Crisis Management Archive

Dan Gilbert Steals the Show from LeBron “The Decision” James — Lessons in a $100 Million PR Disaster

July 9th, 2010

The Blog Aesthetic won’t comment on the surreal, bizarre, hype-induced PR spectacle that generated from LeBron “The Decision” James, er, decision to leave the Cleveland Cavaliers pro basketball franchise to join the rival Miami Heat.  To sum up, LeBron James, the best player in the NBA today, took advantage of his free agency status to switch teams.  In turn, several franchises fell over each other to leverage their home towns to woo James (and other stars), often rather pathetically but nevertheless in the spirit of full-bore business competition.

James’s decision to announce his decision on his own puff-piece TV special titled “The Decision” was derided as classless, arrogant, and self-serving to the core.  And when you’ve made $90 million even before scoring your first pro points, avarice gets thrown in the mix. With an economy still in the tank and staggering job losses nationally, greed is an impossible image to reconcile with the cry for fairness and sportsmanship.

That being said, the public relations perspective is to consider the impact on all stakeholders.  Surely that includes rightly disappointed Cleveland fans, even if they did show their anger in appalling ways.

But within the city is another key stakeholder – the Cavaliers franchise, and namely the team owner, Dan Gilbert.  If you’re on the line for hundred million dollar decisions that make/break city economies and reputations, how should you react when you don’t get your way?

Gilbert apparently thinks that being negative, cruel, and petulant – truly living up to the name “Cavalier” – is the best way to go.  And that is how a PR disaster is born.

Gilbert should have used his position to express strong disappointment with the decision, but also to take the high road and wish James well.  By throwing other similar themes into a statement, he would have validated the stern disapproval that many sports commentators gave James for his decision.  Such a message would have been capped very nicely with a call to the city and the team to look forward, play hard, and know that no single person is bigger than any sports franchise.  That is what a “team” is about, right?

Instead, Gilbert issued a harsh and incendiary open-letter to Cleveland, where he called James “cowardly …. shameful …. disloyal …. heartless …. callous” and explained how “bad karma” will follow him to Miami.  Beyond acting like an immature baby over the episode, Gilbert gets himself into a total contradiction – in blasting James with short-sighted taunts, Gilbert says that James “sends the exact opposite lesson of what we would want our children to learn.”

With this ill-advised rant, Gilbert has managed the impossible – shifting the media narrative away from James and instead to a tone-deaf wealthy team owner who cries foul when people don’t do his every bidding.

Gilbert can start getting on the right PR track by (1) issuing an apology for his remarks, and (2) focusing on the positive, not the negative.  Until he take those basic two steps, his team remains indefinitely cursed.

Forget iPhone 4 Antenna Problems — Apple Needs Better Message on Conflict Minerals

July 2nd, 2010

Apple laid down the gauntlet to the PC in its infamous 1984 commercial announcing its new Macintosh.  Thirty years later, Apple now dominates Microsoft as world’s most valuable technology company.  Apple’s almost religious adherence to branding has paid tremendous dividends (with that customer loyalty helping CEO Steve Jobs and his company slide past PR scandal after scandal).

As part of its hip, edgy brand, Jobs has taken to answering customers’ questions over rapid-fire email.  It’s seen as yet another way that Jobs outclasses the erratic Steve Ballmer of Microsoft – whose spastic on-stage appearances are far more interesting than whatever Microsoft product he’s peddling at the time.

Recently, Jobs responded to a question about “conflict minerals” and whether Apple responsibly sources the minerals in its products.  For companies not paying attention, conflict minerals are the next blood diamonds.  There is an international movement afoot, led by activist groups in the UK and US, that is going to name and shame companies sourcing minerals primarily from the Democratic Republic of Congo – home to the world’s bloodiest ongoing conflict since World War II.  A special report by a UN group of investigators took the extraordinary step of outing several US tech companies with links to the DRC.  And even New York Times influential columnist Nicholas Kristof has moved on from Darfur to make conflict minerals and the DRC his new cause.

Perhaps Jobs is unaware of this movement, as the answer he gave a customer on this issue is not going to cut it:

“We require all of our suppliers to certify in writing that they use conflict few materials.  But honestly there is no way for them to be sure.  Until someone invents a way to chemically trace minerals from the source mine, it’s a very difficult problem.”

In Jobs’ defense, he’s technically correct.  There is no international certification for the sourcing of conflict minerals such as the Kimberly Process for blood diamonds.  However, there are groups that can help Apple and other companies clean up their supply chain and practice proper CSR.  Perhaps more importantly, Jobs could at least act like he cared more about the issue beyond calling it “difficult.”  And then there is the strange use of the word “few” rather than “free.” Conflict-few may be a concept Jobs is pioneering but the global pressure campaign will not be centered on achieving “conflict-few” minerals – it will call for an outright ban on minerals from DRC and start linking specific companies to the ongoing bloodshed.

With his inadequate response to a very serious question, Jobs stumbled into a major international issue and Apple is now square in the sights of activist groups.  As with any major global crisis, smart messaging on conflict minerals requires a concerted, ethical, and engaging PR effort to explain a company’s positions.  Quick emails won’t suffice.

Crisis Corner: Les Bleus Get the Blues

June 24th, 2010

Qu’est-ce qu’on dit “international pr crisis” en francais?

In July 1998 the Champs-Élysées was packed with millions of raucous French, and “Le Marseillaies” was being sung in every quarter of the country.  In one long week, the French were celebrating both Bastille Day and winning the World Cup, putting them on top of the world.  National pride swelled and French football was France’s premiere brand.

Contrast that with this week’s front pages of Le Monde and Le Parisien, chronicling the daily cataclysmic soap opera that passed for France’s appearance at this year’s World Cup.  It’s bad enough that Les Bleus, the French team, didn’t repeat an appearance at this year’s tournament finals. That failure alone wouldn’t generate this much venom.

Rather, it’s the French Football Federation, which has been tone deaf to the steady diet of scandal and controversy involving Les Bleus.  Things have gotten so bad that French President Nicolas Sarkozy dispatched his sports minister (what a cool job!) to dress down the French team, and is meeting with star player Thierry Henry to get to the bottom of things.

The French team was already on thin ice after squeaking through the World Cup qualifiers only by beating Ireland with a blatant handball.  At that point, France needed PR counsel on how best to re-engage the public, and also a crisis communications plan to deal with future incidents – on and off the field.  And that’s just the beginning.

Several players, including national icon Franck Ribery, were implicated in a prostitution sting with an underage girl.  Then, right before Les Bleus’ World Cup exit, star striker Nicolas Anelka was sent home after he unleashed a profanity-laced tirade against the team coach.  In protest, the entire team boycotted practice before its next match.  Captain Patrice Evra got into an altercation with his fitness coach – who promptly quit and stormed off the field on camera.  After that, coach Raymond Domenech bizarrely read a letter publicly by the French team attempting to justify their boycott.

This is a classic case of an organization not understanding the need for sound crisis management.  Many of these incidents could have happened behind closed doors.  The public theatrics and lack of a coherent response drove this debacle.  In crisis public relations, the key imperative is transparency with your stakeholders so they understand what’s happening – ensuring you, and no one else, directs and controls the media narrative.  Still, when tensions run high, it behooves an organization’s leaders to behave well in public, lest they add more fuel to the fire of public contempt.

Of course, there’s always a way out – even a total implosion allows for an organization to start over fresh.  For France’s sake, this requires an open, honest team apology to the nation, and a promise to go forward with honor, candor, and controlling their fits.  No doubt this phase of the PR crisis is over, but we’ll go out on a limb and predict there’s more to come…

How Litigation Actually Helps Your Company Improve Its PR Capabilities

June 16th, 2010

Surprise – your widget-making mom-and-pop/mid-sized business/global corporate behemoth has been sued!  Apparently Timmy Goodkid Thompson tried to eat a decidedly non-edible product your business sells, and hurt himself quite amazingly in that effort.  Did we mention it’s your flagship widget, the one that drives 99% of your revenue?

The Thompson family – farmer father, teacher mother, rambunctious and adorable Timmy – have hired a media-friendly law firm, one that has perfected the art of PR stagecraft.  The firm has called a press conference to publicize the lawsuit.  All the 24/7 networks will be there, not to mention local reporters your neighbors know and trust.  Since the scrum will be streamed live, product safety bloggers are all over this one, riding a high-wave of backlash against corporate malfeasance.  Someone (the law firm?) has launched a fake Twitter account in your company’s name, a parody that sarcastically communicates abject, tone-deaf insensitivity with tweets like “next time blend the widget, it’ll digest more easily.”

Your company isn’t sweating, though, because you’re confident your product was not the cause of injury, and that your customers likely will understand this.  More importantly, long ago you hired a smart crisis management PR firm to draw up a crisis response playbook… right?  You did an inventory of interested media, have a holding statement in place, along with a grid that anticipates an escalating public relations meltdown… right?

Ok, enough about the PR nightmare, let’s shift to reality.  Litigation PR makes any company nervous.  No matter how small a lawsuit, the potential for media attention is limitless.  Yet in a way, that’s the beauty of litigation PR – in anticipating lawsuit scenarios, business leaders must identify every stakeholder, and that includes everyone in your company hierarchy.  Imagine the human resources involved in the widget lawsuit:

• Are the front office staff prepared to answer initial phone inquiries, do they have talking points?

• Have the interns been told to stay quiet and report inquiries to supervisors?

• Has the communications office reviewed and updated crisis PR procedures to ensure relevancy? (Note: Big Oil – walruses in the Gulf of Mexicoseriously?)

• Has building security been consulted regarding protestors who may show up at the front door?

• Has a point-of-contact been designated to oversee the entire crisis PR response?

• Has legal counsel examined your supply chain to identify each choke point of liability, and in turn relayed that information to your communications staff so they have statements and talking points ready to address each vulnerability?

• Are the IT staff ready to update the company website immediately with relevant messaging?  Do you have a dark site in waiting for this special occasion?

• Has everyone signed a NDA regarding trade secrets and the relevant aspects of litigation?

Such thorough preparation is essential in litigation PR.  As the company head, you can only achieve this level of care by engaging every tier of staff within your business operations.  That’s why an effective crisis playbook fundamentally requires looking inward, and in doing so your company encourages discipline amongst the ranks and knowledge of the situation.

Nothing looks worse than an erratic or empty media response to a lawsuit, so embrace the possibility of litigation and run the traps to get all employees on the same page.

What to Watch for in Obama’s Speech to the Nation on BP

June 14th, 2010

Tomorrow night President Obama will address the nation regarding the BP oil spill.  Combating criticism that his administration was slow to respond properly, Obama is anticipated to make the case for more aggressive government action toward BP.

Aside from the political consequences pre and post-spill, what are some public relations considerations to keep in mind?

Location, location, location.  This is the first national speech that Obama will deliver from the Oval Office.  The symbolism certainly isn’t lost in the moment, as White House advisors rightly recognize that the nation’s greatest environmental disaster ever ranks up there among the worst crises in American history.  Obama is using the Oval Office imprimatur to convey the strength and seriousness of his response to date, and his plans going forward.

Tell us what’s up.  There are so many moving parts now – BP, possible receivership, fines, Halliburton, Transocean, MMS mismanagement, leak estimates, hurricanes – that it’s easy to get lost past the simple narrative of oil gushing into the Gulf of Mexico.  Obama must explain clearly and concisely what his administration has learned, and in a way that helps Americans make sense of who may be responsible for the oil spill.

Leverage into other issues.  Don’t forget that Obama’s plan, no matter what form it takes, is still essentially politics.  Just as the Bush Administration based a significant political agenda on the aftermath of September 11, expect Obama to lay out future political principles.  Strong bet that the need to lessen national dependence on oil will be top of mind, as will regulation of exploration and other relevant energy and environmental issues.

Deadlines.  To shift the focus away from the number of days into the crisis, Obama will likely give hard deadlines for relevant stakeholders to meet, whether that concerns clean up or regulatory action.  To save his political fortunes, Obama must shift the PR narrative away from mismanagement and toward total control.

And that’s just tomorrow night.  These types of efforts require weeks of follow up to sustain any positive traction, so keep an eye on administration officials as they’re dispatched to keep the message momentum going.

Crisis Corner: If the End is Near for BP, What Does That Mean for Your Company?

June 9th, 2010

When the New York Times runs an article implying the end is near for BP, then you know the end is indeed possibly near.  Interesting that one event like an oil spill can do a global behemoth in, even one like BP with a miserable track record on safety (or lack thereof).

Normally, crisis public relations aim to see a client through to resolution of the problem in front of them.  A smart crisis management plan usually incorporates a grid of escalating threats and their consequences.  For example, a negative op-ed about the client might be considered a low-level threat, and the PR response would be proportionate, such as a rebuttal op-ed.  Or, a product recall may be a high-level threat, with the appropriate response being customer engagement and recall information presented on several online platforms.

But, if like BP your company faces a death knell, how should you plan your public relations response?  The scenario is real, and mega companies do implode – think Enron, Arthur Anderson, WorldCom, Lehman Brothers.  What usually follows is a string of scorched earth litigation and restructuring, much like political sausage making that no one likes to see.

If the end is near for your company, that doesn’t mean you can shirk on stakeholder communication.  Here are some reasons why:

• Everyone loves a comeback, so your crisis PR plan should include steps on making yourself accessible post-fallout.

• Reporters, historians, academia and others will continue to write and report about your company – so make sure that your side of the story gets a word in edge-wise.  Explain the domino effect from your own view, so people don’t put words in your mouth.

• If you are ever able to breathe life into the company again, you will need to generate a positive narrative from where you left off, and this requires keeping communications fluid.  Staying engaged with your stakeholders after the company dissolves will allow a better transition.

• As silly as it sounds, closure is just as important in the business world as it is in our personal lives.  Make sure the last word is yours and yours alone. This is the first and perhaps most important step to moving on in the wake.

As of now, BP is playing defense for its short-term response, and has given some hint as to paying claims in the future.  But if there’s no afterlife for BP, then it should start planning for the real worst case scenario, a total corporate meltdown.

How Not to Handle Pushy Reporters

June 1st, 2010

Yikes… so here is a confrontation, caught on tape, of local ABC news investigative reporter Dan Noyes in California arguing (and nearly getting into a boxing match) with communications director Marc Slavin of Laguna Honda Hospital.  Noyes wanted to question hospital officials on alleged improper use of funds meant to help patients.  Slavin kept touching Noyes in an attempt to shut him down, and from there the confrontation got testy.  Suffice it to say, this is a case study in how not to handle aggressive reporters.

When serving as in-house PR staff, you must anticipate that your company or business may be subject to activist campaigns, protests, investigative reporters and other, ahem, touchy situations.  The attempt, rightly or wrongly, is to make the people on-site uncomfortable and, ahem #2, box them in a corner.  What are some PR tactics to deal with confrontational visitors in a way that doesn’t embarrass your business?

Always remain calm.  In the video, Slavin was holding his ground as a PR staffer quite nicely until he started slapping Noyes’ camera away.  Big mistake.  Not only has he taken the reporter’s bait, but he may have committed assault and/or battery under California law.  Good media training can always coach you through what to do/not to do.

The mike is hot.  If someone tells you that the camera and microphone pointed in your face aren’t recording, don’t believe them.  Even if that camera and mike are pointed down, assume another lens is pointed at you from somewhere else.

Inventory first, respond later.  The agitator’s intent usually is to provoke a response.  But, until you fully understand the crisis and what’s fueling it, it’s best not to respond at length. Calmly explain that you handle the PR and media, ask the nature of the inquiry, get all relevant questions and facts, and tell them someone will respond at an appropriate time. AND live up to that promise – this step is only good if you follow through on it, and failing to get back to the inquirer only fuels their attacks even more, not to mention hurting your credibility.

If all else fails… No matter what, at some point boundaries may get crossed.  If the person is trespassing, ask them to leave.  If they won’t then call the police – but always go back to rule #1 – always remain calm.

PR Holding Statements: Walk Before You Run … Into the Crisis!

May 24th, 2010

If you’re reading this, and happen to own or operate a small business or large corporation, we’re willing to bet you’re curious about media holding statement 101.

No business is immune to the need for smart public relations crisis management.  If you sell food, assume your customers might get sick.  If you sell cars, assume the brakes will fail.  If you house sensitive financial information, assume it will be compromised.  If you sell medicine, assume it may have unanticipated side-effects.

The permutations are endless, but the sure-fire way to escalate your business’s crisis situation is to be caught flat-footed — or, in a PR crisis, with both feet in your mouth.

In other words, no matter how many weeks you’ve spent analyzing the weak points in your supply chain, setting up a war room to monitor media fallout, preparing for reporters through media training, or anticipating how critics and competitors will leverage a crisis against you, all your efforts are wasted without a proper holding statement ready for release.

Each holding statement is unique for a particular business, but the basic principles are the same.  The holding statement must address the crisis head on and without any doublespeak, acknowledge that something wrong is going on, offer immediate information, and resolve to address the media and public again once all the facts have been collected.   And, most importantly, you must show sincerity, genuine concern and appreciation for the crisis situation.

Apply this general approach when your business needs to speak, and you will buy the precious time necessary for a more coordinated, concentrated response to any problem factors that may arise.

How to Control the Rules of the Court of Public Opinion, Step 1

May 1st, 2010

In crisis management and crisis PR, *the* most precious commodity is time.  Events happen so rapidly that you don’t have to time to determine if you have the upper hand.  One day your business is coasting along, but the next day you’re causing a mega-environmental disaster, accused of bribing regulators, facing allegations of financial crimes, or trying to figure out if an opponent is more bark than bite.

Staring down the barrel of a lawsuit?  What’s your litigation PR strategy?  Better be more than hoping for limited liability.  Your business may be at the mercy of civil procedure rules and a trier of fact, but don’t forget that the rules of the court of public opinion are totally different.

To leverage those circumstances in your favor, your business must take steps before you face litigation.  Your public relations counsel should conduct a thorough risk assessment and identify all weak spots of potential negative publicity.  Still, effective risk assessment is more than scanning your business operations – the analysis must connect with messaging, otherwise you’re wasting your money on ineffective consultants.

That’s why your business must be armed with a holding statement that can be aimed at each potential publicity hit or reporter inquiry.  Nothing appears worse (or more guilty) than inaction or “no comment.”   Ask yourself, who are your stakeholders – customers, regulators, business partners, activists, employees, maybe others?  If they suspect being cheated somehow by your business, what will you say when the microphones are in your face?

Specific holding statements can address initial concerns and buy you time to regroup, take a deep breath and implement the extended PR strategy.  Don’t assume that your folksy charm, steel spine or other character trait will woo rabid press into submission.  Speaking on the fly only reinforces the image of being unprofessional, and worse, indifferent to the crisis.

Appreciate the importance of prior planning, finalize your holding statement and be patient – by doing so you’ve already made a strong opening statement in the court of public opinion.

Crisis Corner: Resolving the Company PR Crisis Before It Begins

April 19th, 2010

In most public relations crises, the common denominator remains, maddeningly, the same – a change in tactics and statements, mid-game, that throw more gas on the fire.  Perhaps it’s easy to understand why; we only need to think of our own personal ordeals fraught with anxiety and panic.  In the face of uncertainty, it’s easy to lose grip on rational thought, and even easier to disregard consistent steps that offer a careful exit to safety.

That’s why Praecere’s philosophy on media crisis management and crisis communications places a premium on planning discipline.  After all, crisis aversion is a heck of a lot more fun exercise than crisis management.  From Fortune 100 companies to small businesses, every company – if they haven’t already – must take the following steps:

• Be honest with themselves and others;

• Identify each potential weakness in their product or service;

• Know how these weaknesses may affect relevant stakeholders

• Analyze the most effective way to communicate with these stakeholders;

• Have default and standby messages ready to communicate quickly and buy time;

…. and ….

• Remind themselves to be honest with themselves and others.

Of course, it’s impossible to anticipate every possible permutation of mistakes, miscalculations or flat-out wrongdoing that may occur.  Still, a small investment in crisis management now can avert much more painful outcomes down the road.