Thursday, June 28, 2012

Another Survey Confirms You Need To Be Prepared

The fourth annual “Rising CCO” survey conducted by Weber Shandwick and executive search firm Spencer Stuart confirms the value of crisis management experience has almost doubled since the first survey in 2007.

More than 70 percent of chief communications officers surveyed, report their companies experienced some kind of threat or disruption in the past two years, so it should not come as a surprise that 65 percent of CCOs say improvement and protection of their corporate reputations is one of their top priorities.

Three-quarters of CEOs are estimated to spend time on managing crises that strike their organizations. And, it takes approximately 15 months to get past the initial crisis and as we have been saying for years, most crises are like earthquakes – there’s the initial problem, followed by “after-shocks.”  Sometimes those after-shocks do more damage than the original crisis.

The Rising CCO survey identified some of those after-shocks including 60% more media attention, 51-percent more governmental scrutiny and a 42-% drop in employee morale.

"The global business events of the past few years have demonstrated in stark clarity the cost of damage to corporate reputation," declared George Jamison, who leads Spencer Stuart's corporate communications business

Jamison added, "experience in crisis management is essentially a mandatory requirement for CCOs today. As our 2012 research shows, crises take time to fade and CEOs are right in wanting the best talent with them in the bunker when they find themselves in the media and political spotlight."

If you're a CEO, President or owner of a business, big or small, and dollars and cents are more important to you than your organization's reputation, just substitute "dollars" for "reputation" and you should come to the same conclusion.  You can't afford to have a crisis, whether it is in terms of money or reputation.

We’re always ready to help organizations of any size identify the things that can go wrong and then build a crisis communication plan to help get them started when one of those crises strike. 

We’re just as ready to respond 24/7 if you don’t have a plan and still have a crisis and need help working your way through it. 

Monday, June 18, 2012

More Than Cars Get Recalled

RedPrairie and Gateway Research surveyed 130 consumer product, life sciences and food and beverage companies to see how well prepared they are to track, trace and recall products and report  72-percent were not confident in their companies’ recall and tracing abilities.

Only 51-percent of the companies surveyed believed they could initiate a recall within hours while almost 70-percent were very concerned about coordinating recalls with suppliers and distributors and more than half worry about their ability to find and isolate items within their own supply chain.

IDC Manufacturing Insights practice director Simon Ellis says a recall costs an average of $10-million.

86-percent of the executives surveyed recognized the seriousness of their financial liability if a product recall is initiated and even more if something goes wrong with the recall itself. Another 25-percent recognized potential brand reputation damage if they have a recall and it doesn’t go well.

We’ve assisted with major product recalls, and when the companies involved are committed to doing the right thing, taking responsibility quickly, and reacting fast, the long-term damage is minimal, or almost non-existent.

We assisted with a recall a few years ago and the only publicity was a trade publication article after it was over and it was about how well the companies involved had handled it.

The potential was for millions of dollars in financial liability.  The manufacturer of one component of a major household appliance discovered one of their suppliers had substituted a defective “washer” that had been built into half-a-million components that they delivered to their customers.  Their customers built the final product and had sold and installed almost all of those items, when the original parts maker discovered the defect and called us.

The end user product would likely fail in a few months. 

We helped them develop a communication strategy to alert their customers of the problem and a communication plan for the end user manufacturer to use to notify their customers. Meanwhile our client went to three shifts a day, seven days a week, to make replacement components, and committed to pay for the cost of delivery and installation of the replacement parts.

There was cooperation up and down the product chain and there was no evidence any of the original appliances failed before the homeowners were notified and scheduled their repairs.

We wrote a few weeks ago about the hazards of the supply chain.  This is just another link in that chain.

Monday, June 11, 2012

No Wait, There's More!

Former Penn State Assitant Football Coach Jerry Sandusky's trial began this morning (6-11-12) with the announcement he would testify in his own behalf, followed by a report from NBC News that their sources say more charges against more Penn State administrators or former administrators is likely.

NBC says former Penn State president Graham Spanier is the subject of “major new evidence” about his involvement in the Sandusky scandal, including emails exchanged in 2001 by Spanier and former university official Gary Schultz and athletic director Tim Curley.

NBC reported there were e-mails that have surfaced between former President Spanier and Schultz that contained conversations in which the two agreed it would be "humane" to Sandusky to "not involve" legal authorities.

And, later in the day, Penn State spokesman David La Torre issued a statement that confirmed e-mails had been discovered and turned over to the State Attorney General.

Schultz and Curley already face perjury charges.

There are two lessons in today's development.

1.  What people write and exchange in e-mails and other digital media can get you in a lot of trouble.

2.  And every crisis has "after-shocks" and sometimes the after-shocks can do more harm than the initial crisis event.

Tuesday, June 5, 2012

Bet You Haven't Planned for This One!

You run a restaurant, a retail shop, a department store, a sporting goods store, a grocery story, a pharmacy -- just to name a few -- and you have a "rent-a-cop" or in-house "loss prevention" security officer on duty.

Someone tries to skip out without paying or is suspected of shoplifting, and your employee follows them outside and stops them.  A scuffle ensues -- that's police talk--and your employee "detains" -- more police talk -- the suspect -- still more police talk -- and city or county law enforcement officers are called.

When the first officer arrives to assist your "loss prevention" person he/she notices that the "suspect" is having trouble breathing or showing signs of medical distress.

Just imagine the questions that generates.  Imagine how much worse it might get, after the police call emergency medical services and the "suspect" dies on the way to a hospital.

You don't have to imagine it.  It happed Friday, June 1, at a Southern California Walmart Store.

The Los Angeles County coroner's spokesperson said they don't know yet if the man died as a result of the struggle or from some pre-existing medical condition.

Do you have a PLAN for that?  What would you do, what could you say?  What are the odds a family member will file a lawsuit against you?  What if the "loss prevention" officer was white and the alleged shoplifter was not?  What if there was no sign that anything had been taken from the store?

You can take a lesson from Walmart.  The company spokesperson got off to a good start. Her comments were timely.  She explained the "loss prevention" employee is suspended pending an investigation.  She extended the company's sympathy -- or at least she observed "it's a sad situation" anytime "there's a loss of life."  And she added the company was cooperating with law enforcement.

What would you do?  What would you say?