Wednesday, June 23, 2010

McChrystal Had To Go

General Stanley McChrystal resigned his job because of indiscretions in the presence of a Rolling Stone magazine reporter.

What happened to Gen. McChrystal is the same thing that should happen to any corporate executive who is careless in speaking in front of a reporter, a share-holder, employee, or anyone else who has an interest in the company or organization.

When the first snippets of the Rolling Stone article began to circulate, I was astounded and could not imagine how senior staff to a Four Star General could be so reckless as to make statements criticizing the nation’s leaders and other high government officials that they had to work with.

I imagined the senior staff to the CEO of General Motors bad-mouthing the Chairman of their Board of Directors and federal officials and regulators, in front of a reporter from Forbes or the Wall Street Journal.

Then, when I read the complete article, I discovered they had been drinking heavily, as a group, and with the Rolling Stone reporter present when some of the most outrageous remarks were uttered. Intoxicated people are usually not in control of their tongues or actions and that raises two more questions.

Why did they (1) knowingly take the reporter with them and, in his words, (2) "get hammered" in his presence?

I worked in an Air Force Wing Information office in the late 60’s and we supported a one-star and a two-star general. I’m sure some of the staff had a drink, or more, on occasion but never with a reporter. Reporters get drunk, too, but rarely when they have access to a major news maker and not when a career-making story is on the line.

Losing control of their senses, one time, would have been bad enough. But, the reporter ended up spending several days, off and on, with Gen. McChrystal and various members of his leadership team. If they ever did think about the risk of talking to and in front of a reporter, they apparently got so used to him being around they really let their guard down.

I suppose they might never have cared what they said, and if that’s the case, they should be locked away somewhere!

All of this is NOT intended to discourage executives and leaders of business or other organizations from giving access to the media. Just know the rules. Reporters are always “on duty” and you should be too, when they are within earshot.

And, if you are involved in communications for corporate executives or the leadership of any organization, never assume they know how to conduct themselves with reporters, or understand how reporters work. Remind them that just because the camera has been turned off, or the reporter has put her notebook away, the interview is still going on as long as the reporter is close enough to see and hear them.

Tuesday, June 22, 2010

Annual ICM Crisis Report Released

The overall number of business crises were down significantly in 2009, and more in line with the years 2000 and 2004, but that did not mean it was a less tumultuous year.

The year began with the beheading of a Chinese student at Virginia Tech University, followed by the economic crisis, with all its subsequent stories - Madoff, Goldman Sachs, AIG, Lehman Brothers, big and small bank failures, upheaval in top management, outlandish multi-million dollar bonuses to heads of failing companies, and more. Industrial accidents and natural disasters sent many businesses into crises around the globe.

The one fact that never changes, except by tiny degrees, is the number of sudden VS smoldering crises -- nearly two-thirds of all publicly reported business and organizational crises in 2009 were the smoldering type -- the kind of disruption that had warning signs before it got out of hand and before it became a public event.

That reaffirms our consistent warning that roughly two-thirds of all organizational crises could be prevented and never become costly disruptions that all too often cripple an organization, if not kill it.

To download the full ICM Annual Crisis Report copy and paste this link in your browser:

Friday, June 18, 2010

How About A New BP Spokesperson?

About 60 days, too late, BP’s CEO Tony Hayward, is being replaced as chief oil spill spokesperson. Managing Director Bob Dudley has been tapped to assume that role.

At the Institute for Crisis Management, we believe strongly, there is a time and a place for the top executive of a company in crisis, to face the cameras and the public and speak on behalf of his or her organization. It should happen relatively early, and be carefully controlled, and be more of an opportunity for the top person to make a statement, not to be hammered with questions that he/she most likely does not have answers to.

Then that executive should go “run” the operation, and leave the day-to-day, on-going spokesperson role to someone high up in the management ranks, but with more operational experience and public credibility.

The major airlines perfected this approach years ago, when they developed their crisis communication plans for airplane crashes. A day-to-day spokesperson, with plenty of training and experience, is immediately assigned to be the “public face and voice” of the organization.

Meanwhile, the CEO is put on the first airplane the company can commander and flown to the airport nearest the crash site, where he briefly appears before a mob of reporters. He expresses his sympathy for the victims and their families, pledges his personal and company commitment to work with all investigating agencies to determine what went wrong and then re-introduces the “on-going” spokesperson to answer any questions the company may have answers for, and excuses himself to go “manage” the crisis.

This is a tried and true approach and there are very few exceptions, in my experience. There are some things only the CEO can do, and if he/she is busy fending off reporters, he/she cannot do the leadership/decision making things.

But just as significantly, IF the CEO misspeaks, there is no one left to step in and fix it. That’s what BP has faced, over and over again for nearly 60-days.

There is also a cultural gap between the leadership of BP and the American audience. We experience this frequently with our clients that are European or Asian. They don’t think the same way Americans do and they don’t share the American belief that management should be sharing information with their workers , customers and partners.

And they don’t speak the same. Their colloquialisms are frequently misinterpreted by Americans, just as an American from the deep South is sometimes misunderstood by a Yankee or vice versa.

Not only has Tony Hayward been criticized for his British way of expressing himself, The Swedish Chairman, Carl-Henric Svanberg, set off a firestorm when he used the expression “small people” at the White House, when he probably meant “everyday folks.”

Now, the new spokesman for BP is former president and CEO of Russia’s third largest oil and gas company. I can only imagine how he is going to be greeted by Americans.

Wednesday, June 16, 2010

Which Audience Is Most Important: Internal or External?

In any kind of business or organizational crisis, internal communication is often more important than external, or at least as important.

Whether you’re BP, Toyota, Apple or a small mom-and-pop business, you will not only lose the battle, but the war, if you don’t keep your employees, partners, and their families informed and reassured.

Under normal operating conditions, effective internal communication leads to better and more productive and supportive employees. In a crisis, it is even more important to keep employee spirits up and maintain employee confidence and support. Otherwise, management mistrust takes over and when employees do not trust their bosses, productivity suffers, and productivity impacts the bottom line.

I can give you two examples – at the extreme – of size and potential damage.

An international manufacturing company that does business in Europe, North America and elsewhere, was faced with an unfounded attack on one of its consumer products. The public media was told the allegation was not true, but the story persisted and critics took to the Internet.

With thousands of employees around the world, the company wisely met the issue head-on in its plants, distribution centers and offices and explained the facts and the misperception that was being spread. The employees believed their management and conveyed that to their own families, and in a couple of weeks, the issue disappeared.

At the other end of the spectrum, a client with fewer than 200 employees and contracts with several federal government agencies. An employee was fired for cause, and set out to get even by filing federal whistle blower complaints. After many of the complaints were dismissed, the ex-employee finally found a government lawyer with his own agenda.

The company faced a multi-million dollar settlement and we were called in to help management get ready for the media coverage. Our advice was the media would probably not pay much attention, but employees would panic when they heard about the settlement and fear for their jobs.

The owner rejected our initial recommendation to concentrate on reassuring employees that the company was sound and the settlement, although over the top, would not slow the company’s growth and success. The owner said, that was none of his employee’s business!

We prevailed, however, and when the settlement was made public, we had employee meetings scheduled and appropriate explanations ready and talking points for a private meeting with the company’s banks and lenders. When each meeting was done, the employees and bankers said, “okay” and work resumed, business continued to grow and the media paid almost no attention at all. It was a one-day business page story in a couple of local newspapers

Internal communications is all about creating and maintaining a trusting relationship. It is as much about what you say, as how you say it and when. If you wait for your employees to hear about your bad news from someone outside the organization, it will come back to haunt you.

If you don’t communicate quickly and effectively in a crisis, employees will lose their trust in you and the entire organization will suffer.

This is just as important in today’s environment of “downsizing” and “right-sizing” and all the other euphemisms for lay-offs. When you lose a customer, it impacts your bottom line, but you can go after another customer.

When you lose an employee because of a lay-off, you not only lose a person that will not be replaced, but you will send shock-waves through the remaining employees, who will begin to fear they will be next and/or resent the fact they will have to work harder to make up for the person or persons who have been thrown out like dirty dish water.

Internal communication before, during and after a lay-off will determine the future of the organization and whether it will prosper again, or not.

Thursday, June 3, 2010

Tony Hayward: “Did I Say That?”

The CEO of British Petroleum is not the first, and won’t be the last chief executive to say things he later regretted. We can only hope they regret some of the things they said.

Thanks to NEWSWEEK Magazine, we have a collection of documented “gaffes” – Newsweek’s description – made by BP’s Tony Hayward, beginning almost immediately after the April 20 explosion that killed 11 people and sent a steady stream of crude oil into the Gulf of Mexico.

One of the reasons we normally recommend the top executive NOT be an on-going spokesman in a crisis is if he/she misspeaks there is no one else who can step in and fix it. Hayward keeps misspeaking and there isn’t anyone in the organization that can fix it.

The New York Times reported Hayward told associates “What the hell did we do to deserve this?” And Newsweek added, “A possible answer might be the company’s 760 safety violations over the last three years” compared to one for ExxonMobile.

Two weeks later Hayward tried to put the disaster in perspective, telling a British reporter the Gulf of Mexico is “a very big ocean” and the oil and dispersant spreading throughout the region “is tiny in relation to the total water volume”

Then he was quoted by Sky News as saying the “environmental impact of this disaster is likely to be very, very modest.” Either his staff is incompetent, lying to him, or he is not paying attention to them.

The biggest “gaffe,” at least to many of the Gulf area victims, including the families of the eleven that died, came May 30 on the Today Show when he declared, “. . . there’s no one who wants this over more than I do. I would like my life back.”

You can imagine how the victim families felt about that. He later apologized.

BP has hired help – one of former Vice President Dick Cheney’s spokespersons, Anne Womack-Kolton, has been brought in to advise Hayward!