Author: Jonathan & Erik Bernstein

Protecting your reputation is a prime crisis management concern

We’ve said for years that reputation is an organization’s most valuable asset, an assertion backed up again and again by real-life experience. In his Managing Outcomes newsletter, our friend and colleague Tony Jaques recently shared two real-world examples which directly support this belief. Here’s a quote:

It’s hard to demonstrate beyond doubt that the investment you make to help improve reputation will be consistently rewarded. But there can be no doubt at all that a major hit to reputation will surely damage shareholder value.

That truth was reinforced this month when two high-profile reputational crises took their impact straight to the bottom line.

The first was headline news across the country alleging bribery and corruption at the highest level at the international construction giant Leighton Holdings to gain contracts in Iraq, Malaysia, Indonesia and elsewhere. The result was $700 million, or more than 10%, wiped off the share value in a single day.

While some analysts claimed it was “an overreaction to allegations first aired more than a year ago,” there were further losses the following day before the market stabilised. As BRW columnist Leo D’Angelo Fisher commented: “As spectacular front-page headlines go, when it comes to media coverage of Australian business, this may prove to be the one to beat for 2013, and for some time thereafter.”

There were instant denials and angry letters from lawyers, and there is a long way to run before the truth will be established. But within a week three senior executives resigned and Leighton’s reputation has been hard hit.

The same happened to California “green car” maker Tesla when one of their electric cars ran over debris on the road and a fire began in the battery-pack. Unfortunately, a passerby recorded the blaze and the video went viral, with investors slashing $US2.5 billion, or about 6%, off the company’s value. Once again it was a media-driven reputational crisis, but the video rekindled concerns about the safety of lithium-ion batteries and that concern translated directly into a costly loss of confidence.

Public Affairs Council President Doug Pinkham recently wrote: “Reputation management is an inexact science because running a business is not a controlled experiment. The variables are always changing, and the markets often reward a company one day and punish it the next.”

Tony also shared a Weber Shandwick study, “Safeguarding Reputation,” that determined, worldwide, 63% of a company’s market value is directly tied to reputation, a fact perfectly backed by the two examples above.

Everything, from where you source material, to what you stock on store shelves, to what your employees post on social media, has the potential to impact your reputation. You wouldn’t leave the contents of your bank account unattended, so why would you neglect to prepare a crisis management plan that will help keep your reputation as strong as possible?

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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]

We’ve seen some big changes

The way we do crisis management, and PR in general, has changed so drastically that even those of us who were along for the ride are sometimes astonished. For those younger folk who never knew the non-digital version of what we do, this Inkhouse infographic will really blow your mind:

As you can see, a shift in the tools we use has changed the playing field dramatically!

The change that stands out the most to us is the move toward actively communicating in an open and honest manner. For quite a long time, while it wasn’t smart to lie, it was considered perfectly OK to completely avoid discussing any negative incident and only serve up fluff-piece-type news to reporters via press release. Of course that’s all changed now, and although many orgs have needed to be dragged kicking and screaming into the new era, those who have embraced the modern edict of “honesty, transparency, responsibility” are reaping the benefits.

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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]

Incident demonstrates why Twitter is ideal for quickly spreading information to your stakeholders

When your organization is in crisis, Twitter is now the go-to platform for disseminating information to a wide audience as rapidly as possible. Never was this more apparent than in the wake of the chaotic shooting at LAX airport, where a steady stream of posts went out from the official LAX and LAPD Twitter accounts.

Here’s a sampling of tweets that went out early on in the crisis, compiled by PRDaily’s Matt Wilson:

Crisis communicators took to Twitter after at least three people, including a TSA agent, were shot in Los Angeles International Airport’s Terminal 3 on Friday morning. Local news reported that the suspect was in custody.

The official LAX account confirmed that in a tweet sent around 10:50 a.m. local time:

Suspect is now in custody. Multiple victims. Press conference at 11:30 am at Sepulveda Blvd/Century Blvd w/ Airport Police & LAPD Chiefs

— LAX Airport (@LAX_Official) November 1, 2013

The managers of the airport’s account focused primarily on tweeting information about air traffic and keeping travelers away from the area where the shooting occurred. The first tweet about the shooting went out just after 9:30 a.m.:

There is an incident underway at LAX. Law enforcement is on scene. More information to follow.

— LAX Airport (@LAX_Official) November 1, 2013

By about 10:15, the airport announced a ground stop was in effect and that traffic headed toward the departures area was being blocked by police.

Other than arriving flights, flight operations have been temporarily held.

— LAX Airport (@LAX_Official) November 1, 2013

The airport’s account also tweeted this alert to the news media:

As soon as law enforcement allows, broadcast equipped vans will be allowed to park between terminals 1 and 2 upper/departures level

— LAX Airport (@LAX_Official) November 1, 2013

The Los Angeles Police Department tweeted that the FBI was on hand to help with the incident, a notice that the central bureau was on tactical alert, and a photo of officers on the scene:

#LAPD on scene of major incident at #LAX. #poltwt http://t.co/EUkN5Wtzze pic.twitter.com/9mAguPtcll

— LAPD Communications (@911LAPD) November 1, 2013

There was also this warning to people headed to the airport:

The #LAPD & @CHPsouthern is requesting that the area around @LAX_Official Airport be avoided so resources can be deployed. #LAX #poltwt #CHP

— LAPD Communications (@911LAPD) November 1, 2013

LAX didn’t stop using social media for crisis management after the immediate crisis was abated either. Updates regarding delays or closures, and information to help passengers reach their gates quickly or find luggage left behind in the chaos were constantly pushed out for over 24 hours after the shooter was in custody.

Unfortunately, this situation led to a loss of life, and our hearts go out to those affected. We must give kudos to LAX and LAPD, however, for their efforts in not only protecting, but informing the public, no small task when faced with the stress and confusion that accompany any sudden crisis.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com

Surprising number of states not requiring schools to prepare for disasters

We send our kids off to school every day trusting those responsible for their care are properly prepared for disaster crisis management, but the frightening reality is that most aren’t. Aid group “Save the Children” is working to change that, and as part of their efforts they’ve released a report blasting states across the nation. The AP’s Andrew Miga has more details:

Eight years after Hurricane Katrina, most states still don’t require four basic safety plans to protect children in school and child care from disasters, aid group Save the Children said in a report released Wednesday.

The group faulted 28 states and the District of Columbia for failing to require the emergency safety plans for schools and child care providers that were recommended by a national commission in the wake of Katrina. The lack of such plans could endanger children’s lives and make it harder for them to be reunited with their families, the study said.

The states were: Alaska, Arizona, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Indiana, Iowa, Kansas, Maine, Michigan, Minnesota, Missouri, Montana, Nevada, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Texas and Virginia.

After Katrina exposed problems in the nation’s disaster preparedness, the presidentially appointed National Commission on Children and Disaster issued final recommendations in 2010 calling on the states to require K-12 schools to have comprehensive disaster preparedness plans and child care centers to have disaster plans for evacuation, family reunification and special needs students.

Attention State officials and educators! How many warning signs do you need to see before you understand you’re heading for a catastrophe? How many times can you watch as devastating disasters place students in danger and think, “it won’t happen to us?”

It’s a common trap, and one that costs lives every single year. Your duty as a school or child care center is not only to educate, but also to provide a safe and secure environment for the future of our nation. Don’t neglect disaster crisis management until it’s too late.

The BCM Blogging Team
http://www.bernsteincrisismanagement.com

It helps to stick to familiar ground when it comes to social media crisis management

Our friend and colleague Chris Syme published a blog post last month in which she explained why spreading your social media crisis messaging too thin can be a major problem. This issue seems to pop up most often when organizations attempt their own crisis management without consulting an expert, but there are some in our field who are guilty of taking on too many communication channels in a misguided effort to get word out as well.

This quote from Chris’ post cuts right to the heart of the matter:

Stay within your established platforms. This is the most important guiding principle to remember. For instance, if you have a Facebook page, a Twitter account, a YouTube channel, and an Instagram account, stick to those channels when planning any kind of crisis responses. This is where your fans are and this is where your detractors will want to voice their opinions.

There are several reasons for doing this but the most obvious is that a crisis is not the time to build an audience or plan strategy for a new channel. Objectives are different in a crisis than in everyday social media. Your goals should be two-fold: reach the widest audience and enlist advocates who will help you spread the message. Second, every channel you post on, you have to monitor. Think of your resources, personnel, and time. Third, you don’t have to answer every negative post that pops up on every channel. You’ll be playing whack-a-mole. Stick to the channels where you have established a fan base, and enlist your advocates to help you amplify your message. Use scheduling and amplification tools, but don’t try to build a presence on a new channel during a crisis.

From a crisis management standpoint, the major reason we encourage clients to establish a presence and stay active on social media is to A) create an active communications channel which has a publicly viewable history of your attitude and actions, and B) build the cushion of goodwill that Chris refers to when she says, “Stick to the channels where you have established a fan base, and enlist your advocates to help you amplify your message.”

While there is no set formula for determine the best channels to utilize, we suggest you ask the following questions:

1. What medium will best reach the client’s stakeholders?
2. What medium currently features negative information about the client?
3. Where do you already have active advocates and a cushion of goodwill established?

Just going through this short list should seriously narrow down options for almost every crisis situation, freeing up valuable resources, and, even more important when you have a breaking crisis, TIME, to handle business.

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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]

Belatedly thwarting a grade schooler’s scheme is nothing to gloat about

Most American airlines have been struggling to maintain any type of positive reputation for years now. With many of the most rage-inducing issues, like long security lines, beyond their control, you would think they’d be taking pains to ensure their own processes are working like clockwork. Speaking of, with the amount of focus that’s been placed on protecting our commercial planes since 9/11, shouldn’t we be able to expect airlines to stop a passenger from boarding without a ticket?

After reading this quote from Minnesota’s KARE 11 news, you’ll be asking the same question we were – hey Delta, are you smarter than a 4th grader?

Despite numerous checkpoints and gate agents, officials at Minneapolis/St. Paul International Airport say a 9-year-old was somehow able to sneak through security and onto a Delta flight headed to Las Vegas.

“At this point, this is a Delta and TSA issue,” said airport spokesperson Pat Hogan. “This is a rare incident.”

The security mishap occurred Thursday on Delta Flight 1651. It wasn’t until the plane landed in Las Vegas that the boy was stopped and questioned.

MSP officials say they’ve reviewed security footage and at this point do not believe he was carrying a boarding pass.

Delta’s statement after the incident was less-than-impressive from a crisis management standpoint, with more of a focus on self-congratulations than apologizing for allowing a potentially devastating gap in security:

“Delta continues to work with authorities and look into the circumstances involving an un-ticketed minor boarding an aircraft in Minneapolis-St. Paul. We commend the flight crew of flight 1651, whose vigilance and awareness of the cabin led them to proactively alert authorities to the situation prior to the aircraft landing in Las Vegas. Safety and security are always Delta’s highest priorities and we are reviewing our policies and procedures to make sure something like this does not happen again.”

Where was an apology to the boy’s family? Where was the red-faced spokesperson who should have stood in front of a camera and said, “We screwed up, we’re sorry, and we’re going to make sure it doesn’t happen again”?

n the first half of 2012, natural catastrophes and man-made disasters caused insured losses of about $21 billion, Swiss Re said.

The numbers confirm what we’ve long espoused — crisis preparedness is an investment, not an expense. The above mentioned damage averages at $9.3 billion monthly. The cost of comprehensive vulnerability assessment, crisis planning and training is miniscule compared to the potential losses.

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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]

Still don’t think crisis management should be a priority?

We all know that crises can create financial damage, but do you really understand how much damage? The stats below, quoted from a BusinessInsurance.com article, may surprise you:

Natural catastrophes and man-made disasters caused insured losses of $20 billion in the first half of 2013, with floods a major contributor to that total, according to a Swiss Re Ltd. report released Wednesday.

The Swiss Re sigma study found that natural catastrophes and man-made disasters caused economic losses of $56 billion and resulted in insured losses of more than $20 billion during the first six months of the year, $17 billion of the total due to catastrophes.

In the first half of 2012, natural catastrophes and man-made disasters caused insured losses of about $21 billion, Swiss Re said.

The numbers confirm what we’ve long espoused — crisis preparedness is an investment, not an expense. The above mentioned damage averages at $9.3 billion monthly. The cost of comprehensive vulnerability assessment, crisis planning and training is miniscule compared to the potential losses.

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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]

Well, that didn’t take long

The first crisis to be directly impacted by the U.S. government’s shutdown reared its head this week in the form of a Salmonella outbreak that’s affecting at least 18 states thus far. Wired’s Maryn McKenna reports:

While the government is shut down, with food-safety personnel and disease detectives sent home and forbidden to work, a major foodborne-illness outbreak has begun. This evening, the Food Safety and Inspection Service of the US Department of Agriculture announced that “an estimated 278 illnesses … reported in 18 states” have been caused by chicken contaminated with Salmonella Heidelberg and possibly produced by the firm Foster Farms.

“FSIS is unable to link the illnesses to a specific product and a specific production period,” the agency said in an emailed alert. “The outbreak is continuing.”

This is the exact situation that CDC and other about-to-be-furloughed federal personnel warned about last week. As a reminder, a CDC staffer told me at the time:

“I know that we will not be conducting multi-state outbreak investigations. States may continue to find outbreaks, but we won’t be doing the cross-state consultation and laboratory work to link outbreaks that might cross state borders.”

That means that the lab work and molecular detection that can link far-apart cases and define the size and seriousness of outbreaks are not happening. At the CDC, which operates the national foodborne-detection services FoodNet and PulseNet, scientists couldn’t work on this if they wanted to; they have been locked out of their offices, lab and emails.

Yes, the shutdown has effectively hamstringed the CDC’s crisis management, leaving the department without resources to monitor, provide information about, or combat an issue directly affecting consumer health. Now one Salmonella outbreak isn’t going to create mass chaos, but it is a sign of the dangers involved in the political drama being played out in Washington. Let’s hope they get it together soon.

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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]

Rockstar’s reputation may hang in the balance

With Grand Theft Auto V claiming the record for not only the fastest-selling video game, but also fastest-selling entertainment product of all time, creator Rockstar North is in crisis management mode as it prepares its servers to handle millions more players than expected at the launch of its Grand Theft Auto Online service, scheduled to open today, October 1.

BBC News Reports:

Last week the company admitted it was facing “unanticipated” pressure because sales had been stronger than expected.

“We are working around the clock to buy and add more servers,” its blog said.

But it added that matters could be “more temperamental than such things usually are” because using so many computers introduced its own issues.

In the online version of the 18-rated violent crime game, up to 16 players can interact simultaneously within a virtual environment and create personalised avatars.

It is included free with every copy of the GTA 5 console video game. According to one analyst’s figures, more than 15 million units of the title had been sold by early last week.

“At a conservative estimate I would expect about two million players to log on to GTA Online within the first 24 hours,” added Keza MacDonald, UK games editor for IGN.com, the video game and entertainment site.

“Rockstar has never done an online game of this scale before, so they are totally unproven in terms of their network infrastructure.

“And even the highly successful World of Warcraft at its peak didn’t have as many people playing online at once as GTA is likely to have, so it wouldn’t surprise me if there were problems.”

The Rockstar team has to be thinking of the debacle that was the Sim City launch, and if they’re smart they’ll have a plan of action for even their worst-case scenarios. By the time this post is published Rockstar should have Grand Theft Auto Online up and running, but you can bet we’ll be watching to see how they handle the inevitable curveballs that come along with any major online event.

Of course we’d love to hear from you gamers out there as well! Were you able to get online, and what do you think of Rockstar’s efforts thus far?

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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]

Always ask, “who could be offended by this?”

When launching a major promo for a product, it’s Crisis Management 101, it’s very important to do your homework to ensure that you won’t be creating an ugly situation in the process. After reading about Coca-Cola’s latest marketing #fail there should be no doubts as to why. Here’s what went down, as reported by PRDaily’s Kevin Allen:

Coca-Cola is apologizing profusely (and rightfully so) after a Canadian girl opened a bottle of Vitaminwater to find the words “You Retard” printed under the cap.

Blake Loates and her family were especially offended due to the fact that Loates’ younger sister, 11-year-old Fiona, has cerebral palsy and autism.

Her father, Doug, sent a strongly worded letter:

“What would you do if you opened up your bottle of Vitamin Water and on the bottom of the lid it read, “YOU RETARD”? Think about it. I bet you’d be pissed off if you had a Fiona in your life… Can you imagine if SHE had opened this bottle?”

In a public apology from the beverage distributor, Coca-Cola spokesperson Shannon Denny told ABC News:

“We have spoken to the family to offer our sincerest apologies and to explain the production process to them. This is certainly not an excuse in any way for what has occurred. We wanted them to know that this was in no way intentional and was a mistake on our part during the review process. We also wanted to share that the promotion has since been cancelled and we are no longer producing bottles with those caps.”

OK on the apology. Well done there, but Coca-Cola’s explanation for the mistake was simply ridiculous:

Representatives for Coca-Cola have since stated that the language inside of the cap was the product of a competition pairing one random English word with a second random French word. In French, “retard” means “late” or “delayed.”

To make matters worse, Coca-Cola already had warning that their marketing trick could have unintended consequences. According to GlobalPost.com, “Coca-Cola got a similar complaint from another consumer who had the word “douche” printed on a bottle cap. In French, that’s the word for shower.”

We understand the enormous pressure that’s being exerted upon advertising departments to push out the next edgy, viral campaign, but slow your roll, people. Nobody enjoys having their “brilliant” ideas shot down, but you really do need that guy in the room who’s always asking who could be offended, how other cultures might interpret things, or, just to take a totally random idea, researching what might come up when you combine words from your English and French word lists for a bottle cap promo…

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For more resources, see the Free Management Library topic: Crisis Management
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[Jonathan Bernstein is president of Bernstein Crisis Management, Inc., an international crisis management consultancy, author of Manager’s Guide to Crisis Management and Keeping the Wolves at Bay – Media Training. Erik Bernstein is Social Media Manager for the firm, and also editor of its newsletter, Crisis Manager]