Tuesday, September 22, 2009

Revisiting Bank Crisis Communication

I had an interesting conversation this week with Laurie Kulikowski, who writes for thestreet.com.

She's working on a follow-up article about Citigroup. In her Sept. 16 posting, she concluded that Citigroup is "sending mixed messages to investors." You'll want to watch for her new post.

Her call reminded me of a piece I wrote for this blog a month ago, inspired by Ahmed Hamed, an MBA student from Ireland who posed a series of questions to me about the current banking crisis.

He ask if I "believe that it is the bank's job to restore confidence to investors and stakeholders or would you be more inclined to believe that concentrating on performance and profit will ultimately lead to investor and stakeholder confidence?"

I have reconsidered this question and haven't changed my mind, but perhaps I can explain my self better.

The best communication strategy in the world is useless if it is not based on fact and reality. So, before banks can restore confidence, they must DO what their customers, investors and employees expect them to do -- operate a sound and profitable business with each of those groups in mind.

Only after a company "does the right thing" can it talk about what it is doing, and the combination of doing and talking will begin the process of rebuilding consumer confidence.

Here at the Institute for Crisis Management, we've been called by prospective clients, already in a crisis, and wanting us to help get them out of it. When I ask what they were doing to fix the problem, they sometimes will explain that they don't know what they're going to do, but can't we help improve their public image and reputation while they figure out what to do? The answer is always the same -- no, we can't fix your problem with words. We can help fix the public perception of a company, IF the company is doing something to earn that trust and confidence back.

Laurie's earlier article about Citigroup sending mixed messages is a problem a lot of organizations create for themselves. Operational decisions cannot be made in a public relations vacuum and public relations strategies will fail unless they are coordinated and consistent.

I'm looking forward to Laurie's Citigroup follow-up on thestreet.com .

Wednesday, September 9, 2009

Harvard Says You're Not Getting Ready

Two-thirds of more than 1,000 businesses surveyed nationwide told Harvard School of Public Health researchers they could not maintain normal operations if half their workforce was out sick, afraid to come to work or home taking care of sick loved ones during a pandemic this fall.

Four out of every five organizations admitted they would face severe problems if half their workforce was out for a month.

"What we found is that a minority of businesses have started some sort of emergency planning," said Robert Blendon, a professor of health policy and leader of the project sponsored by the U.S. Centers for Disease Control and Prevention. "Most, I don't think, have thought through the implications of something so widespread."

For four years we have been urging clients and prospective clients to prepare for a pandemic.

Pandemics come every 30-to-40 years and in the past century they have killed 35,000 Americans in 1968, 70,000 Americans in 1957 and half-a-million Americans in 1918. There is no way to know in advance what level of pandemic the next one will be. So, you have to plan for the worst and hope for the mildest.

The Harvard survey confirmed that about three-quarters of businesses offer paid sick leave for some employees, but almost none provide paid leave for employees to stay home and take care of sick family members. And almost 70% of all American businesses require a doctor's note when an employees returns to work.

The CDC is suggesting companies waive the rule about a doctor's note. We suggest organizations amend their HR policy to very narrowly define exceptions to "the doctor's note" rule. Otherwise, ignoring that policy during a pandemic could mean it could be challenged in future cases where an employee didn't have a doctor's confirmation of a real sickness.

Harvard conducted 1,057 telephone interviews with randomly selected businesses around the U.S. between July 16 and August 12. They sampled small businesses with 20 to 99 employees, medium size companies with 100 to 500 workers and large businesses with more than 500 employees.

There are other areas that organizations should be reviewing before a pandemic strikes, including health insurance contracts and all other contracts, as well as cash flow issues and employee and customer communication plans.

Tuesday, September 1, 2009

Travel and Tourism States Could Be Hit Hardest by Pandemic

Whether you travel for business or pleasure, you will need a back-up plan for any trips you must take this fall. And if you are IN the travel or tourism business, you need to plan NOW for an economic crisis that could make the current recession seem like kindergarten.

H1N1 or swine flu began to make headlines in Mexico late in the spring and the impact on the travel industry was instant and intense. Hotels throughout Mexico had cancellations and in May occupancy rates at Marriott Hotel and Resorts across Mexico were in the teens. Airports from Cancun to Cabo San Lucas looked like ghost towns.

In the second quarter, Continental and Delta Airlines reported pandemic related losses of $50-million to $150-million respectively. Delta feared losses for the year closer to $250-million and that was before this year’s fall flu season even got here.

Airlines are working on contingency plans, and Continental spokesperson Julie King says they are in constant contact with the U.S. Center for Disease Control and the World Health Organization. Most airlines say they will either handle pandemic fears and cancellations on a case-by-case basis, or formalize their rebooking and cancellation policies after the government announces travel advisories.

At least 2,000 travelers from the U.S. and Mexico have been held in quarantine upon arriving in China, according to the U.S. State Department.

I travel a lot for business and the thought of being locked in a silver metal tube with potentially sick co-travelers has been bothering me. However, David Castelveter of the Air Transport Association says aircraft ventilation systems move air from side-to-side, NOT front to back. As a result, he says, the risk of exposure decreases with distance. AND, a pandemic flu virus doesn’t “live in the air” but is transmitted by droplets of fluids coughed or sneezed into the air, or passed from surface contact to hands and then to eyes, nose or mouth.

Travel insurance may help cover your costs if you get cancelled or rerouted, but travel experts say beware. Some travel insurance has a “pandemic clause” that could void your coverage.

If You're In The Travel Industry

States and regions that rely on travel and tourism for a significant part of their economic well-being could be hardest hit by a pandemic this fall. Nevada, Florida and Hawaii top the list, according to a report prepared in 2007 by The Trust for America’s Health.

Two years ago the Trust projected a $683-billion economic loss nationally during a pandemic. That’s about 5.5% of the goods and services produced in the United States. Nevada's economy could take a hit of more than 8%, while Hawaii's economic output could fall by about 6.6%.

"In a pandemic, we will see people avoiding discretionary travel and avoiding large gatherings for the legitimate fear of contagion," said Jeffrey Levi, executive director of Trust for America's Health. "

The Trust for America's Health examined how a severe pandemic could impact consumer demand for products and services. The Trust estimates tourism and entertainment could experience an 80% decline in demand. A comparable decline could occur for hotels and restaurants.

Meanwhile, the transportation and warehousing sectors could experience a 67% decline in demand. The organization predicted that the economies of Virginia and Maryland would fare the best among the states but still face significant declines of 5.13% and 5.06%, respectively. Washington, D.C., could face a 4.62% decline.