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.
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.
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.
The explosive growth of the Internet has dramatically changed the demands of reputation management. The manipulation of search engine results—what used to be considered the central activity of ORM firms—has lost its utility as search engine algorithms have grown more sophisticated.
The National Cybersecurity Institute Journal has published my new paper addressing this topic. “The New Demands of Online Reputation Management” provides an overview of the leading online reputational threats faced by companies in the United States, as well as an explanation how such events unfold, the motivations behind them, and how they can be protected against and resolved.
CEO Mary Barra has not been able to stop GM’s crisis. But her 2.0 crisis communications skills are an asset to GM. They can be judged by the transparency and skill with which she handled the recall catastrophe on the Internet.
Barra’s communications strategy incorporates multiple digital media platforms. She has used these channels to respond to the crisis with a strong and genuine message. In addition to harnessing social media like Facebook and Twitter to connect directly with customers, she has also addressed the recalls in a series of videos, a USA TODAY editorial, and even her commencement speech at the University of Michigan earlier this month. CEOs can learn much from studying her playbook.
We previously highlighted how Toyota utilized innovative social media strategies to repair its reputation following recalls in 2009 and 2010, but more problems, including recalls in both October and November of this past year, have threatened to undo that progress. Toyota attributed these recent recalls to “its increased diligence toward quality and safety” and “fought vigorously in recent years to defend itself against claims that its vehicles were prone to speeding out of control with no warning,” according to Forbes.
The Value of Trust
Despite the historic size of the recent settlement—and the fact that the acceleration issues have not been scientifically confirmed—Toyota appears to have decided that the benefits to its reputation outweigh the cost. As the Wall Street Journal points out, the settlement “includes no admission of fault or unlawful conduct by Toyota and allows the company to avoid the risks associated with battling a lengthy trial.”
By offering support and compensation for both current and former owners of affected vehicles, Toyota is seeking to win back the trust of some of its most important customers. “This settlement is a nod to loyal Toyota owners whose car resale values were hurt by the unintended acceleration issue and the intense publicity that followed,” auto industry analyst Michelle Krebs told Forbes. Additionally, allocating $30 million “to finance automotive safety research related to driver behavior and unintended acceleration” allows Toyota to underscore its broader dedication to safety. “We concluded that turning the page on this legacy legal issue through the positive steps we are taking is in the best interests of the company, our employees, our dealers and, most of all, our customers,” said Toyota’s Christopher P. Reynolds. “This agreement marks a significant step forward for our company, one that will enable us to put more of our energy, time and resources into Toyota’s central focus: making the best vehicles we can for our customers and doing everything we can to meet their needs.”
An Expensive Solution
With its stock on the rise and the automaker set to once again become “the world’s biggest car maker,” Toyota appears to be faring quite well. But as Pepperdine University School of Law professor Richard Cupp warns in a Reuters article, “lawsuits like these could become increasingly common, even where there is not provable physical injury on large scale.” On Business Insider USC Marshall School of Business marketing professor Ira Kalb offers some valuable advice, pointing out how better crisis management and communication could have lessened Toyota’s woes. “To keep the top spot,” Kalb says, “making a better car is not enough.”
Sallie Krawcheck is a top candidate to become the next head of the SEC, according to Dealbook, but it’s not just her record and resilience as a Wall Street executive that’s put her in the running.
Since she began tweeting last spring, Krawcheck has gained more than 11,000 followers. On LinkedIn she’s attracted an even larger audience—75,000 and counting. “She has drawn a significant following with her conversational style and posts on investment issues,” Dealbook says, referring to an earlier article in which Krawcheck called her move “part of a larger effort to style herself as an industry analyst” and “lend her Wall Street experience to the broader debate about the industry’s evolution.” Already among LinkedIn’s top “Thought Leaders” and Business Insider’s “101 Finance People You Have To Follow On Twitter,” she’s clearly had a great deal of success with her strategy.
Social Media Savvy
A big part of that success comes from Krawcheck’s deft use of social media to take ownership of her image and message. In the past, she would have had to rely on a public relations intermediary to arrange interviews and keep her name out there, as many prominent figures do. However, she has used social media to take more direct control of her voice and reach a larger audience at the same time. In a recent RIABiz.com article Dina Hampton examines how Krawcheck “used those months of technical unemployment to cultivate a distinct and intimate online voice that may, industry watchers say, deftly position her for her next move.” Speaking to Hampton, Gregory FCA Communications’ Joe Anthony adds that Krawcheck’s strategy has “broadened her footprint to where more people are recognizing her beyond the financial services space” and “gone from being seen as a sharp mind within wealth management/banking to a thought leader and business titan.”
While she may describe herself in her Twitter profile as a “current mom” and “crazed UNC basketball fan,” a closer look at Krawcheck’s online presence shows that her approach is far from amateur. In addition to regularly sharing useful links and poignant thoughts on both Twitter and LinkedIn, she has self-published popular posts like “Lessons Learned in Leading During a Crisis” and “What I Learned When I Got Fired (the First Time)” and penned op-eds for outlets including the Wall Street Journal, Washington Post and Politico.
Those posts have given her a chance to share her own perspective and narrative regarding her previous experience, while the op-eds appear to be setting the stage for her next move. “Lately Krawcheck has been peppering the media with her thoughts and strong recommendations about how to address, if not solve, the gigantic, chronic, almost genetic, ills of the global financial industry,” The Daily Beast’s Allan Dodds Frank wrote in October. “If she can continue her nonpartisan stance,” Frank observed, “she might be the ideal person to be in charge of consumer protection, be nominated to the Securities & Exchange Commission or to a Treasury Department job.”
Setting the Stage
Her undergraduate degree at the UNC School of Journalism has likely helped Krawcheck communicate effectively, but perhaps more important is how she has applied the same strategies that made her one of Wall Street’s top female executives to her social media endeavors. “The secrets of Krawcheck’s success, however, hinge on her social skills,” Heidi N. Moore wrote in 2009, adding that “she has built a reputation as Mrs. Clean” and combined “a warm interest in others’ feelings, an obsession with preparation” and with “frank talk and open ambition.”
Speculation about where she’ll end up next will surely continue, and there’s no guarantee that she’ll be tapped as the next SEC chair. But one thing is certain: as one of the first major names in the banking world to dive headfirst into social media, Sallie Krawcheck has reaped the vast potential of an open and savvy online strategy.
Arnold Schwarzenegger has undertaken a campaign to restore his public image. The central issue the campaign is addressing—and needs to address of course—is last year’s infidelity. Schwarzenegger seems to be taking the best approach to that problem: owning it.
The release of his new memoir, Total Recall: My Unbelievably True Life Story, suggests the sort of confession and personal reflection that is needed. But in a host of negative reviews the media has judged that attempt unsatisfactory. It “fails to achieve either the depth or the emotional impact that would make us care more deeply about this fascinating public figure,” according to the Washington Post’s Vernon Loeb.
Schwarzenegger’s reputation rehabilitation plan has fared better with the recent launch of his own eponymous political think tank at USC, a move that has helped rebrand him as “a global policy wonk and statesman dedicated to leading America into what he calls a new post-partisan era,” according to the Associated Press’ John Rogers. The American Psychological Association’s Dr. Bernard Luskin explains the relative success of this branch of his strategy to The Christian Science Monitor’s Gloria Goodale: “Arnold will persist with the same aggressive ruthlessness that he has demonstrated with the other obsessive passions in his life,” the American Psychological Association’s Dr. Bernard Luskin tells Ms. Goodale.
Arnold’s Future
There is no broad consensus on how effective Schwarzenegger’s efforts will finally be, but experts tell the Monitor that his comeback could succeed, but it probably won’t restore him to his previous stature. “The public may be willing to forget to some degree but will not forgive—so much as accept—as he attempts to remake himself,” says the APA’s Luskin. Echoing that sentiment, University of Texas, Arlington’s Ben Agger imagines that the former California governor “well be publicly redeemed if he seeks, not elective office, but talk-show host.”
Luskin and other analysts have likened him to Bill Clinton, but Schwarzenegger will need to recognize his own unique strengths and weaknesses to fulfill his goal. A Business Insider article by USC marketing professor Ira Kalb provides a great breakdown of the characteristics and history of his public image. He deftly protected his reputation against previous allegations, Kalb acknowledges, but last year’s scandal dealt it a major blow. “Time will tell if he is successful repairing his image,” Kalb says. “His admissions and apologies are two steps in the right direction, but this is the third time he has employed this approach in public, and it may take more time and a more aggressive charm offensive to pull it off on this go-round.” Schwarzenegger certainly doesn’t lack aggressiveness, but he’ll need the perfect balance of charm to win back the public’s trust and respect.
