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.

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.

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.