Tag Archives: corporate crisis management

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After enduring an online firestorm, Starbucks has stopped encouraging its baristas to write “Race Together” on coffee cups.

Starbucks is planning several steps as part of the “Race Together” initiative that promise to substantially benefit minority groups. But by leading with the slogan, the company has prompted heated criticism.

One issue that is increasingly incensing the online community is when consumers feel they are not represented within the senior-level staff of the brands they are loyal to. And with this campaign, Starbucks unfortunately highlighted that issue. As the New York Times’ Sydney Ember observed, “Many have pointed out that the company’s leadership is predominantly white, while many of its baristas are members of minorities.”

This controversy reinforces the importance of authenticity in public relations initiatives. We don’t doubt that CEO Howard Schultz’s heart is in the right place with this campaign. And we support his efforts to encourage discussion and the economic components of the campaign. But if he is going to associate the Starbucks brand with such a serious social issue, he should have preceded that slogan with action…including perhaps a seriously substantive movement to diversify Starbucks’s leadership.

 
 
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Crisis management

The iconic American news host, Brian Williams, has been under intense scrutiny in recent weeks. We have followed the conversations online and off.  The late David Carr’s New York Times article on February 8, 2015 resonated with us the most.

In Brian Williams, Retreading Memories from a Perch Too Public, Carr provided a thoughtful point of view about what news hosts face in today’s competitive market.

We want our anchors to be everywhere, to be impossibly famous, globe-trotting, hilarious, down-to-earth, and above all, trustworthy. It’s a job description that no one can match.”

Additional viewpoints from crisis and reputation experts – including our own CEO — are featured in this week’s “Crisis of the Week” column, at The Wall Street Journal. 

 
 
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Social activism impacting reputations

Risk Management has published “The New Reputation Risks: What You Need to Know for 2015,” an article explaining trends I expect to see play out in 2015.

Risk Management is the leading journal for risk managers, and I wrote this piece to help that audience anticipate changes in the risk management landscape—specifically, in the area of reputation risk. It includes our predictions for the biggest potential reputation-related crises in 2015, as well as a look at the current shape of the reputation management industry.

 
 
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No company wants to be put in the position of Sony: hacked, with thousands of valuable internal documents published widely online. But the proliferation of hacking and the ease with which even government databases can be accessed makes it clear that there is very little security on the Internet.

This crisis presents one more important lesson. While we have little control over our Internet security, we can control what we say online, including in emails. We can:

–          Be brief.

–          Stick to the facts.

–          Avoid acknowledging, participating in or responding to conversations that would be embarrassing or harmful to us or others if made public.

–          Pick up the phone when you want to keep a conversation private.

The immediacy and convenience of email communication can make it difficult to adopt those guidelines. But they represent a large step for safer online discussions, something we should all strive for.

 
 
Crisis Management, , , , ,

The Korean Air “nut crisis”—which we have written about here and for the Wall Street Journal’s “Crisis of the Week” column—continues to develop, and escalate.

Cho Hyun-ah, the daughter of the airline’s chairman and herself a former executive, has been charged with violating aviation security law and hindering a government investigation. She faces up to 15 years in prison. This follows her much-publicized arrest last week.

Several other employees of Korean Air and public officials also face prosecution.

This rapidly expanding crisis began on December 5, when Ms. Cho humiliated crew members and forced a plane to return to its gate. Public reaction was immediate and heated. The company attempted to respond, but failed to enact measures that matched the severity of public sentiment. As with all executive missteps that escalate into crises, this illustrates the importance of crisis planning. Have a response plan ready. Don’t get caught playing catch-up with incremental measures. Respond early, and conclusively.

 
 
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Korea Air

Earlier this month, Cho Hyun-ah, the daughter of Korean Air’s CEO and an executive at the airline, caused an international social media firestorm. She berated the crew of a Korean Air flight for serving macadamia nuts incorrectly, then forced the pilot to return to the gate while taxiing out of JFK. Her behavior sparked international headlines. Extensive analyses about the reputational fallout on Korean Air and her father’s business empire followed.

The Wall Street Journal’s “Crisis of the Week” column weighed in and invited me to comment.  (I suggested that Cho Hyun-ah step out of the public eye for a period of time. When she makes a new start, she is in an optimum position to use her access to Korea’s wealth, power and influential as a platform for helping the less fortunate.)

Reputation Risk Isn’t New to Business…But Has Taken a More Prominent Role

Reputation risk isn’t new to business. But over the past two decades it has taken a more prominent role in the business world. The Internet, and social media in particular, has introduced a new level of transparency to business operations and culture, and a new level of empowerment to consumers.

If one employee makes a misstatement on social media, and it gains viral momentum in the community at large, it can be a crisis for the company. When that employee is the daughter or son of the company’s owner, it can become a defining one.

 
 
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Crisis management

Every day, it seems, another major American brand experiences a crisis. Despite a large and experienced  industry of experts that fix them, they don’t seem to be going away. Last fall the CEO of Microsoft became one of many corporate leaders to unwittingly create one.

Why are so many CEOs stumbling in the diversity department? The problem often starts internally. Statements and actions by CEOs and other leaders portray them as out of touch with the people their companies target as consumers. Outrage ignites online, goes viral, and then lands on prime-time news. CEOs and boards are surprised over the impact of their actions or statements. They are often puzzled as to why a backlash occurred at all.

If you are a CEO, there are several steps you can take to ensure you don’t become the next target of online backlash. The first is to understand why these crises are happening so often and what they share in common.

My recent Forbes.com piece,  The Most Successful CEOs Embrace Customer Diversity, sheds light on the problem. How else can CEOs incorporate a more well-balanced blend of diversity within their corporate cultures? Conduct a search for #diversity and you will find plenty of suggestions.

 
 
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Sanofi and Successful Crisis Management

Pharmaceutical giant Sanofi has been in the news recently. It is investigating whether its international affiliates may have made improper payments to doctors. But thanks to some excellent crisis management, headlines are focusing on how Sanofi is handling the issue instead of on possible wrongdoings.

I contributed to this piece, published today on The Wall Street Journal’s website, that examines Sanofi’s response in more detail. Other major pharmas, including Novartis and GlaxoSmithKline, have faced similar issues. Sanofi, however, has distinguished itself with a proactive approach to reputation management.

These situations serve not only as examples of how crises unfold in the Internet age. They also illustrate a type of problem that can be difficult to avoid in a global economy: in other countries, payments we would consider bribes are seen as simply a cost of doing business. International industry has not found a way to resolve those cultural dissonances…but Sanofi has demonstrated one way to manage the crises they produce.