Message to Domino’s: Contingency Planning Still Rules the Roost
Just over a century ago, The Boy Scouts of American adopted a motto that is as poignant as ever: “Be Prepared.”
It may sound old-fashioned, but the disgusting video prank that damaged the Domino’s Pizza brand once again proves that major companies are not spending enough time on contingency crisis communications planning.
How else can you explain the comments of the company’s spokesperson when asked about a YouTube video that depicted two employees in a North Carolina store putting nasal mucus on sandwiches and putting cheese up their noses?
The spokesperson, Tim McIntyre, told the website ragan.com, “…Right now, it (the video) is on web sites and blogs. It’s not on ABC, CNN or USA Today.”
So what? The damage had already been done.
By the time Domino’s posted its own YouTube video and apology on its corporate web site, an estimated 1 million people had already seen the original.
Worse than that, the social media phenomenon Twitter helped spread the YouTube video like wildfire. Things got so bad that Domino’s (once again about 48 hours after the first video appeared) had to create its own Twitter account.
Like it or not, social media explosions like this one can quickly cause real loss of business. BrandIndex, a daily online consumer brand perception service, reported that Domino’s “buzz score” had dropped significantly from April 10 to April 14.
While it may be too early to assess the long-term damage to the Domino’s brand, one could imagine a scenario whereby hundreds of thousands of consumers call Pizza Hut instead of Domino’s. The lost revenue in just a few days could amount to millions, or even hundreds of millions.
Some Things Never Change
Having practiced crisis communications for more than 30 years, I continue to be astounded at the lack of real, in-your-face contingency communications planning.
I’m not talking about the kind of planning that results in a binder on a shelf containing the names of top company executives who should be contacted in a crisis. Or a boiler-plate crisis communications checklist posted on a company’s Intranet. Or even the availability of a company spokesperson who can speak to the media.
In case after case, it’s not what is said when the house is burning, but what has been done to prevent the fire in the first place.
The Domino’s flap is particularly troubling in that the company had not likely prepared for a YouTube or Twitter scenario. If it had, the responding video from the president would have been posted on day one, not 48 hours later. Similarly, the Twitter account could have gone live within hours of the YouTube video.
Even more puzzling is a New York Times story that indicated the company learned about the original video the day after it appeared, but decided not to respond aggressively, hoping the controversy would subside. “What we missed was the perpetual mushroom effect of viral sensations,” said the Domino’s spokesperson.
This is another indication that Domino’s – and likely hundreds of other major companies – have not adequately addressed contingency communications planning as it relates to social media flare-ups.
While online media will continue to evolve, moving faster and faster in the weeks, months and years ahead, nothing is likely to replace the need for contingency planning that stays ahead of the curve.
As I have been espousing for years, a company’s best communications talent (and outside counsel whenever necessary) needs to have a seat at the table right next to the CEO. Still, in too many cases, the crisis is handed to the spokesperson without the benefit of a rock-solid crisis communications contingency plan in place.
Old School is New School
Companies should not let new mediums like YouTube, Facebook, Twitter, MySpace, and other yet-to-be-invented services intimidate them. Instead, they need to focus on the fundamentals of sophisticated contingency communications planning. Here’s a checklist of processes to consider:
As part of the risk management process, appoint a “brand-threat” team charged with the responsibility of monitoring online sites, broadcast and print media 24-7. Have a system in place to direct problems right to the CEO.
Explore organizational vulnerabilities. Get the company’s top five executives in a room and discuss three to five worst-case scenarios. Hold nothing back.
Develop a written plan, one with situation analyses, objectives, strategies, key audience definition, key messages, implementation tactics, and social media protocols.
Establish a crisis team that includes senior management, communications and legal counsel (inside and outside), marketing, customer service and other key executives.
Maintain transparency. We are long beyond the days when a company in crisis can say “no comment.” Your customers and others demand answers. What is said should have its roots in the crisis communications plan.
Invest in training. There is still no real substitute for media training and presentation training. Top executives and spokespersons need constant refresher courses. In a crisis, the CEO might need to post a YouTube video within hours.
Stay current. Today’s lightning-fast information environment demands a mix of young, mid-seasoned, and veteran communicators. There’s nothing like a “20-something” to know what’s hot.
Pay for measurement. Don’t assume that your message is getting through and mitigating brand damage. There is no shortcut to quantitative analysis. The nation’s top polling firms can deliver results in 24 hours.
As time has proven, no company is fully immune to a crisis. But remember, more often than not it’s not the crisis itself that does the damage, but how well management responds.
Truth be told, in our free-speech online society there is no way to truly stop people from pulling stupid stunts like the one that bashed Domino’s.
A better plan, though, might have averted what amounted to a lynching by social media.
Joe M. Grillo, senior vice president, contributed to this blog.
Thursday, April 16, 2009
Thursday, November 20, 2008
President, Congress Must Call for a 90-Day Subprime Loan Moratorium
By Richard E. Nicolazzo
Whatever the country is doing to solve the subprime loan mess just isn’t working. I believe the time has come to start thinking outside the box.
The crisis, born from the bursting of the U.S. housing bubble, has passed through various stages exposing poor regulatory framework, unscrupulous lending, and a pervasive weakness in the global financial system.
Despite the July 2008 passage of the Housing and Economic Recovery Act and recent actions by lending giants such as Citi, JPMorgan Chase, and Bank of America to modify billions of dollars in mortgages, the housing meltdown appears to be worsening.
The Congressional Budget Office had projected during the summer that the so-called “Hope for Homeowners” legislation would allow about 400,000 troubled homeowners to switch their risky loans for conventional 30-year fixed rates with much better terms.
Early results have been troubling. The government received only 42 applications in the program’s first two weeks and, according to the Federal Housing Administration, only 20,000 applications are expected by a year from now.
Consider some other sobering statistics recently compiled by First American CoreLogic, a market research firm quoted widely on the subject:
- Nearly one in five U.S. mortgage borrowers owe more to lenders than their homes are worth.
- About 7.63 million properties, or 18 percent, had negative equity in the previous month.
- Seven hard-hit states (Arizona, California, Florida, Georgia, Michigan, Nevada, and Ohio) had 64 percent of all "underwater" borrowers.
To make matters worse, the Bush administration, Treasury Secretary Paulson, Fed Chairman Bernanke, and the FDIC continue to squabble about how to get direct aid to homeowners. You might call it political “analysis paralysis.”
The FDIC has a plan to provide a federal guarantee to share in any losses on modified mortgage loans, but the White House has opposed it. The FDIC estimates the plan could help prevent some 1.5 million foreclosures.
Sheila Bair, FDIC chair, was blunt in recent comments: “Today, the stakes are too high to rely exclusively on industry commitments to apply more streamlined loan modification.”
Bold Action Needed Now
While definitive statistics are hard to come by, most estimate the value of U.S. subprime mortgages at more than $1 trillion, with approximately 16 percent of this amount in the adjustable rate mortgage (ARM) category.
Why haven’t regulatory and Congressional efforts begun to turn the tide?
My sense is that the whole system needs time. When you dissect the residential mortgage lending industry, you find a complex web of regulations, paperwork, federal guidelines and other impediments that prevent the process from working smoothly. Anyone who has ever applied for a home mortgage can appreciate the challenge.
The time for more bold action is now.
Immediately, the president and Congressional leaders should call for a voluntary 90-day subprime loan moratorium. Lenders holding the mortgages would be asked to grant borrowers the three-month reprieve and stop all foreclosure actions. If voluntary actions don’t work, Congress should step in and enact legislation.
Designed to work as a cooling-off period, the moratorium would address the immediate need for homeowners to “catch their breath” and work with lenders to restructure their loans.
Eligibility would follow along the lines already established by Congress for the Housing and Economic Recovery Act:
- The loan must be on an owner-occupied principal residence.
- The homeowner must have a monthly payment greater than at least 31 percent of the borrower’s total monthly income, as of November 1, 2008.
- The Borrowers must certify that they have not intentionally defaulted on an existing mortgage, and did not get the loan in the first place by fraudulent means.
- No one with a criminal record could take part in the moratorium.
The moratorium would not be intended as a bailout or as a reward for families who bought homes they couldn’t afford. Instead, it would keep people in their homes.
Rescues Can Work
While the problem is massive and highly complex, history proves radical thinking can work. The 1975 rescue of New York City comes to mind.
With the city $12 billion in debt, financier Felix Rohatyn was brought in by the mayor to set up an entity called the Municipal Assistance Corporation. It raised money selling bonds backed by sales of tax receipts and stock transfer taxes. The goal was to revive the city’s economy while balancing the budget. It worked.
Although no silver bullet exists to solve the subprime loan mess and general downturn in housing, a 90-day moratorium on subprime mortgages is something homeowners and the country desperately need.
While policy makers in Washington continue their debate, homeowners continue to suffer.
Richard E. Nicolazzo is president and CEO of Nicolazzo & Associates, a strategic communications and crisis management firm headquartered in Boston, Massachusetts. Joe M. Grillo, senior vice president, contributed to this commentary.
Wednesday, November 12, 2008
NEXT FOR OBAMA: 'EXPECTATION MANAGEMENT'
“Public sentiment is everything. With public sentiment, nothing can fail; without it, nothing can succeed."
— Abraham Lincoln, Lincoln-Douglas Debate, 1858
Now, a week after the election, Barak Obama the great “campaigner and orator” must become Barack Obama the great “communicator” as he attempts to rebuild confidence and trust with the American public and the world.
After capturing more than 64 million popular votes and thrashing John McCain, 365-162, on the electoral scorecard, Obama assumes what is arguably the toughest job on the planet.
Like a new chief executive officer who steps into a multibillion-dollar company on the precipice of business collapse, our new president, with no real executive experience, has to manage two wars, protect the U.S. from terrorists, rebuild a staggering economy and fulfill all the other campaign promises he’s made during the past year.
In the world of communications, one might call this entering the realm of “expectation management.”
Let’s be realistic: PR executives like me (and hundreds of others who frequent this website) like to drive the argument that communications is at the heart of any successful endeavor. It’s never been more real.
Rick Stengel, Time magazine managing editor, may have put it best recently when he said, “Obama’s main job is to be communicator-in-chief.”
The millions of Americans who voted for Obama, and even the 53 million who voted for McCain, will likely show patience as the new president gets his feet on the ground and tackles an agenda that is similar to Franklin D. Roosevelt arriving in the capital in the depth of the Great Depression.
Early indications are that Obama and his new chief of staff, Rahm Emanuel, get the picture. On November 7, only three days after the vote, Obama held a press conference. What better way to start directly speaking to the public?
Three days later, Obama and his wife met at the White House with President Bush and the First Lady. Even though the visit – the earliest in recent presidential history – did not produce major policy statements, it stands as a symbol of our democracy and underscores the importance of communication between the man on the way in and the man on the way out.
People Respond to Structure
Obama can take a page from the modern crisis communications playbook:
This process should manifest itself in bite-size messages that the public can easily absorb. Taking small steps is the strategy for success. Past presidents have described the cocoon-like effect that occurs when the commander-in-chief gets into the Oval Office.
No human being can deliver everything at once. Obama must tackle the problems one by one and lay out a clear, concise strategy to deal with each. One way to describe it would be “breaking the bubble” and creating a dialogue with the American people.
News Media is Not the Enemy
Today’s blazingly fast media environment takes skill and sophistication to master. So far, Obama’s troops seem on top of their game. No candidate has used TV, radio, print, online, and cell phone media better than Obama. His administration should keep the same tempo.
Working the news media game is also critical. Jon Friedman, who writes the popular Media Web column for MarketWatch.com, suggests Obama loosen up a bit from this point on.
The best way to deal with potential adversaries is to embrace and listen to their concerns. Those who were around at the time must remember the way President Kennedy quipped along with those that opposed him. In more recent times, Ronald Reagan and Bill Clinton had great karma with the media.
The key point is to create an environment where a message can be delivered (without clutter) directly to the American public.
With the benefit of more than 35 years in the business of strategic communications, I offer the new president some short and long-term recommendations to become the “great communicator”:
In my view, proactive communications and expectation management will play a major role and help define Obama’s success and presidency.
Joe M. Grillo, senior vice president at N&A, contributed to this blog.
“Public sentiment is everything. With public sentiment, nothing can fail; without it, nothing can succeed."
— Abraham Lincoln, Lincoln-Douglas Debate, 1858
Now, a week after the election, Barak Obama the great “campaigner and orator” must become Barack Obama the great “communicator” as he attempts to rebuild confidence and trust with the American public and the world.
After capturing more than 64 million popular votes and thrashing John McCain, 365-162, on the electoral scorecard, Obama assumes what is arguably the toughest job on the planet.
Like a new chief executive officer who steps into a multibillion-dollar company on the precipice of business collapse, our new president, with no real executive experience, has to manage two wars, protect the U.S. from terrorists, rebuild a staggering economy and fulfill all the other campaign promises he’s made during the past year.
In the world of communications, one might call this entering the realm of “expectation management.”
Let’s be realistic: PR executives like me (and hundreds of others who frequent this website) like to drive the argument that communications is at the heart of any successful endeavor. It’s never been more real.
Rick Stengel, Time magazine managing editor, may have put it best recently when he said, “Obama’s main job is to be communicator-in-chief.”
The millions of Americans who voted for Obama, and even the 53 million who voted for McCain, will likely show patience as the new president gets his feet on the ground and tackles an agenda that is similar to Franklin D. Roosevelt arriving in the capital in the depth of the Great Depression.
Early indications are that Obama and his new chief of staff, Rahm Emanuel, get the picture. On November 7, only three days after the vote, Obama held a press conference. What better way to start directly speaking to the public?
Three days later, Obama and his wife met at the White House with President Bush and the First Lady. Even though the visit – the earliest in recent presidential history – did not produce major policy statements, it stands as a symbol of our democracy and underscores the importance of communication between the man on the way in and the man on the way out.
People Respond to Structure
Obama can take a page from the modern crisis communications playbook:
- Develop a situation analysis encompassing the short-term problems that must be addressed immediately;
- Establish goals and objectives that are achievable;
Define the audiences; - Develop key messages and positioning strategies that will resonate with the public (no spin);
- Execute tactics; and
- Measure results along the way through reliable polling.
This process should manifest itself in bite-size messages that the public can easily absorb. Taking small steps is the strategy for success. Past presidents have described the cocoon-like effect that occurs when the commander-in-chief gets into the Oval Office.
No human being can deliver everything at once. Obama must tackle the problems one by one and lay out a clear, concise strategy to deal with each. One way to describe it would be “breaking the bubble” and creating a dialogue with the American people.
News Media is Not the Enemy
Today’s blazingly fast media environment takes skill and sophistication to master. So far, Obama’s troops seem on top of their game. No candidate has used TV, radio, print, online, and cell phone media better than Obama. His administration should keep the same tempo.
Working the news media game is also critical. Jon Friedman, who writes the popular Media Web column for MarketWatch.com, suggests Obama loosen up a bit from this point on.
The best way to deal with potential adversaries is to embrace and listen to their concerns. Those who were around at the time must remember the way President Kennedy quipped along with those that opposed him. In more recent times, Ronald Reagan and Bill Clinton had great karma with the media.
The key point is to create an environment where a message can be delivered (without clutter) directly to the American public.
With the benefit of more than 35 years in the business of strategic communications, I offer the new president some short and long-term recommendations to become the “great communicator”:
- Unlike previous presidents who focused on radio, Obama should consider monthly TV addresses to the nation on Sunday nights at 8:00 p.m. My hunch is there will be plenty to talk about every 30 days. At a minimum, cable channels are likely to broadcast Obama’s full remarks.
- Maximize email communications. The Obama campaign has amassed the email addresses of millions of supporters who can be reached almost immediately. This communications tool creates awareness, understanding and ultimately builds public support for his policies and legislative initiatives. On a frequent basis, his administration should dispatch policy updates and general progress on his initiatives. On election night, Obama’s email message to supporters included the line, “…We have a lot of work to do to get our country back on track, and I’ll be in touch soon about what comes next.”
- Maintain an active website between now and inauguration day on January 20, 2009. http://www.change.gov/ has already been established as a gateway for the transition. It is clean and simple to navigate. The trick now is to keep the site fresh.
- Embrace the so-called new media. Four years ago, it would have been unthinkable for a president to appear on Facebook or be part of the LinkedIn generation. Now, it seems almost essential to be part of these communications channels. Here again, a message can be emailed and reach each key audience at minimal cost.
- Conduct “Town Hall” meetings. While not a breakthrough idea, this format is the right tactic at the right time. The administration could pick a town somewhere in America and get the president out to connect directly with the public. This creates a dialogue with the American people…not just one-way communication.
Nobody can easily predict how things will turn out for the new commander in chief.
As Leon Panetta, the former White House chief of staff who has been advising the transition team, said, “Mr. Obama has little choice but to put his arms around the chaos and make the decisions that involve pain and sacrifice up front.”In my view, proactive communications and expectation management will play a major role and help define Obama’s success and presidency.
Joe M. Grillo, senior vice president at N&A, contributed to this blog.
# # #
Tuesday, August 12, 2008
Clintons In Danger Of Ruining Legacy
Bill and Hillary Clinton, two people with just about the largest egos in America, are in danger of ruining their legacy of political leadership and as stalwarts of the Democratic Party.
They may not realize it, but the Clintons are in crisis management mode as the nation turns its attention to the Democratic National Convention in Denver on Aug. 25-28.
From the perspective of strategic communications, politics can be a strange business. Day-in, day-out, dozens of strategists likely huddle with the Clintons to chart their next moves in the face of the Democratic Party nomination of Barack Obama and his run for the White House.
One wonders, though, are the Clintons focused on shaping their legacies, or are they interested in retaining the spotlight just to feed their egos? At stake are not just their roles at the convention, but also how history will judge them as political leaders and how Hillary will be positioned for the future.
Shaping one’s legacy is no simple matter. From the corporate world, we have the example of Jack Welch, former CEO of General Electric. Through skillful management of his legacy, Welch is now arguably more popular then ever.
At the other end of the spectrum, Dick Grasso, former head of the New York Stock Exchange, may have won his case in the court of law, but the court of public opinion is another matter. Most people view him as a greedy Wall Street type who walked away with tens of millions of dollars he didn’t deserve.
Speaking Roles Coming Into View
The Democratic National Convention is heating up for Bill and Hillary Clinton. Bill will speak on the third night before an address by the yet-to-be-named VP candidate, while Sen. Clinton is expected to speak on the convention’s second night.
Meanwhile, recent comments from the two leave one wondering if they will articulate the party line at the convention or create party divisiveness.
During a trip to Africa, Mr. Clinton said (for the record) “…you can argue that nobody is ready to be president,” and he learned a lot in his first year on the job. That remark, which made headlines across the country and throughout the world, could be viewed as tepid and unenthusiastic. Why didn’t he just say Obama was qualified?
Hillary, speaking about the same time during a Web chat, insisted she’s sincerely behind Obama after someone asked whether she truly was supporting him or was “just saying what you have to?”
In a video, Sen. Clinton seems to be inviting more dissent from her supporters at the Democratic Convention when she says, “…I’ve made it very clear that I’m supporting Obama, and we’re working cooperatively on a lot of different matters. But delegates can decide what they want to do on their own; they don’t need my permission.”
As The New York Times pointed out in an Aug. 8 analysis, having one Clinton, let alone two, hover over you during a Presidential campaign can be trying. Just ask Al Gore.
Some may recall that the Gore campaign tried to keep Mr. Clinton out of the limelight at the L.A. convention in 2000, giving him a speaking role on Monday night. But Mr. Clinton arrived the previous Friday and was the toast of the town for nearly three days leading up to his speech.
What might the Clintons have up their sleeves for Denver?
It’s hard not to see that, so far, the Clintons are all about being the Clintons. If they disrupt the convention and further split the party, John McCain is likely to win. For their part, the Clintons risk being despised by the Party for years to come.
Rx to Protect Their Legacy
The Clintons should, of course, speak at the convention. After all, Bill is a former president and Hillary (by her own count) captured 18 million votes in the primaries. However, what they need to understand is what they say and how they say it will have a direct impact on their reputations and legacy.
History tells us that it only takes a few pointed comments to the national media to create a lasting impression (“Read my lips: no new taxes”, George H.W. Bush, 1988 Republican National Convention). Based on more than 30 years’ experience counseling politicians, corporate executives and individuals trying to manage their reputations, I’m offering a few sound bites for the Clintons.
For Mr. Clinton:
“…Barack Obama has the skill, commitment and ability to lead the Democrats back to the White House.”
“…People say Obama is a celebrity. What’s wrong with that? Leadership has many qualities. Understanding what the electorate wants and needs wins elections.”
“…I’ve dedicated my political life to the Democratic Party. Obama shares the fundamental ideals that have made the Party great. I hope every Democrat and Independent voter rallies behind him and elects him President.”
For Sen. Clinton:
“…This is not the time to talk about what happened during the primary campaign. It’s time to turn the page. The people have spoken and I’m doing everything in my power between now and November to get Obama elected.”
“…I was honored to have 18 million Americans cast their ballots for me in the primaries. I urge those same voters, along with Independents, to cast their ballots for Obama.”
For almost two decades, the Clintons have captured and maintained a major presence in the American political landscape and dialogue. They have accomplished much, but there comes a time to elevate the political discussion and demonstrate true leadership. If their real goal is to help the Democratic Party regain the White House, they must abandon the hubris.
These actions would help solidify their legacy as two of the most remarkable political leaders in America.
Joe M. Grillo, senior vice president at Nicolazzo & Associates, contributed to this blog.
Bill and Hillary Clinton, two people with just about the largest egos in America, are in danger of ruining their legacy of political leadership and as stalwarts of the Democratic Party.
They may not realize it, but the Clintons are in crisis management mode as the nation turns its attention to the Democratic National Convention in Denver on Aug. 25-28.
From the perspective of strategic communications, politics can be a strange business. Day-in, day-out, dozens of strategists likely huddle with the Clintons to chart their next moves in the face of the Democratic Party nomination of Barack Obama and his run for the White House.
One wonders, though, are the Clintons focused on shaping their legacies, or are they interested in retaining the spotlight just to feed their egos? At stake are not just their roles at the convention, but also how history will judge them as political leaders and how Hillary will be positioned for the future.
Shaping one’s legacy is no simple matter. From the corporate world, we have the example of Jack Welch, former CEO of General Electric. Through skillful management of his legacy, Welch is now arguably more popular then ever.
At the other end of the spectrum, Dick Grasso, former head of the New York Stock Exchange, may have won his case in the court of law, but the court of public opinion is another matter. Most people view him as a greedy Wall Street type who walked away with tens of millions of dollars he didn’t deserve.
Speaking Roles Coming Into View
The Democratic National Convention is heating up for Bill and Hillary Clinton. Bill will speak on the third night before an address by the yet-to-be-named VP candidate, while Sen. Clinton is expected to speak on the convention’s second night.
Meanwhile, recent comments from the two leave one wondering if they will articulate the party line at the convention or create party divisiveness.
During a trip to Africa, Mr. Clinton said (for the record) “…you can argue that nobody is ready to be president,” and he learned a lot in his first year on the job. That remark, which made headlines across the country and throughout the world, could be viewed as tepid and unenthusiastic. Why didn’t he just say Obama was qualified?
Hillary, speaking about the same time during a Web chat, insisted she’s sincerely behind Obama after someone asked whether she truly was supporting him or was “just saying what you have to?”
In a video, Sen. Clinton seems to be inviting more dissent from her supporters at the Democratic Convention when she says, “…I’ve made it very clear that I’m supporting Obama, and we’re working cooperatively on a lot of different matters. But delegates can decide what they want to do on their own; they don’t need my permission.”
As The New York Times pointed out in an Aug. 8 analysis, having one Clinton, let alone two, hover over you during a Presidential campaign can be trying. Just ask Al Gore.
Some may recall that the Gore campaign tried to keep Mr. Clinton out of the limelight at the L.A. convention in 2000, giving him a speaking role on Monday night. But Mr. Clinton arrived the previous Friday and was the toast of the town for nearly three days leading up to his speech.
What might the Clintons have up their sleeves for Denver?
It’s hard not to see that, so far, the Clintons are all about being the Clintons. If they disrupt the convention and further split the party, John McCain is likely to win. For their part, the Clintons risk being despised by the Party for years to come.
Rx to Protect Their Legacy
The Clintons should, of course, speak at the convention. After all, Bill is a former president and Hillary (by her own count) captured 18 million votes in the primaries. However, what they need to understand is what they say and how they say it will have a direct impact on their reputations and legacy.
History tells us that it only takes a few pointed comments to the national media to create a lasting impression (“Read my lips: no new taxes”, George H.W. Bush, 1988 Republican National Convention). Based on more than 30 years’ experience counseling politicians, corporate executives and individuals trying to manage their reputations, I’m offering a few sound bites for the Clintons.
For Mr. Clinton:
“…Barack Obama has the skill, commitment and ability to lead the Democrats back to the White House.”
“…People say Obama is a celebrity. What’s wrong with that? Leadership has many qualities. Understanding what the electorate wants and needs wins elections.”
“…I’ve dedicated my political life to the Democratic Party. Obama shares the fundamental ideals that have made the Party great. I hope every Democrat and Independent voter rallies behind him and elects him President.”
For Sen. Clinton:
“…This is not the time to talk about what happened during the primary campaign. It’s time to turn the page. The people have spoken and I’m doing everything in my power between now and November to get Obama elected.”
“…I was honored to have 18 million Americans cast their ballots for me in the primaries. I urge those same voters, along with Independents, to cast their ballots for Obama.”
For almost two decades, the Clintons have captured and maintained a major presence in the American political landscape and dialogue. They have accomplished much, but there comes a time to elevate the political discussion and demonstrate true leadership. If their real goal is to help the Democratic Party regain the White House, they must abandon the hubris.
These actions would help solidify their legacy as two of the most remarkable political leaders in America.
Joe M. Grillo, senior vice president at Nicolazzo & Associates, contributed to this blog.
Wednesday, January 09, 2008
Roger's World: Let There Be Doubt
As bizarre as it may sound, Roger Clemens and his legal team may have devised a good strategy in reputation management – they just got off to a late start.
Clemens’ battle with Brian McNamee, his accusatory former trainer, has played out a bit like the one-on-one showdowns that routinely occurred when the Rocket was facing a tough batter on the mound.
McNamee told federal and baseball investigators that he injected Clemens with performance-enhancing drugs from 1998 through 2001. His statements ended up in the now infamous Mitchell Report released in December.
Almost instantly, Clemens reputation, which he points out is the result of 25 years of hard work, went “poof.” In today’s media-crazed communications environment, that’s apparently all it takes.
The episode illustrates an important strategy when it comes to reputation management: if you have the slightest inkling that someone is about to attack you, make some early moves to counter the impact before it hits the press.
In this case, Clemens told a 60 Minutes audience that he was unaware that McNamee was going to testify against him. He also admitted he declined to meet with Mitchell report investigators “as did a lot of other players.”
Bad move. As Roger must know from his career on the diamond, playing “catch up” has always been difficult at best.
While they may not have known the specifics, Clemens and his lawyers -- and for that matter every sports fan in America -- knew the report was going to be publicly released.
In my view, to help mitigate the impact, Clemens should have volunteered to speak with the investigators and deny steroid use. He could also have brought McNamee’s motives into question before the report became public.
In this way, Clemens could have set the tone from the outset -- right in the contents of the report. He may have gained more control of the outcome.
Despite angry statements of denial, a video news release, the interview with Mike Wallace on 60 Minutes, a defamation lawsuit against his accuser, an agreement to testify before Congress, and a taped phone conversation with McNamee, Clemens is being roasted in the court of public opinion.
“He-Said-She-Said” Defense
The water-cooler talk says Clemens is guilty, but in reality, will anyone ever be able to prove it in a court of law?
Clemens has seemingly taken a page from the executive playbook in which a lover often boasts about a lurid affair with the CEO. The CEO retorts that there are no witnesses and the “he-said-she-said” defense works.
While appearing way out of the ordinary, Clemens’ super-aggressive communications strategy could actually put doubt in the minds of some fans and even casual observers about his innocence or guilt.
At this juncture, no witnesses have come forward to corroborate that McNamee injected Clemens with performance-enhancing drugs.
Also, to date, no one has come forward to admit they provided Clemens with steroids or needles.
No major league player has validated McNamee’s claims against Clemens. Nor has Major League baseball.
To be sure, this could change in a “New York minute.” If so, Roger Clemens has a major credibility and reputation problem.
On the other hand, one has to consider that Clemens is not currently the subject of any criminal investigation. Unlike Barry Bonds, who allegedly lied under oath, Clemens has not been called testify before a federal grand jury.
Clemens’ lawyers are likely aware that the statute of limitations has expired on illegal actions that may have occurred more than seven years ago.
Some observers think Clemens will trip himself up when he testifies before Congress on January 16 because he’ll be under oath.
But realistically, what can happen? He’s already stated publicly what he plans to tell Congress. NcNamee, who is also expected to testify, will likely repeat what he told baseball investigators.
The net result of all this will bring us right back where we started: Clemens’ word and credibility against McNamee’s.
For sure, Clemens’ arrogance and even childish behavior has made him and his career another “victim” of the baseball steroid controversy.
However, unless some new facts come to light, there will always be some lingering doubt about the truth.
In the world of Roger Clemens, that may be the all-time-great legacy he so desperately wants to defend.
Joe M. Grillo, a senior vice president at Nicolazzo & Associates, contributed to this blog.
Clemens’ battle with Brian McNamee, his accusatory former trainer, has played out a bit like the one-on-one showdowns that routinely occurred when the Rocket was facing a tough batter on the mound.
McNamee told federal and baseball investigators that he injected Clemens with performance-enhancing drugs from 1998 through 2001. His statements ended up in the now infamous Mitchell Report released in December.
Almost instantly, Clemens reputation, which he points out is the result of 25 years of hard work, went “poof.” In today’s media-crazed communications environment, that’s apparently all it takes.
The episode illustrates an important strategy when it comes to reputation management: if you have the slightest inkling that someone is about to attack you, make some early moves to counter the impact before it hits the press.
In this case, Clemens told a 60 Minutes audience that he was unaware that McNamee was going to testify against him. He also admitted he declined to meet with Mitchell report investigators “as did a lot of other players.”
Bad move. As Roger must know from his career on the diamond, playing “catch up” has always been difficult at best.
While they may not have known the specifics, Clemens and his lawyers -- and for that matter every sports fan in America -- knew the report was going to be publicly released.
In my view, to help mitigate the impact, Clemens should have volunteered to speak with the investigators and deny steroid use. He could also have brought McNamee’s motives into question before the report became public.
In this way, Clemens could have set the tone from the outset -- right in the contents of the report. He may have gained more control of the outcome.
Despite angry statements of denial, a video news release, the interview with Mike Wallace on 60 Minutes, a defamation lawsuit against his accuser, an agreement to testify before Congress, and a taped phone conversation with McNamee, Clemens is being roasted in the court of public opinion.
“He-Said-She-Said” Defense
The water-cooler talk says Clemens is guilty, but in reality, will anyone ever be able to prove it in a court of law?
Clemens has seemingly taken a page from the executive playbook in which a lover often boasts about a lurid affair with the CEO. The CEO retorts that there are no witnesses and the “he-said-she-said” defense works.
While appearing way out of the ordinary, Clemens’ super-aggressive communications strategy could actually put doubt in the minds of some fans and even casual observers about his innocence or guilt.
At this juncture, no witnesses have come forward to corroborate that McNamee injected Clemens with performance-enhancing drugs.
Also, to date, no one has come forward to admit they provided Clemens with steroids or needles.
No major league player has validated McNamee’s claims against Clemens. Nor has Major League baseball.
To be sure, this could change in a “New York minute.” If so, Roger Clemens has a major credibility and reputation problem.
On the other hand, one has to consider that Clemens is not currently the subject of any criminal investigation. Unlike Barry Bonds, who allegedly lied under oath, Clemens has not been called testify before a federal grand jury.
Clemens’ lawyers are likely aware that the statute of limitations has expired on illegal actions that may have occurred more than seven years ago.
Some observers think Clemens will trip himself up when he testifies before Congress on January 16 because he’ll be under oath.
But realistically, what can happen? He’s already stated publicly what he plans to tell Congress. NcNamee, who is also expected to testify, will likely repeat what he told baseball investigators.
The net result of all this will bring us right back where we started: Clemens’ word and credibility against McNamee’s.
For sure, Clemens’ arrogance and even childish behavior has made him and his career another “victim” of the baseball steroid controversy.
However, unless some new facts come to light, there will always be some lingering doubt about the truth.
In the world of Roger Clemens, that may be the all-time-great legacy he so desperately wants to defend.
Joe M. Grillo, a senior vice president at Nicolazzo & Associates, contributed to this blog.
Friday, November 09, 2007
Oprah Does It Right
Most love her and some despise her, but no one can question Oprah Winfrey’s crisis management skills.
Faced with an ugly abuse scandal at her school for disadvantaged South African girls, Winfrey stepped up in a major way and apologized to these young women on a world stage.
Only hours after an accused dormitory matron appeared in court near Johannesburg, South Africa, Winfrey spoke openly and from the heart in a video news conference aired by satellite and posted on the Internet.
Sounding more like an embattled chief executive officer than America’s television talk-show sweetheart, Winfrey articulated all the right emotions by coming across as outraged, sensitive, caring and human.
Looking straight into the camera, the diva said, “She wept for half an hour when she heard about the abuse. A horrible situation has been uncovered and rooted out. The buck always stops with me.”
In what can best be described as a “take charge” attitude, Winfrey promised to “clean house,” starting with the headmistress of the school. She also admitted the screening process was inadequate and officials at the school had told students to “put on happy faces” and not complain to her.
Going even further in the court of public opinion, she helped detail the investigation that led to an arrest. “One of the most devastating, if not the most devastating experience of my life,” she said.
Winfrey knows what it’s like to be a victim (she was molested when she was four and raped when she was nine). Now that she has the power to do something about it, she acted swiftly and decisively.
The school mess is a crash landing from all the media fanfare that occurred back in January when celebrities like Nelson Mandela, Mariah Carey, Tina Turner, and Spike Lee helped open the $40 million school.
Textbook Crisis Management
Granted, Winfrey is about as media savvy as they come, but still, she exhibited textbook techniques and expertise in how to handle a modern-day crisis. Consider some of the key elements at work:
• She got her facts straight; she traveled to South Africa and worked with police and a noted child psychiatrist. She then kept silent until officials concluded their investigation.
• Her well-timed press conference controlled the message before it began to control her.
• By using satellite and Internet technology, she ensured timely and accurate dissemination of critical information to her key audiences.
• She used candor to help maintain her stature and credibility.
• By acting quickly, she likely minimized damage to her standing as a television personality, businesswoman, entrepreneur, and courageous pioneer in helping the world’s disadvantaged.
• Designating herself as spokesperson, she spoke for the school with a single, powerful voice.
• She was truthful, didn’t hide from the media, and answered all the difficult questions.
Winfrey’s decisive and swift actions stand in stark contrast to some recent crises, including some I have blogged on.
Mattel, the big toy company, is still digging out from massive recalls of toys made in China. When asked by journalists why it took the company so long to announce the recall, the CEO said, “…the company discloses problems on its own timetable because it believes both the law and the U.S. Consumer Products Safety Commission’s enforcement practices are unreasonable.”
Hardly reassuring.
TJX Cos., a national retailer, continues to deal with the aftermath of a security breach that exposed millions of customer credit and debit card numbers. The company waited a full month to go public with the information.
When Bank of America had some computer tapes stolen, it waited two months to notify customers. Even the U.S. government waited several weeks before disclosing someone had walked off with a government-owned laptop computer containing Social Security information for 25.6 million U.S. citizens.
To be sure, there are problems that need to be solved at Winfrey’s school. The six victimized girls, aged 13-15 and a 23-year-old, are receiving mental health counseling and have the support and care of their friends.
Scrutiny of the school’s operation will continue for some time, but, in my view, Winfrey has taken command and set the tone for remedial action.
In her own intimate style, Winfrey said, “I am prepared to do whatever is necessary to make sure the Oprah Winfrey Leadership Academy for Girls becomes the safe, nurturing and enriched setting that I had envisioned. It will become a model for the world.”
Once again, she has proven her mettle in a tense, emotionally-charged situation that would test anyone’s communications skills. If she ever gets tired of TV, crisis management counseling might be in the offing.
Joe M. Grillo, senior vice president at Nicolazzo & Associates, contributed to this blog.
Faced with an ugly abuse scandal at her school for disadvantaged South African girls, Winfrey stepped up in a major way and apologized to these young women on a world stage.
Only hours after an accused dormitory matron appeared in court near Johannesburg, South Africa, Winfrey spoke openly and from the heart in a video news conference aired by satellite and posted on the Internet.
Sounding more like an embattled chief executive officer than America’s television talk-show sweetheart, Winfrey articulated all the right emotions by coming across as outraged, sensitive, caring and human.
Looking straight into the camera, the diva said, “She wept for half an hour when she heard about the abuse. A horrible situation has been uncovered and rooted out. The buck always stops with me.”
In what can best be described as a “take charge” attitude, Winfrey promised to “clean house,” starting with the headmistress of the school. She also admitted the screening process was inadequate and officials at the school had told students to “put on happy faces” and not complain to her.
Going even further in the court of public opinion, she helped detail the investigation that led to an arrest. “One of the most devastating, if not the most devastating experience of my life,” she said.
Winfrey knows what it’s like to be a victim (she was molested when she was four and raped when she was nine). Now that she has the power to do something about it, she acted swiftly and decisively.
The school mess is a crash landing from all the media fanfare that occurred back in January when celebrities like Nelson Mandela, Mariah Carey, Tina Turner, and Spike Lee helped open the $40 million school.
Textbook Crisis Management
Granted, Winfrey is about as media savvy as they come, but still, she exhibited textbook techniques and expertise in how to handle a modern-day crisis. Consider some of the key elements at work:
• She got her facts straight; she traveled to South Africa and worked with police and a noted child psychiatrist. She then kept silent until officials concluded their investigation.
• Her well-timed press conference controlled the message before it began to control her.
• By using satellite and Internet technology, she ensured timely and accurate dissemination of critical information to her key audiences.
• She used candor to help maintain her stature and credibility.
• By acting quickly, she likely minimized damage to her standing as a television personality, businesswoman, entrepreneur, and courageous pioneer in helping the world’s disadvantaged.
• Designating herself as spokesperson, she spoke for the school with a single, powerful voice.
• She was truthful, didn’t hide from the media, and answered all the difficult questions.
Winfrey’s decisive and swift actions stand in stark contrast to some recent crises, including some I have blogged on.
Mattel, the big toy company, is still digging out from massive recalls of toys made in China. When asked by journalists why it took the company so long to announce the recall, the CEO said, “…the company discloses problems on its own timetable because it believes both the law and the U.S. Consumer Products Safety Commission’s enforcement practices are unreasonable.”
Hardly reassuring.
TJX Cos., a national retailer, continues to deal with the aftermath of a security breach that exposed millions of customer credit and debit card numbers. The company waited a full month to go public with the information.
When Bank of America had some computer tapes stolen, it waited two months to notify customers. Even the U.S. government waited several weeks before disclosing someone had walked off with a government-owned laptop computer containing Social Security information for 25.6 million U.S. citizens.
To be sure, there are problems that need to be solved at Winfrey’s school. The six victimized girls, aged 13-15 and a 23-year-old, are receiving mental health counseling and have the support and care of their friends.
Scrutiny of the school’s operation will continue for some time, but, in my view, Winfrey has taken command and set the tone for remedial action.
In her own intimate style, Winfrey said, “I am prepared to do whatever is necessary to make sure the Oprah Winfrey Leadership Academy for Girls becomes the safe, nurturing and enriched setting that I had envisioned. It will become a model for the world.”
Once again, she has proven her mettle in a tense, emotionally-charged situation that would test anyone’s communications skills. If she ever gets tired of TV, crisis management counseling might be in the offing.
Joe M. Grillo, senior vice president at Nicolazzo & Associates, contributed to this blog.
Friday, April 13, 2007
Keeping Don Imus on the Air Wasn't Worth the PR Hit
This time, even Don Imus’ loyal listeners couldn’t save him. As the old adage goes, “there’s many a slip between the cup and the lip.” In this case, it was an aging radio shock jock who had probably been around the same block too many times.
Like most national media firestorms, this one started with an inflammatory comment that should have never been made. When Imus said the Rutgers women’s basketball team “had tattoos and was a bunch of nappy-headed hos” the outrage began and continued unabated for more than a week.
Initially, Imus acted out a script right from the crisis communications playbook. He apologized on the air. He made himself available for interviews with major media outlets so he could apologize again. He apologized on the Today Show. He went on Al Sharpton’s radio talk show to confront the racist issue and, what else, apologize again. He then offered to meet with the Rutgers coaches and players in private, which he did on the same day he was fired.
Despite all the mea culpas, there were early signs that, this time, genuflecting before the national altar of public repentance was not going to work. The shouting was just too loud.
Public Image Counts
Sponsors of shows like Imus’ are often careful not to stifle the talent or try to dictate editorial content. After all, if you handcuff the host and take away the entertainment value, the program becomes just like any other talk show. That can actually hurt ratings.
To be fair, Imus has a soft side. He has demonstrated a consistent commitment to raise funds for charity and donate his time to good causes. Each year, more than 100 sick children are brought to his ranch for visits hosted by him and his wife. Ironically, his last day on the air was devoted to a charity radio-a-thon.
Exactly one week after the on-air gaffe, MSNBC announced it was dropping Imus’ morning program after a succession of advertisers suspended sponsorship of his cable TV simulcast.
The pressure on MSNBC was building after seven major advertisers – including top sponsors Sprint Nextel Corp. and GM – dropped their ads for the show. Imus has also lost ad support from American Express, Procter & Gamble, Bigelow Tea, Staples Inc., and drug maker GlaxoSmithKline.
Jeannie Tharrington, a spokesperson for Procter & Gamble seemed to have it right when she told The New York Times: “We have to first think about our consumers. So anyplace where our advertising appears that is offensive to our consumers is not acceptable to us.”
On day eight of the simmering controversy, CBS radio announced it was canceling Imus’ nationally syndicated show, which had been a long-running mix of tasteless rhetoric and political commentary.
Initially, Leslie Moonves, CBS president and CEO, suspended Imus’ show for two weeks. In the end, the rising tide was simply too much even for an industry tough guy like Moonves (his company also owns the MTV and BET cable networks).
Money or Morality
Imus’ program, which drew an estimated two million viewers and listeners each day, had become a cash cow for his bosses. It was reported that his program generated in excess of $20 million in annual revenue for CBS Radio and the flagship New York radio station, WFAN. The press also reported that when ad revenue for affiliates and MSNBC were figured in, the amount exceeded $50 million.
One could argue that, at the beginning, his bosses at CBS actually gave him a break. Why wait to suspend him? Why wasn’t he taken off the air immediately? By allowing him to remain on the air for several days after the derogatory, racist remark, he had a chance to defend himself and seek whatever sympathy he could muster.
In my view, we continue to witness episodes like this because the institutions that enable this type of behavior refuse to take stock of their moral compass.
Look at the major organizations involved in Imus’ show: CBS Radio produced it. WFAN in New York City was the flagship station. Westwood One nationally syndicated the show. MSNBC simulcasted the show on its cable channel, and MSNBC is part of NBC Universal, which is owned by the conglomerate General Electric Co.
Every entity involved here should rethink what type of shows it puts on the air and the quality of the people it hires. By creating the forum, the enablers have allowed Imus and others to become iconoclastic, irreverent symbols of political incorrectness.
Shock jocks, in particular, are bred to be rude, inconsiderate, arrogant, egotistical, crass and bitter. They’ve typically survived by taking cheap shots at politicians, entertainers, athletes and dozens of others in the public eye.
Imus is not alone in this category. Names like Rush Limbaugh, Bill O’Reilly, Howard Stern, Ann Coulter, Al Sharpton, Opie and Anthony, Jessie Jackson, and Doug “Greaseman” Tracht come to mind.
While many of the targets have bulls eyes painted on their heads because of who they are, people like the young, high-achieving student female athletes on the Rutgers basketball team did not deserve to be made fun of by an over-the-hill jock who liked to pick the bones of his victims clean.
We can agree that free speech is a fundamental right of all Americans. However, for someone like Imus, who has a national platform, using the public airwaves to impose his outrageous and twisted views on his listeners crossed the lines of fairness, taste, propriety, and common sense.
Maybe this episode will make institutions think twice about creating programming and promoting people who make a living by offending others.
Like most national media firestorms, this one started with an inflammatory comment that should have never been made. When Imus said the Rutgers women’s basketball team “had tattoos and was a bunch of nappy-headed hos” the outrage began and continued unabated for more than a week.
Initially, Imus acted out a script right from the crisis communications playbook. He apologized on the air. He made himself available for interviews with major media outlets so he could apologize again. He apologized on the Today Show. He went on Al Sharpton’s radio talk show to confront the racist issue and, what else, apologize again. He then offered to meet with the Rutgers coaches and players in private, which he did on the same day he was fired.
Despite all the mea culpas, there were early signs that, this time, genuflecting before the national altar of public repentance was not going to work. The shouting was just too loud.
Public Image Counts
Sponsors of shows like Imus’ are often careful not to stifle the talent or try to dictate editorial content. After all, if you handcuff the host and take away the entertainment value, the program becomes just like any other talk show. That can actually hurt ratings.
To be fair, Imus has a soft side. He has demonstrated a consistent commitment to raise funds for charity and donate his time to good causes. Each year, more than 100 sick children are brought to his ranch for visits hosted by him and his wife. Ironically, his last day on the air was devoted to a charity radio-a-thon.
Exactly one week after the on-air gaffe, MSNBC announced it was dropping Imus’ morning program after a succession of advertisers suspended sponsorship of his cable TV simulcast.
The pressure on MSNBC was building after seven major advertisers – including top sponsors Sprint Nextel Corp. and GM – dropped their ads for the show. Imus has also lost ad support from American Express, Procter & Gamble, Bigelow Tea, Staples Inc., and drug maker GlaxoSmithKline.
Jeannie Tharrington, a spokesperson for Procter & Gamble seemed to have it right when she told The New York Times: “We have to first think about our consumers. So anyplace where our advertising appears that is offensive to our consumers is not acceptable to us.”
On day eight of the simmering controversy, CBS radio announced it was canceling Imus’ nationally syndicated show, which had been a long-running mix of tasteless rhetoric and political commentary.
Initially, Leslie Moonves, CBS president and CEO, suspended Imus’ show for two weeks. In the end, the rising tide was simply too much even for an industry tough guy like Moonves (his company also owns the MTV and BET cable networks).
Money or Morality
Imus’ program, which drew an estimated two million viewers and listeners each day, had become a cash cow for his bosses. It was reported that his program generated in excess of $20 million in annual revenue for CBS Radio and the flagship New York radio station, WFAN. The press also reported that when ad revenue for affiliates and MSNBC were figured in, the amount exceeded $50 million.
One could argue that, at the beginning, his bosses at CBS actually gave him a break. Why wait to suspend him? Why wasn’t he taken off the air immediately? By allowing him to remain on the air for several days after the derogatory, racist remark, he had a chance to defend himself and seek whatever sympathy he could muster.
In my view, we continue to witness episodes like this because the institutions that enable this type of behavior refuse to take stock of their moral compass.
Look at the major organizations involved in Imus’ show: CBS Radio produced it. WFAN in New York City was the flagship station. Westwood One nationally syndicated the show. MSNBC simulcasted the show on its cable channel, and MSNBC is part of NBC Universal, which is owned by the conglomerate General Electric Co.
Every entity involved here should rethink what type of shows it puts on the air and the quality of the people it hires. By creating the forum, the enablers have allowed Imus and others to become iconoclastic, irreverent symbols of political incorrectness.
Shock jocks, in particular, are bred to be rude, inconsiderate, arrogant, egotistical, crass and bitter. They’ve typically survived by taking cheap shots at politicians, entertainers, athletes and dozens of others in the public eye.
Imus is not alone in this category. Names like Rush Limbaugh, Bill O’Reilly, Howard Stern, Ann Coulter, Al Sharpton, Opie and Anthony, Jessie Jackson, and Doug “Greaseman” Tracht come to mind.
While many of the targets have bulls eyes painted on their heads because of who they are, people like the young, high-achieving student female athletes on the Rutgers basketball team did not deserve to be made fun of by an over-the-hill jock who liked to pick the bones of his victims clean.
We can agree that free speech is a fundamental right of all Americans. However, for someone like Imus, who has a national platform, using the public airwaves to impose his outrageous and twisted views on his listeners crossed the lines of fairness, taste, propriety, and common sense.
Maybe this episode will make institutions think twice about creating programming and promoting people who make a living by offending others.
Friday, February 23, 2007
JetBlue Lives Its Own Valentine's Day Massacre
For JetBlue, it must have seemed like the second coming of the infamous St. Valentine’s Day Massacre when Al Capone knocked off seven of Bugs Moran’s men.
February 14, 2007 will likely go down as the worst day in JetBlue’s history. Thank God no one was hurt in this mess.
I guess one can give JetBlue Airways president David Neeleman some credit: within a couple of days, he stepped up and took responsibility for the stunning meltdown his airline experienced in New York City and around the country.
Taking a page from the current playbook on crisis management, Neeleman, his voice cracking a bit, told the national news media he was “humiliated and mortified” by the massive breakdown that hobbled the airline’s operations for nearly a week.
He then pledged to institute a voucher system that would increase in value according to the length of the delay. The airline has also unveiled a “customer bill of rights” that will compensate passengers for slip-ups and ensure that they don’t find themselves trapped for hours on planes waiting to take off or trying to return to a gate.
Crisis experts – me included – can probably agree that by taking the bull by the horns Neeleman and his low-cost carrier will stop thousands of customers from defecting to other airlines. In today’s business environment, admitting mistakes has proven effective in rebounding from a crisis.
On the other hand, JetBlue gets an “F” for not having a crisis/operational management plan in place that could have avoided this fiasco in the first place. Shockingly for a CEO, Neeleman admits as much.
He told The New York Times his company had an emergency control center full of people who didn’t know what to do. Why weren’t they better prepared and sufficiently trained?
There were flight attendants sitting in hotel rooms for three days who couldn’t get in touch with their own company. Where was the communications protocol?
In a revelation that really stings, he admitted pilots were emailing him and saying, “I’m available, what do I do?” Why couldn’t he answer?
Neeleman said the crisis, which led to about 1,000 cancelled flights in five days, “…was the result of a shoestring communications system that left pilots and flight attendants in the dark…” Isn’t this confirming a major failure on management’s part?
Penny-Wise, Pound Foolish
While it’s going to take a while to determine how much business JetBlue loses down the line, the immediate costs are staggering. On network television, Neeleman said the tab to reimburse passengers could cost the airline $30 million or more.
Wall Street will also likely punish the stock in the short-term. The damage to JetBlue’s brand is also likely to be huge. Some customers are already grumbling “they’ll never be back.”
One can speculate what would have happened if JetBlue had spent $1 million on a rock solid crisis management and training plan that could have been deployed at a moment’s notice.
Most CEOs I know would be happy to spend a million to save 30 times that, but surprisingly few CEOs are willing to invest the necessary resources to institute the right crisis avoidance policies and procedures.
In many crises, outsiders like myself often have to speculate what kind of contingency plans a company has in place. For the most part, these plans are highly confidential and only signed off on by top senior management.
This case is different.
The CEO himself admits JetBlue had neither the people or the plans in place to deal with a perfect storm like the one that hit on Valentine’s Day. Candor was the only way out.
A media darling for most of its seven-year existence, JetBlue now finds itself in the cross hairs of its employees, customers, the FAA, airport personnel, consumer advocates and Congress.
This episode once again proves that strategic communications and crisis management plans are fast becoming the model that American businesses must adapt to survive in a crisis and retain brand and management integrity.
Increasingly, institutions are being judged not by the crisis itself, but by how the crisis is managed. Time and time again, we are witnessing major business crises in which institutions seem unprepared for the worst.
Time will tell if JetBlue becomes the poster child for how not to do it. Meanwhile, the crisis management planning business just got a major shot in the arm!
Joe M. Grillo, a senior vice president at Nicolazzo & Associates, contributed to this blog.
Tuesday, February 20, 2007
Security Breaches: Lack of Communication is Giving Consumers the Shaft
Has anyone noticed a disturbing pattern in security breaches at major U.S. companies?
Due to slow – and even deliberate – delayed communications, consumers are getting the shaft.
The most recent case flared up in mid-January when TJX Cos., a Framingham, Mass. retailer that runs T.J. Maxx, Marshalls, Home Goods and other stores, disclosed a data theft that exposed millions of customer credit and debit card numbers.
Like several past instances, consumers were NOT notified right away. In the case of TJX, the company waited about a month. A couple of years ago when Bank of America had some computer tapes stolen, it waited two months to notify customers.
Even the U.S. government waited several weeks before disclosing someone had walked off with a government-owned laptop containing Social Security information for 25.6 million U.S. citizens.
Corporate executives, government investigators, and legal counselors have been postulating that the communication gap exists because it gives the authorities time to catch the bad guys.
This may sound good on paper, but it doesn’t do much for the consumer.
I’m in agreement that the ultimate objective is to catch these thieves and throw the book at them. However, companies are bucking a clear trend: the customer (in this case the consumer) comes first.
Take a closer look at the TJX case.
According to a report in The Boston Globe, a New Bedford, Mass. city employee said $6,700 in charges suddenly appeared on his Visa card in January of 2007. It’s the same credit card he used while shopping at a T.J. Maxx store last December.
Does TJX really think it utilized the right communications strategy by waiting a month to tell this consumer about the breach? If you were this shopper, what would you think about TJX?
Could it be that TJX did not want to announce the breach in December because it would have severely impacted its Christmas sales?
My 30-plus years experience in strategic communications tells me this dynamic must change.
By waiting to tell the consumer about breaches, companies are risking major damage to their reputations and brands and even a substantial drop in sales.
While it’s true that banks and other credit card issuers usually pick up the tab for bogus charges, there is still a huge psychological impact on the consumer. People whose personal data is stolen feel violated.
It may be gradual, but the American public is going to stand up against this behavior and demand to know right away that someone has stolen their financial data. At some point, it seems logical that consumers will organize boycotts against companies that compromise their personal data.
To make matters worse, some companies are making security breach announcements without solid contingency communication plans in place to deal with the fallout.
At the risk of picking on TJX, the company seemed disorganized when the story broke. People complained that they got the run-around from customer service hotlines and the CEO was unavailable for comment.
Finally, after more than two weeks, the company took full-page ads in newspapers saying that it was sorry for the inconvenience to consumers and it was doing everything in its power to correct the problem.
If the company had a good contingency communications plan in place, it would have called for a letter like this to be written within a matter of days. Why wait? It looks like the company is hiding something.
I believe there is an Rx to contain – and even fix – this problem. It involves work on the front end and the back end.
On the front end, organizations holding the data need to build more secure systems to protect consumer information. This will involve more capital spending on encryption, security software, and other various IT tools.
On the back end, state and national political leaders need to introduce legislation that compels companies to notify consumers within five days of a security breach. There will be opposition, but it’s the right thing to do.
Meanwhile, all of us continue to hold our breath until the next security breach is announced…and we wonder if our financial data will be compromised along with our credit standing and privacy.
Due to slow – and even deliberate – delayed communications, consumers are getting the shaft.
The most recent case flared up in mid-January when TJX Cos., a Framingham, Mass. retailer that runs T.J. Maxx, Marshalls, Home Goods and other stores, disclosed a data theft that exposed millions of customer credit and debit card numbers.
Like several past instances, consumers were NOT notified right away. In the case of TJX, the company waited about a month. A couple of years ago when Bank of America had some computer tapes stolen, it waited two months to notify customers.
Even the U.S. government waited several weeks before disclosing someone had walked off with a government-owned laptop containing Social Security information for 25.6 million U.S. citizens.
Corporate executives, government investigators, and legal counselors have been postulating that the communication gap exists because it gives the authorities time to catch the bad guys.
This may sound good on paper, but it doesn’t do much for the consumer.
I’m in agreement that the ultimate objective is to catch these thieves and throw the book at them. However, companies are bucking a clear trend: the customer (in this case the consumer) comes first.
Take a closer look at the TJX case.
According to a report in The Boston Globe, a New Bedford, Mass. city employee said $6,700 in charges suddenly appeared on his Visa card in January of 2007. It’s the same credit card he used while shopping at a T.J. Maxx store last December.
Does TJX really think it utilized the right communications strategy by waiting a month to tell this consumer about the breach? If you were this shopper, what would you think about TJX?
Could it be that TJX did not want to announce the breach in December because it would have severely impacted its Christmas sales?
My 30-plus years experience in strategic communications tells me this dynamic must change.
By waiting to tell the consumer about breaches, companies are risking major damage to their reputations and brands and even a substantial drop in sales.
While it’s true that banks and other credit card issuers usually pick up the tab for bogus charges, there is still a huge psychological impact on the consumer. People whose personal data is stolen feel violated.
It may be gradual, but the American public is going to stand up against this behavior and demand to know right away that someone has stolen their financial data. At some point, it seems logical that consumers will organize boycotts against companies that compromise their personal data.
To make matters worse, some companies are making security breach announcements without solid contingency communication plans in place to deal with the fallout.
At the risk of picking on TJX, the company seemed disorganized when the story broke. People complained that they got the run-around from customer service hotlines and the CEO was unavailable for comment.
Finally, after more than two weeks, the company took full-page ads in newspapers saying that it was sorry for the inconvenience to consumers and it was doing everything in its power to correct the problem.
If the company had a good contingency communications plan in place, it would have called for a letter like this to be written within a matter of days. Why wait? It looks like the company is hiding something.
I believe there is an Rx to contain – and even fix – this problem. It involves work on the front end and the back end.
On the front end, organizations holding the data need to build more secure systems to protect consumer information. This will involve more capital spending on encryption, security software, and other various IT tools.
On the back end, state and national political leaders need to introduce legislation that compels companies to notify consumers within five days of a security breach. There will be opposition, but it’s the right thing to do.
Meanwhile, all of us continue to hold our breath until the next security breach is announced…and we wonder if our financial data will be compromised along with our credit standing and privacy.
Wednesday, October 04, 2006
Communications Failed H-P
For many years, I have been espousing the concept that senior communications professionals -- such as vice presidents of corporate communications or investor relations -- should be ex-officio members of boards of directors in major publicly traded and many private companies.
The Hewlett-Packard fiasco that has unfolded before the eyes of a stunned business world (and even Congress) once again proves the point.
Time and time again, we see boards making enterprise-wide decisions that blow up in their faces. A good example is the recent rash of cases involving the back-dating of option grants. Apple Computer comes to mind.
My last blog entry talked about the communications mess at RadioShack. The H-P debacle is worse.
I have no doubt that Patricia Dunn, former H-P board chairwoman, was genuine in her concern about board leaks to the press.
No one likes to see sensitive and confidential corporate information plastered on the front page of The New York Times or The Wall Street Journal.
What remains clear to me, though, is that even the savviest corporate executives and many board members are lacking in what I call “communications awareness and common sense.”
Far too often, decisions are made at the board level that will negatively impact a company or institution. Unfortunately, in most cases, communications experts are typically brought in to deal with flawed business decisions and strategies after these decisions have been made and the damage done.
Over the course of my 30-year career, I have been called many times by general counsels and senior corporate communications officers who need assistance because a senior management or board-level decision has backfired.
In many cases, I have been told, “…what we did was legal.” My response is usually something like “…that may be so, but is what you’re doing right, and how will these actions be viewed by your key audiences?”
Still, you hear reports of senior executives and board members telling their corporate communications officers to “just stonewall the press.” In some cases, this strategy is effective, but misrepresenting the facts simply never works. Ultimately, the truth comes out.
Ms. Dunn, even without the help of PR folks, continues to create her own story. In her testimony to Congress on September 28, she said she was given ironclad assurances of the legality of the methods used in the company investigation and that the word “pretexting” – impersonating people to obtain their records – never cropped up in the conversations.
I subscribe that Ms. Dunn, the rest of the board, the CEO, and the legal folks would have been well served to have a thoughtful and market-savvy communications executive at the table.
If they did, that person could have told them that any one of the roads they were contemplating would be like driving a car off a cliff.
A good communications counselor - inside or outside the company - could have advised Ms. Dunn what was happening at H-P was wrong, and if the news media ever got wind of any kind of questionable corporate snooping, public exposure of this behavior would create a major corporate scandal.
Would that counsel have stopped the clandestine operation? If the communications professional had ex-officio status, I contend there is a good likelihood that better judgment would have prevailed. Instead, the company charged ahead and the investigative methods used by H-P spiraled out of control.
In the final analysis, H-P’s reaction to the leaks was born of paranoia. Board politics – and even leaks – have been part of our business culture.
Clearly, it’s the fiduciary responsibility of board members to keep the proceedings of their meetings private and confidential. However, leaks are not the end of the world. In fact, sometimes leaks can actually help a company. In many cases, these leaks do not damage the company’s business or reputation. In the specific case H-P, the company seemed to be doing a nice job of increasing its market share and generally improving its business prospects.
Further, the current scandal has not affected H-P’s stock price. According to Damon Darlin of the New York Times (Sunday, October 1, 2006), “By any measures, the company so far has escaped any serious damage. Its stock, about the only visible barometer of public perception other than retail sales and late-night talk-show jokes, is as strong as it was before the spying operation was revealed in early September. The stock closed on Friday at $36.69, close to its 52-week high of $37.25, almost unchanged during a month of unrelenting reports of detectives obtaining personal phone records, rooting through garbage, following directors and journalists – spying on one while at Disneyland – and planning to infiltrate newsrooms with spies masquerading as janitors or clerks.”
Wall Street now looks at three criteria for publicly traded companies: growth, earnings and governance.
While H-P may still have a powerful and colorful history, this chapter of corporate behavior will become the poster child for poor corporate governance that appears to have occurred at the highest levels.
The story isn’t over, and how H-P responds going forward will have far reaching implications for its future.
In my view, a good communications professional could have told the board about the implications of its decision-making right at the beginning.
And if the board had listened, H-P wouldn’t be where it finds itself now.
The Hewlett-Packard fiasco that has unfolded before the eyes of a stunned business world (and even Congress) once again proves the point.
Time and time again, we see boards making enterprise-wide decisions that blow up in their faces. A good example is the recent rash of cases involving the back-dating of option grants. Apple Computer comes to mind.
My last blog entry talked about the communications mess at RadioShack. The H-P debacle is worse.
I have no doubt that Patricia Dunn, former H-P board chairwoman, was genuine in her concern about board leaks to the press.
No one likes to see sensitive and confidential corporate information plastered on the front page of The New York Times or The Wall Street Journal.
What remains clear to me, though, is that even the savviest corporate executives and many board members are lacking in what I call “communications awareness and common sense.”
Far too often, decisions are made at the board level that will negatively impact a company or institution. Unfortunately, in most cases, communications experts are typically brought in to deal with flawed business decisions and strategies after these decisions have been made and the damage done.
Over the course of my 30-year career, I have been called many times by general counsels and senior corporate communications officers who need assistance because a senior management or board-level decision has backfired.
In many cases, I have been told, “…what we did was legal.” My response is usually something like “…that may be so, but is what you’re doing right, and how will these actions be viewed by your key audiences?”
Still, you hear reports of senior executives and board members telling their corporate communications officers to “just stonewall the press.” In some cases, this strategy is effective, but misrepresenting the facts simply never works. Ultimately, the truth comes out.
Ms. Dunn, even without the help of PR folks, continues to create her own story. In her testimony to Congress on September 28, she said she was given ironclad assurances of the legality of the methods used in the company investigation and that the word “pretexting” – impersonating people to obtain their records – never cropped up in the conversations.
I subscribe that Ms. Dunn, the rest of the board, the CEO, and the legal folks would have been well served to have a thoughtful and market-savvy communications executive at the table.
If they did, that person could have told them that any one of the roads they were contemplating would be like driving a car off a cliff.
A good communications counselor - inside or outside the company - could have advised Ms. Dunn what was happening at H-P was wrong, and if the news media ever got wind of any kind of questionable corporate snooping, public exposure of this behavior would create a major corporate scandal.
Would that counsel have stopped the clandestine operation? If the communications professional had ex-officio status, I contend there is a good likelihood that better judgment would have prevailed. Instead, the company charged ahead and the investigative methods used by H-P spiraled out of control.
In the final analysis, H-P’s reaction to the leaks was born of paranoia. Board politics – and even leaks – have been part of our business culture.
Clearly, it’s the fiduciary responsibility of board members to keep the proceedings of their meetings private and confidential. However, leaks are not the end of the world. In fact, sometimes leaks can actually help a company. In many cases, these leaks do not damage the company’s business or reputation. In the specific case H-P, the company seemed to be doing a nice job of increasing its market share and generally improving its business prospects.
Further, the current scandal has not affected H-P’s stock price. According to Damon Darlin of the New York Times (Sunday, October 1, 2006), “By any measures, the company so far has escaped any serious damage. Its stock, about the only visible barometer of public perception other than retail sales and late-night talk-show jokes, is as strong as it was before the spying operation was revealed in early September. The stock closed on Friday at $36.69, close to its 52-week high of $37.25, almost unchanged during a month of unrelenting reports of detectives obtaining personal phone records, rooting through garbage, following directors and journalists – spying on one while at Disneyland – and planning to infiltrate newsrooms with spies masquerading as janitors or clerks.”
Wall Street now looks at three criteria for publicly traded companies: growth, earnings and governance.
While H-P may still have a powerful and colorful history, this chapter of corporate behavior will become the poster child for poor corporate governance that appears to have occurred at the highest levels.
The story isn’t over, and how H-P responds going forward will have far reaching implications for its future.
In my view, a good communications professional could have told the board about the implications of its decision-making right at the beginning.
And if the board had listened, H-P wouldn’t be where it finds itself now.
Sunday, September 10, 2006
RadioShack Adds Insult to Injury
One can only wonder how bad it is to be working these days at RadioShack headquarters in Forth Worth, Texas.
On August 30, the company notified about 400 workers that they were being dismissed immediately as part of planned job cuts.
So what’s the big deal? Companies lay off hundreds – even thousands – of employees all the time.
RadioShack, in what has to be one of the biggest communications blunders of all time, told the employees they were fired by “e-mail.” You read that right, “pink slip e-mails.”
The action follows an announcement earlier in the month in which the company said it would eliminate jobs, mostly at headquarters, to cut expenses and improve its long-term position in the marketplace.
Already, RadioShack has closed nearly 500 stores, consolidated distribution centers and liquidated slow-moving merchandise to shake out of a sales slump.
If you’ve been following the news, you’ll recognize this as the same company that fired its CEO, David Edmondson, six months ago for fabricating part of his resume.
When news first broke of the latest fiasco, Derrick D’Souza, a management professor at the University of North Texas, was quoted in an Associated Press story as saying “he had never heard of such a large number of terminated employees being notified electronically.”
“If I put myself in their shoes, I’d say, ‘Didn’t they have a few minutes to tell me.’ “ He added that the move could be seen as “dehumanizing” to employees.
That has to be the understatement of the year.
Having spent more than 30 years in the business of public relations, strategic communications and crisis management, this goes down in my book as the most insensitive, callous, reprehensible misguided use of management power I’ve ever heard of.
Granted, new communications mediums have permeated all our lives. We search for jobs online, apply for them via e-mail, use company Intranets to change benefits packages, manage company pension portfolios, and use the Internet to work from home and the road.
But are we to assume that the normal progression of the medium is to fire employees by e-mail?
Long-standing research indicates that in any layoff situation the most important audience is the remaining employees. How a company dismisses employees directly impacts the future job performance and productivity of those who remain.
The Corporate Learning Institute, a team building organization that works with large for-profit companies, says, “Many companies are finding it necessary to restructure and this can have a negative impact on employee morale. Confusion and uncertainty among the people in any company will lead to low efficiency and productivity, dragging the entire organization down.”
With its ranks shrinking, RadioShack may have felt it did not have the human resources bandwidth to individually speak to each fired worker. Surely, no senior manager with even an ounce of heart could have thought this “e-mail pink slip” was a good idea.
There were certainly ways around it. The firm could have hired an outplacement firm to help. It could have spoken to employees in groups. It could have staggered the dismissals.
The hard work (preparing the severance packages and required termination documentation) was already done. It couldn’t have taken more than a few hours of time to speak to the employees in person.
Now, the company has poisoned the well. Morale at headquarters is likely to sink to a new low. Poor attitudes could easily penetrate to the retail level. Moving forward, recruiting good people is likely to be next to impossible.
This action cuts at such a raw nerve that I wouldn’t be surprised if some consumers boycott the stores.
Eventually, this uproar will fade from the news. RadioShack will trudge on, trying to turn things around as best it can. It will be interesting to see how this publicly traded company performs in the near and long term. No matter what happens, this company gets top billing in the communications hall of shame.
I’ll make one wager: if further cuts are needed, it won’t be done by e-mail.
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