really have no excuse not to have seen that one coming.

8.   You Don't Know what You Don't Know

The stories are legendary... Chrysler had to rebadge the "Lacrosse" in Quebec because in French, it's a synonym for masturbation.  In Spanish, the Chevy Nova translated to "Chevy doesn't go."   Tropicana pulled their packaging after forgetting to ask it's customers if they liked the new design.

Whether it's cultural sensitivities, regional disparities, religious differences or accidentally using the logo of the wrong local sports team, screw ups happen.  Sometimes you can't prevent it - no one knows everything.  But how do you repair the damage after it occurs?

9.   Acts of God or Terrorism

Some mistakes you ought to have seen coming.  Not having a response is simply bad judgement.  But then - some mistakes are more than mistakes.  They're called crises.  Fire, accidents, explosions, shootings... unfortunately, none of them are unrealistic.

Here is an inescapable truth:  The fact you were targeted by tragedy does very little to influence public opinion.  How you respond to that tragedy means just about everything.

10.Guilty by Association

Do you know where your raw materials come from?  Have you visited their warehouse?  Have you ever wondered WHY their quote was cheaper?  In an era of 'sustainability,' accusations of sweatshop labour or environmental sins can have damning consequences.  The list of accused organizations reads like a Fortune 500 list - Apple Computer, Nike, Wal-Mart, even Kathie Lee Gifford.  It's simply not enough to make sure only your own house is in order.

Here is an inescapable truth:  The fact you were targeted by tragedy does very little to influence public opinion.  How you respond to that tragedy means just about everything.

How are you prepared?

Jeff Chatterton is owner of Checkmate Public Affairs in Ontario, Canada.  He's a former journalist with extensive experience in governmental positions, and is fond of provoking thoughts such as "The truth is not always easy.  Truth is not simple.  Truth can be shouted out, picketed down, over-regulated or ridiculed...but it can, and should, persevere."  Contact: info@checkmatepublicaffairs.com.


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GUEST AUTHORS

GUEST AUTHORS are very welcome to submit material for "Crisis Manager." There is no fee paid, but most guest authors have reported receiving business inquiries as a result of appearing in this publication. Case histories, experience-based lessons, commentary on current news events and editorial opinion are all eligible for consideration. Submission is not a guarantee of acceptance.


ABOUT THE EDITOR & PUBLISHER

JonatJB Headshothan Bernstein is president of Bernstein Crisis Management, Inc., a national crisis management public relations agency providing 24/7 access to crisis response professionals. The agency engages in the full spectrum of crisis management services: crisis prevention, response, planning & training. He has been in the public relations field since 1982, following five-year stints in both military intelligence and investigative reporting. Write to jonathan@bernsteincrisismanagement.com.



LEGAL DISCLAIMER

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In This Issue
Just a Thought
Lessons for Public Affairs & Communications in 2010
Prevent Crises by Protecting Your Mobile Device
10 Ways to Sink Yourself in 2010
Quick Links