Under Construction

Posted by Tom Gable

Why invest in reputation and image as a part of corporate strategy? As covered here previously, recent studies show companies that invest in reputation – and walk the talk over time – do better than their competitors in a number of ways: 

• Growth versus peers
• Profit margin
• Employee morale
• Community goodwill
• Investor support (upside and downside)
• Relationships with vendors, suppliers
• Self-pride

What are the basic steps to building reputation over time? This will be the first in a series of posts based on presentations given the past year to a variety of professional and business organizations on the benefits of investing in image as a part of corporate strategy. Let’s start with building the machine. Some basic questions to ask:

• How do you want to be known in two to three years?
• Is your strategic plan, financing, mindset, commitment and other resources up to the task?
• Can you clearly differentiate against the competition?
• Does everyone sound alike?
• Can you be provocative (even controversial)?
• Does the organization have a culture, a personality?
• What do you stand for – the core values?
• Can you establish a solid foundation from your values and then demonstrate proof of principle over time?

Can you be disciplined enough to carry out a strategic program of reputation management for reaching multiple constituencies?

• Internal Audiences
• The Value Chain
• Consumers
• Investors
• Potential Partners
• Decision Makers
• Regulators
• Suppliers
• Distributors
• Analysts
• Customers
• Community

Focus on three to four essential elements as the pillars of your image and reputation. How do these important values and benefit your many constituents? Can you build relationships that go beyond the typical top-down, one-way organizational model of communications? Envision how the organization will walk its talk for each core value over time and demonstrate proof of principle for each target audience.

Once the values are agreed to, plan for pushback, cynicism and ambushes along the way from the media, disgruntled customers, bedraggled investors and competitor attacks. Be prepared to stand tall and respond in character – true to your ethics and vision for how you want to be known in the future.

The analogy is to build image like a great skyscraper: brilliant design, spectacular engineering to set the foundation and then aggressive, engaged project management to keep adding substance to your structure with precision. But pure science and engineering don’t build reputations for the long term. As proven in our Guru Program®, it takes a combination of creativity, engineering, science and a bit of daring to rise about the crowds.

Next: the three dimensional chess game.

Head of the Class

Posted by Tom Gable

The Reputation Institute just released its annual Reputation Pulse, which measures the corporate reputations of the largest U.S. companies based on consumers’ trust, esteem, admiration, and good feeling about a company while also gauging perceptions across seven rational dimensions of reputation.

The survey named Johnson & Johnson as the most reputable U.S. company first for the second consecutive year, followed by Kraft Foods, Kellogg, The Walt Disney Company, PepsiCo, Sara Lee, Google, Microsoft, UPS and Dean Foods. AIG finished 150th out of the 150 companies included in the survey.

I’ve blogged and written regularly about the importance of investing in image as a part of corporate and organizational strategy. Beyond just making a list, companies enjoy significant benefits from having a positive reputation, according to the Reputation Institute; a company’s reputation score has a positive and direct link to consumer attitudes and behaviors. It reported that having a strong reputation in 2010 yields “more recommendation, more benefit of the doubt and more purchase behavior than ever before.”

In comparing the Top 10 to the Bottom 10 measured companies, the institute noted that the general public is:

300% more likely to verbally support or give the benefit of the doubt;

200% more likely to consider products; and

350% more likely to purchase products of highly regarded companies.

“In today’s tough economic climate, corporate reputation is critical to sustaining and growing business,” said Anthony Johndrow, Partner & Managing Director, Reputation Institute North America. “This year’s results illustrate a direct correlation between how well a company manages its reputation and how likely consumers are to recommend or reject the company. A good reputation is not just a nice-to-have; it’s a bottom-line business imperative.”

It Pays to Communicate

Respondents who indicate they have bought a company’s products or utilized a customer support service tend to rate those companies higher, indicating that direct experience has the greatest impact on corporate reputation. Third party messages, from the media, online or other people, tend to have a negative effect. Reputation Institute’s findings show that respondents who were reached by companies’ corporate actions and/or communications initiatives scored them 3 points above the U.S. mean.

In fact, a consumer who has encountered a company’s marketing, branding, public relations or social responsibility efforts on average rates the company higher regardless of their reputation ranking—even companies with weak reputations can gain from telling their side of the story.

Johndrow sums up the key insight from this reputation driver analysis: “We all know that people care and talk more than ever about the companies behind the products and services they use and they are talking about them. Join this conversation and tell your corporate story to create the support needed in tough times. Corporations can create deeper connections than products can alone, essentially deploying who they are as a company to drive business results.”

The Importance of Reputation and Authentic PR

The survey and news release make good points. But the concept of putting value on a reputation requires more historical perspective. The Reputation Institute was founded by Charles Fombrun, Ph.D., who serves as its chairman. He was one of the first to measure the impact of reputation on company fortunes. He published the results in 1996 in his classic book, Reputation – Realizing Value from the Corporate Image. He followed later with Fame and Fortune. Excerpts from his first book are worth noting because the findings hold true some 15 years later. Here are a few highlights:

A reputation develops from a company’s uniqueness and from identity-shaping practices – maintained over time – that lead constituents to perceive the company as credible, reliable, trustworthy, and responsible. In turn, a company’s established reputation helps to protect it from rivals trying hard to imitate its practices. Reputation builds strategic value for a company by granting it a competitive advantage that rivals have trouble overcoming. To achieve that advantage, however, a company must develop appropriate practices, or character traits, as it were, that rivals find difficult to imitate.

What Capitalizing on Reputation Gets the Firm

If being perceived by constituents as credible, reliable, trustworthy, and responsible is the hallmark of good reputation, it pays off because well-regarded companies generally:

• Command premium prices for their products
• Pay lower prices for purchases
• Entice top recruits to apply for positions
• Experience greater loyalty from consumers and employees
• Have more stable revenues
• Face fewer risks of crisis
• Are given greater latitude to act by their constituents

Corporate reputations are perceptions held by people inside and outside a company. To acquire a reputation that is positive, enduring, and resilient requires managers to invest heavily in building and maintaining good relationships with their company’s constituents. It calls for practices that measure and monitor how the company is doing with its four top constituencies: employees, investors, customers and communities. Doing so pays off in the long run because favorable reputations produce tangible benefits: premium prices for products, lower costs of capital and labor, improved loyalty from employees, greater latitude in decision making, and a cushion of goodwill when crises hit. (57)

A good reputation generates consistent, shared, and favorable impressions among observers about what a company is, what a company does, what a company stands for. In this way, a company’s reputation is itself identity defining. It helps us assess our understanding of the companies with which we do business.

Marketers, advertisers and public relations specialists help to create attractive images of a company. Indeed, many companies rely quite heavily on PR professionals to shape the perceptions of those looking in from the outside – principally the customers. But unless those images are anchored in core characteristics of the company and its products or services, they will decay. In general, what companies want and need are reputations that are both enduring and resilient: able to withstand scandal and attack, to overcome crisis and assault.

Can your organization invest in reputation as part of long-term strategy? What does it stand for? Then, can it commit to providing ongoing proof of principle and walk the talk over time? That’s the essence of authentic, fact-based PR.

Rolling out new tools

Posted by Laura Woods

The public relations profession is at a wonderful and challenging crossroads in its evolution. No longer can the traditional approach of solely using press releases be effective in building a client’s reputation and media presence. Now PR professionals have to be comfortable integrating all aspects of social media — blogs, Facebook, YouTube, Twitter and other tools – into their strategic arsenal. Beyond proactive approaches, PR pros need to be diligent in setting high standards for all communications and monitoring for questionable or negative impacts.

Social Media: The Perfect PR Tool

With the soaring popularity of social media, consumers are now in charge. Praise or complaints for a company, product or individual can go worldwide in an instant, damaging sales and brand image if they are not positive. Negative consumer feedback can take on a life of its own if a company doesn’t respond appropriately, as with Nestle in the recent bashing over use of palm oil. PR professionals can track the feedback and develop appropriate responses.

This rings especially true with Facebook since studies now show that the social networking/photo sharing site has become the most visited Web site today, surpassing Internet giant Google.

Many Companies Still Making Facebook Fumbles

Still, many companies are getting it wrong when it comes to Facebook by jumping into social media without a clear direction or management strategy. The U.S. military recently made a Facebook fumble by failing to standardize the use of Facebook. The Pentagon hired PR firm, JANSON Communications in Washington D.C., to conduct a study on the quality of military Facebook pages. The results pinned the military’s messaging to be messy, inconsistent and lacking a clear strategy.

The JANSON study revealed:

- 22% of pages lacked of clear terms of use governing behavior of fans

- 84% of pages had no interaction with fans at all during the study period

- Most of the Facebook pages viewed were not marked as the organization’s “official” page, leading to potential confusion with fan-created pages and “clone” pages

By misusing Facebook, the military lost a valuable opportunity to share its message and promote positive interactions with U.S. military members, many of whom are in their early 20s and avid users of social media.

How could this have been avoided?

The following tips are common knowledge among PR professionals but are worth repeating to help focus on the fundamentals:

1) Develop a clear understanding of the different elements of social media. You should be familiar with the top sites, including Facebook, Twitter, YouTube and LinkedIn and how each can be used strategically for your business or organization. Facebook works for both consumer-based and B2B companies because it helps achieve the goal of getting your name out there. You can start by engaging your own friends and coworkers and then expand from there.

2) Create a plan that will help your business achieve its goals. What are people saying about your brand already? Who is your target audience? How will you attract them to your site? What value will you provide? What do you want to achieve with social media? By answering all of these questions, you will already have a strong foundation for your social media efforts. Monitor, analyze and adjust to stay fresh and relevant.

3) Social media is all about consistent, honest communications. Posting and commenting is the only way you and your organization can truly engage in social media. Without it your page will become stale (what the JANSON study refers to as a “Zombie” page). But let’s face it, most people in business find themselves too busy to devote time to it every day. One approach: share the wealth. Develop a plan, schedule and deadlines for several people to participate.

4) Track social media for crisis situations; instant responses. In today’s world of breaking news every minute, consumers won’t write a complaint letter to the president of a company when they can post instantly and share with thousands via Facebook or Twitter. They now have an open forum and audience who may empathize. The key is to react, address the problem, and continue to interact with your followers, fans and critics, too.

Einstein Bros. Gets it Right!

With a little time and preplanning social media PR is a breeze and will make your clients very happy. The bagel shop, Einstein Bros. had a successful Facebook debut by utilizing some of the tips above.

Einstein Bros. launched their Facebook Fan page by offering a coupon for a “free bagel-with-a-schmear.” The result was a drastic jump in fans up to over 400,000. Einstein Bros. played it smart and had already created a plan to keep those 400,000 fans engaged. In order to make sure content was posted consistently, they created a monthly calendar with holidays, high-profile events and store promotions to be posted on the Fan page.

This type of plan is simply a guideline because you should always be listening and responding to what your customers want to talk about. The flexibility of the plan is what will make it easy to follow. Einstein Bros. had an enormous amount of initial success with their Facebook page because they simply dedicated time to preplanning—and so can you.

Make it quick!

Posted by Tom Gable

Elevator pitches are finely crafted and rehearsed monologues that in 30 to 60 seconds create a positive picture of you, your organization and vision for the future, with a goal of capturing the interest of your audience and leading to positive next steps. The concept had its roots among entrepreneurs in the Silicon Valley who struggled to set meetings with venture capital and angel investors who were besieged with proposals. Since time was at a premium and real meetings hard to secure, how to connect during brief encounters in public spaces?

Rumor had it that some oft-rejected entrepreneurs spent most of their days riding elevators in the office buildings where the VCs nested along Sand Hill Road. They also hung out at favorite local breakfast and watering holes in hopes of making the quick pitch. Even the most hard-hearted and rude VCs might pay attention for 60 seconds.

The goal is to engage, entice and quickly get to the next level, whatever that may be (meet, interview, call, present, date). The challenges: keep it short, focused, passionate, incisive and compelling. The biggest mistakes include taking a great concept and making in boring, not doing homework on the audience and using jargon it doesn’t understand, dropping below 30,000 feet to delve into the details of your offer rather than the big vision of future value and not asking for the order. So in crafting your pitch, assume short buildings.

Elevator pitches also can be a handy tool for making a short introduction to a speech or program, preparing for a job interview, making a public relations pitch for media coverage or other situations where you need to communicate big ideas quickly (e.g. speed dating, fast-pitch contests at venture and angel group meetings, cocktail party chatter, etc.).

The following outline can serve as a starting point and creative trigger for crafting your own elevator pitch. It evolved from working with different startups, venture capitalists, analysts and the media over the year to hone down to these essential elements:

TAG LINE/SOUND BITE – The opener – an instant picture or quick summation of your positioning. What you do, what you stand for, to what effect and why it’s important. One sentence is best. Practice with people who don’t know what you do and keep honing this one sentence (two at the most) until it rings like Shakespeare.

PROBLEM, SITUATION ANALYSIS – What exists – the pain or problem you solve?

DYNAMICS AND OPPORTUNITY – Quick historical overview of how it got to this point, how the challenge has been addressed, what is the sweet spot for your company or organization (keep it to three important points, no more!).

WHAT (solving the problem) – Your company (or organization) has been working X years to plan for and develop D, E and F to solve the problem, take advantage of the market opportunity and grow and succeed over the next Y years.

OVERVIEW FROM 30,000 FEET – The macro view, the big picture of how your great concept (science, disruptive technology, new category, etc.) comes together and will grow market share, sales, traffic, profits, benefits to the community, whatever – the BIG PICTURE vision of future success rather than technical details and features.

SO WHAT (Benefits) – You will succeed because of the creative planning, results and ultimate value you deliver. Create a mental picture of the benefits to science, patients, customers, the world. If there is a good case history, even early stage clinical trials or beta testing results, cite the proof of principle in a sentence or two.

THE TEAM – The team includes executives with national credentials in A, B and C. It has a combined ZZ years in the industry, has built MM, helped YY other companies or institutions grow and knows the market and how to provide an expanding array of products and services to help it succeed (make it relevant to the big picture). Investors in particular need to have faith in the team.

THE CLOSE (call to action on the elevator) – “We have the people, the plan and the commitment to succeed. I can provide incredible detail that I believe will convince you to invest, interview, buy, etc. How about a follow up meeting? This week or next (try to nail something specific)? Where would you like to meet? What else can I provide?” Ask direct questions that take it to the next step.

And even if the answers are “no” or “no way,” you’ve taken a step in the right direction – eliminating one option and perhaps getting valuable input for the next iteration of your elevator pitch and so you are better prepared for the next encounter on your road to glory.

Bye Bye Reputation

Posted by Tom Gable

The previous post covered the first five of ten land mines to avoid in a crisis: guilt, no plan, lack of culture and core values, big hat (no cattle) and CEO ego. The following delve more into hazards to negotiate during implementation.

6. Attorneyitis – This land mine occurs when otherwise good messages and communications that the CEO and crisis team have approved get handed off for legal review and come back bruised, bloated and infected with the deadly disclaimer virus. Short, compelling copy turns fuzzy around the edges. Statements of fact become weighted down with convoluted clauses and abundancies of redundancies (In one set of Frequently Asked Questions that Gable PR crafted to explain a law suit our client filed against a magazine for libel and slander, a sharp 19-word sentence nailing the editor for deceit was turned into 100 words of circumlocution without a verb). The test: read a sentence out loud and if everyone’s eyes glaze over like you were reading from C-Span transcripts or they laugh so hard they herniated, start over.

7. Torpor at the Top (also called Coagulation in the C-Suite) – The media are almost always on deadline and pressed to complete their rounds of interviews with sources from all sides. Many have preconceptions that will drive the coverage, often in a way not appreciated by the target organization. With a well-rehearsed crisis plan and message strategies in place, an organization can dedicate itself to responding as quickly as possible to the media call instead of setting it aside and agonizing what to do while waiting for the lawyers to return your call. The process includes knowing the time zone where the media call originated so you don’t stuck in a time warp between west coast and east coast and lose the opportunity to respond. Providing solid facts and evocative quotes ensures more balanced coverage. If the organization is in the right, its fast response and candor can lead to establishing positive media relationships that can be of major benefit for decades.

When crises hit, companies without plans or facing some of the other land mines outlined here can struggle internally in determining a course of action. Some advisors tell the CEO to delay, which can be brilliant or fatal, depending upon the crisis. Copy often gets written by committee. In situations such as these, communications professionals or outside consultants brought in at the eleventh hour need to light fires under the corporate derrieres of those in the executive suite and loosen the clotted communications channels. Getting back to the media with even a short statement (“We are checking all the facts and will get back to you as soon as we have an answer.”) can help mitigate pending disaster. By not responding or responding after deadline, you get immortalized with the regrettable line that usually appears as the last sentence in the story: “The company was unavailable for comment.” A speedy response, on the other hand, generates a positive impression; the guilty don’t return media calls or have the lawyers call.

8. Dueling Fiefdoms – We’ve seen warring factions fire off random shots of bad advice within the corporate halls in hopes of furthering their own interests in internal turf wars rather than contributing energetically and without guile to the master crisis plan for the overall good of the organization. Lack of corporate alignment and certainty of purpose have broader ramifications in preventing an organization from achieving its business and marketing goals. In a crisis, the problem is exacerbated and accelerated. Good organizations exhibit grace under pressure through positive, consistent communications. For the unaligned and contentious, disaster looms. The media find the inconsistencies among dueling factions and probe deeper, confronting one faction with the claims of another and repeating the process until the inside story unfolds with conflicting voices from every corner.

9. Stuck in Jargon or Legal Land – This isn’t necessarily fatal, just annoying and a potential roadblock to getting your compelling messages through the clutter and promoting good media relations. Speaking in a sincere, human voice will help build bridges with the media and the ultimate target audiences on the other side of this filter. As noted in Attorneyitis, 100-word sentences without a verb don’t cut it. Jargon in a particular niche and working with trade journals can be acceptable. In a crisis, when broader financial, business, consumer and investigative reporters are involved, one needs to apply what some media call the “Bozo Filter.” This methodology came to light during a Media Relations Summit in New York featuring journalists from a wide range of leading publications, news services, on-line sources and broadcast. One noted technology journalist with one of the world’s most respected publications said he had set up Bozo Filters on his email to automatically delete messages from certain agencies or individuals and those containing words he felt were useless or meaningless. For creating compelling messages, start with the evidence developed for your crisis communications plan. Analyze the background information, input from outside resources and historical coverage of the industry, company, organization or related topic. Think big picture. Envision perfect coverage. A trick Gable PR uses to help clients focus on the goal is to have them imagine the perfect headline for this situation. What would it say and where would it appear? Then, can we work backward from perfection and align all our plans, themes, core values, evidence strategies and tactics to bring it to life.

10. No comment – This often springs from some of the considerations listed above (guilty, attorneyitis, torpor at the top). Avoid this nuclear land mine whenever possible. Even providing a comment that you will get back to the media as soon as you’ve had a chance to conduct an internal review, analyze the complaint or get input from those outside the organization is better than saying “no comment,” which comes across as “guilty as charged.” Armageddon may seem eminent, but there will be a future. Salvaging a small part of the reputation during difficult times can provide a starting point for building a new one for the future. Work with your crisis team to analyze your different message strategies and what you hope to achieve for the long term.

A Final Word

Some experts estimate that less than five percent of all crises are fatal to an organization or individual. CEOs reinvent themselves regularly, particularly in industries with high failure rates (technology, biotechnology, Internet). Companies and organizations go through constant change, deal with major public issues and keep moving forward. The path becomes much easier with a continuous investment in image as a part of corporate strategy, developing strong core values, having crisis PR plans in place (and rehearsed) and avoiding potential land mines when your next crisis erupts.

Tred Lightly!

Posted by Tom Gable

Crises come in all forms and sizes, from global product recalls to local political scandal, the nuisance law suit about spilled hot coffee at a fast food restaurant, corporate malfeasance, alleged embezzlement in a not-for-profit, sexual harassment issues, hazardous waste spills, to manufacturing, transportation or other accidents that take human lives.

Skilled public relations professionals have been dealing with these issues and more for decades. They have honed best practices and tempered them under fire, increasing the odds of success in any crisis program. Good advice and case histories abound. But advances in how the world communicates instantly and in living color (photos Tweeted from cell phones, drive-by videos of transgressions, amateur news casts, rumors in the blogosphere, a consumer issue going viral via Twitter, etc.) have added new complexities to the art and science of crisis communications. The race is increasingly to the swift and, as detailed later, the trustworthy.

But extreme dangers are hidden along any path to success in managing a crisis. In analyzing failed or derailed crisis programs in over 30 years in public relations and journalism, certain approaches and characteristics stand out.  The list could go on forever. For focus, we’ve narrowed the key reasons for failure down to the top ten (or bottom ten as the case may be) most threatening land mines to any crisis program. Individually, not every land mine can be fatal. But one blast can lead to another, making the goal of getting through the crisis unscathed unlikely or impossible. Almost all can be dealt with honestly and strategically. Knowing they exist is a start. Start tip-toeing here with the first five of ten landmines to avoid in your next crisis, with six through ten to be posted next week:

1. Guilty (or not completely innocent) – The evidence exists – against the company, CEO, employee, organization, product, or service – for an illegal action, horrible occurrence, affront to humanity, threat to public safety or other transgression. The crisis management team needs to implement its plan, starting with a quick review of your crisis check (click here for a Gable PR example). The team analyzes the crisis in context and with a host of factors before determining the response, including developing a clear understanding of the legal ramifications and liabilities. Being totally guilty requires a different response than being guilty on some counts or a single count, not totally without blame or possibly the victim of circumstance. There is also intent. A major fast food company didn’t intend for its customers to be felled by e coli. The crisis was an aberration. The company had solid food preparation processes, procedures and rules in place, so was able to turn the tide fairly quickly after an initial 30-percent decline in its stock. Another food preparation company that had poor processes in its plant and a history of  being cited regularly by health inspectors for unsanitary conditions hired the most expensive crisis counselors in the country. It tried to spin its way out of the harsh light of media scrutiny with pledges of future adherence to the law, firing people and even giving portions of future sales to minority training programs.  It lacked the culture, history, core values and other attributes (see below) to escape. Customers fled, contracts were cancelled and it soon filed for bankruptcy.

2. No Plan – When issues arise, the best organizations pull out a well-rehearsed crisis plan and implement quickly, confidently and successfully. Should any uncertainties or ambiguities exist, the crisis team and its consultants deal with them effectively as additions to the plan, rather than as another set of distractions for the unplanned and clueless. In the halls of the unprepared, staff is usually found ricocheting off walls in search of enlightenment in between panicked calls to the lawyers or searching local directories for crisis communications counselors. Plans include proven processes, clear marching orders, strict lines of communication and access to an array of supporting evidence. The above mentioned food company with the good reputation, culture and core values had built but not launched Web sites to deal with worst case scenarios in its industry, including e coli outbreaks. The sites included an overview of each area of potential concern, their history of managing in each area and abundant evidence to support each claim, plus links to outside resources, such as government agencies, academicians and independent consumer groups. Crises happen. If an organization is ready with its own plug-and-play plan, everyone will sleep a lot easier before the crisis, during and through the post mortem when the team gives high-fives around the room and pops a cork of bubbly to toast its success.

3. Lack of Culture, No Core Values – Authentic culture and values contribute to reputation for the long term. If you haven’t thought about your reputation, exhibiting positive core values and demonstrating proof of principle over time (walking the talk) as a part of organizational strategy long before the crisis hits, you will start below ground zero when the bomb lands, no matter how good your plan. Positive reputations aren’t spun out of air or the CEO’s frontal lobe on short notice. They are built over time. The leaders in any niche or category determine what they stand for and then provide ongoing evidence over time to support the position. Good companies operate in the no-spin zone, relying on corporate culture, solid facts, quality people, honesty and integrity to carry the day (week, month, year, decade).

4. Big Hat, No Cattle – Do you have a corporate history of hype or muddled communications strategies?  In a crisis, the media will launch quick database research to see how you’ve been covered in the past, by whom and in what context. The sharpest writers will then check with your peers, trade associations, professional organizations, former law and accounting firms. Marginal companies who haven’t dealt with Land Mine No. 2 – core values – often leave a trail of disgruntled professional service firms who served them previously and can now be used as a source in the gruesome discovery process. Lack of credible data and substance become apparent quickly. The first blood is let. With no redeeming values, countervailing evidence from the empty suits at the management level or even a marginal reputation to cast doubt on the charges, the media feeding frenzy begins. Each day brings a new report of chicanery and spin, driving the organization toward Armageddon in the C Suite. At this stage, the organization needs to evoke the Metamorphosis Gambit (sometimes called the Nuclear Option), which involves management change, reorganization, new strategic planning and total repositioning.

Gable PR witnessed this phenomenon when representing a small company with brilliant technology that had been acquired by a billion-dollar company for its stock, which had gone up rapidly based on the company’s regular announcement of exciting new business initiatives into the hottest new markets. However, the company was playing it fast and loose with its business strategies and corporate culture, or lack of same. The media found evidence of bribery by the parent in securing a telecommunications contract with a third world country and almost every one of the much-hyped major acquisitions in pursuit of more revenues and a higher price earnings ratio had turned sour or tanked. Negative coverage ravaged the stock price. Its potential acquisition by a Fortune 500 company was canceled. The company eventually paid huge fines on some of its transgressions, wiped out its executive suite where the transgressions had originated, took huge write-offs on its discontinued operations and announced a new vision for the future. Following its metamorphosis, the company was acquired by another conglomerate, although at a lower valuation than had been anticipated years earlier.

5. CEO Ego – CEOs can have egos as big as the Ritz and think he or she is a natural media star. They refuse to train, rehearse or follow a script or plan. They ignore the gravity of the situation and think they can charm and spin their way out of the morass. Some when CEOs bully their internal staffs into being afraid to provide authentic, sincere counsel. The prototype: MBAs out of central casting, with neatly coiffed presidential hair touched with streaks of grey, a solid jaw, sharp blue eyes, resonant voice and engaging smile, but dumb as a trout when it came to media relations. They are confident they can charm anyone. “I could talk a dog off a meat wagon,” one CEO bragged. Unfortunately, he was already in trouble, having failed two of the earlier tests listed above about culture and providing evidence. The media had done its due diligence and quickly probed into the details of declining sales, escalating administrative costs and high turnover. Without training and having his core messages set, he was caught unawares and folded like a thin tent in a hurricane. He actually started sweating and fidgeting, like the character in a Saturday Night Live skit who was being interviewed by a faux Mike Wallace for selling defective whoopee cushions. Our CEO tried to use his booming voice to make points, then stonewalled and finally tried to change the subject. The reporter kept asking the same question in different ways until she had what she wanted, then hopped off the meat wagon with a little Filet Mignon and hot sauce for her readers.

Next (six through ten): Attorneyitis, Torpor at the Top, Dueling Fiefdoms, Stuck in Jargon Land, No Comment

Reputation Skewered

Posted by Tom Gable

Most major organizations create crisis plans in advance of need, update them regularly, have a strategic array of tools and tactics ready to go (hidden Web sites, video, audio, fact sheets, media kits) and even rehearse their responses. The better job an organization does before a crisis strikes – or at the beginning to quickly manage a crisis based on sound principles should a plan not be in place – the better the result. These fundamentals came to mind in tracking the Toyota recall, the changing communications strategies and lack of responsiveness early in the game.

In creating a crisis plan and carrying it out in any crisis communications situation, three basic principles should guide your actions:

One – Be honest and stick to the facts. Do not speculate, hypothecate or exaggerate. Those impacted by the crisis deserve nothing less – and your reputation may be damaged irreparably if you aren’t truthful and authentic.

Two – Think strategically about the long-term. It is too easy to be reactionary, get caught up in the grinding short-term pressures of the situation and scurry to respond to those demanding answers from every quarter. What do you stand for? What are your core values? Your culture? Are your responses to the crisis consistent with these values and authentic – no hype? How will your actions today be viewed a year from now? Five years from now?

Three – Maintain unified and consistent communications during implementation of your plan. Nothing will erode your credibility faster than conflicting messages coming from different sources within your organization (be aware that the media – and class action attorneys in some cases – will pursue every angle in search of controversy, unethical behavior or criminal intent).

Another key factor for launching a crisis plan: speed of response. As witnessed with the issues swirling around Toyota as it sank deeper into a crisis PR vortex, lack of pro-active communications resulted in the news media, elected officials and other outside sources taking control of the message momentum. Instead of being fast and responsive, Toyota seemed to adopt the Three S Strategy: be silent, slow and stonewall.

Crisis PR is a team sport that requires a great play book. As a starting point for creating your own plan, Gable PR has developed a detailed checklist (click here) to guide any organization through the essential elements required. Think of it as a critical pre-flight check list. From this start, any organization can adapt it and keep it evolving to keep up with the changing requirements for communicating in the nanosecond news cycle spawned by Twitter, Facebook, Blogs and traditional media embracing 24/7 coverage.

Depending on each crisis, some areas will require more research, planning and action than others. Please take a look at the list and let me know what else might be added, enhanced, edited, deleted or explained more clearly. Crisis PR, to borrow a line from Ernest Hemingway, is something of a moveable feast and the goal is to take charge of the menu.

Road to Recall

Posted by Tom Gable

The Toyota crisis PR case is not just about the recent recalls, global media scrutiny and potential Congressional action in the U.S. It has metastasized from neglected issues within the body corporate to impact vital functions in every fiber of the Toyota being.

Possible deeper issues were discovered by Ken Bensinger of the LA Times and others in major media. He started following the case after an off-duty CHP patrolman and three family members died when the accelerator stuck on their Toyota and they crashed in rural San Diego County in August 2009. Toyota’s president, Akio Toyoda, apologized. Soon, Toyota recalled 4.3-million-vehicles, its largest recall ever.

As outlined in an interview with the NPR affiliate KPBS in San Diego, Bensinger and his LA Times colleagues started probing. They found issues going back to 2001, 2007 and 2009. Toyota talked about floor mats as one cause, then the next day said there were issues with a sticking accelerator pedal. Analysts thought the answers didn’t add up and began asking about design flaws in the electronic throttle system. Were there deeper problems that Toyota wasn’t addressing?

Bensinger said Toyota talked about quality and safety but seemed to be ignoring problems. He said they practiced global “obfuscation” and he then walked the KPBS listeners through a litany of Toyota transgressions over the past decade.

The problem from a PR standpoint wasn’t just obfuscation and a pattern of not dealing with the issues in a forthright manner. As I noted in the same interview, the issues go into the heart and soul of the corporation. What does Toyota stand for? What are its values? Those are the first questions corporations need to ask themselves if they are going to position themselves above the competition. Then, can they deliver on the promise?

If Toyota stresses quality and safety, can it relaunch and walk the talk over time? Can it invest in image as a part of corporate strategy, not in stonewalling, silence and slow responses?

The Wall Street Journal in an essay on Feb. 6 identified deep cultural factors to be overcome:

In Japan there is a proverb, “If it stinks, put a lid on it.” Alas, this seems to have been Toyota’s approach to its burgeoning safety crisis, initially denying, minimizing and mitigating the problems involving brakes that don’t brake and accelerators that have a mind of their own. President Akio Toyoda, grandson of the founder, was MIA for two weeks and the company has appeared less than forthcoming about critical safety issues, risking the trust of its customers world-wide.

This has been a public-relations nightmare for Toyota, as its brand name has been synonymous with quality and reliability. Crisis management does not get any more woeful than this and the cost of this bungling so far—the initial $2 billion recall and the loss of 17% of share value since Jan. 21, when the gas-pedal recall was announced—is only a down payment on the final tally. The recall will surely expand, including cars produced in Japan. Lawsuits are being filed and an expensive settlement looms. And then there are the idle factories and empty showrooms to account for.

It is not surprising that Toyota’s response has been dilatory and inept, because crisis management in Japan is grossly undeveloped. Over the past two decades, I cannot think of one instance where a Japanese company has done a good job managing a crisis. The pattern is all too familiar, typically involving slow initial response, minimizing the problem, foot dragging on the product recall, poor communication with the public about the problem and too little compassion and concern for consumers adversely affected by the product.

The New York Times also documented a pattern of slow response on safety issues and detailed engineering issues going back to 1996 and covering almost every model.

Can Toyota change its DNA? At a press conference in Nagoya on Feb. 5, Toyota President Akio Toyoda expressed his deep regret for the inconvenience and concern caused to Toyota customers. He said he would take the lead toward improving quality around the world by establishing a global quality task force and implement a six-point action plan to improve quality in every region.

Turning the Exxon Valdez wasn’t easy. Check back in two years, which is probably the minimum time it will take to make a course correction, set new plans in place, start building a new culture and generating consistent, positive results over time versus navigating through the rubble from a permanently damaged reputation.

Shrinking image?

Posted by Tom Gable

The news media, auto industry analysts and elected officials have been aggressive in going after Toyota for its delays in responding to a growing crisis about sudden acceleration in some of its models from gas pedal and floor mat issues.

NPR opined that “the carmaker that could end up doing long-term damage to the sterling reputation it has painstakingly built up for several decades.” It cited a slow response time in dealing with the problem and communicating.

Critics in the story noted that “the worst-case outcome for the company would be if any of the investigations uncovers evidence that Toyota has been aware of the problem for longer than it has admitted.” This implied that Toyota may be hiding something.

The theme turned up in a Los Angeles Times story:

The pedal maker denies that its products are at fault. Some independent safety experts also are skeptical of Toyota’s explanations. ‘We know this recall is a red herring,’ one says. Sudden-acceleration events in Toyota and Lexus vehicles have been blamed for at least 19 fatalities and 815 vehicle crashes since 1999.

Critics jumped on quickly to ask for specific timetables. The Toyota CEO was largely silent (a Japanese TV crew caught him at a financial conference in Davos, Switzerland, where he made a short apology). Toyota then pulled its brand advertising, ran public service ads in major daily newspapers around the country, hired a PR firm and started communicating.

When Toyota went public with a PR blitz, they used their head of U.S. sales rather than CEO. Some said this seemed to indicate that Toyota wasn’t dealing with the issues at the highest level.

“We deeply regret the concern that our recalls have caused for our customers, and we are doing everything we can — as fast as we can — to make things right,” Jim Lentz, Toyota’s U.S. sales chief, said in a statement on Monday (Feb. 1, 2010).

Although late in responding by crisis PR standards, Lentz did the classic: recognize the issue, apologize, empathize and then set a vision for the fix.

Over the years, in dealing with crisis communications issues involving everything from religious scandal, to threats to public safety, to corporate and organizational implosions, Gable PR has found that three basic principles should guide your actions in every crisis situation:

One – Be honest and stick to the facts. Do not speculate, hypothecate or exaggerate. Those impacted by the crisis deserve nothing less – and your reputation may be damaged irreparably if you aren’t truthful and authentic.

Two – Think strategically about the long-term. It is too easy to be reactionary, get caught up in the grinding short-term pressures of the situation and scurry to respond to those demanding answers from every quarter. What do you stand for? What are your core values? Are your responses to the crisis consistent with these values? How will your actions today be viewed a year from now? Five years from now?

Three – Maintain unified and consistent communications during implementation of your plan. Nothing will erode your credibility faster than conflicting messages coming from different sources within your organization (be aware that the media – and class action attorneys in some cases – will pursue every angle in search of controversy, unethical behavior or criminal intent).

Toyota can get beyond this crisis, recover from short-term damage to its brand and regain the trust and respect it enjoyed by investing in image as a part of corporate strategy. What will Toyota stand for in five years? Quality, customer care, engineering, design, reliability, value? All of the above? Whatever the vision, the next step is developing a strategy to provide ongoing evidence to support the vision. This goes beyond manufacturing to every way Toyota touches its customers and future customers.

In the era of instant communication, organizations need to take an immediate look at the issues it faces. Gable PR uses a crisis communications check list for starters. In less than an hour, we can work through the issues and determine priorities and critical tasks for action, including the speed of response.

For Toyota, it may have done a fast analysis and then decided to go slow in responding for internal or legal reasons. For the “new Toyota,” it should establish procedures for responding at warp speed to any outside concern. Instead of two days to a week, how about two hours or less, even if it’s to say “we are working on this and will get back to you as soon as the facts are in?”

For energizing every corner of the organization, the management schools have many cases for going beyond PR and establishing operating principles to live by in evolving the culture. What directions will Toyota give to its design and engineering teams to analyze what happened with the pedals and mats and develop new approaches to quality control? For the future, if a problem occurs once a new model rolls out, have rapid response teams with the power to analyze issues and make fast decisions on resolving the problem and then pro-actively communicate the new direction with an integrated PR program.

A pro-active internal approach builds support and understanding, then provides the foundation for launching the pro-active communications program. Educate internal audiences first. Develop a consistent messaging strategy, from the basic level of how dealers will answer their phones and respond in the future. Establish procedures for Tweeting updates as they occur and linking to Web sites for more details. Even if working on the image over three to five years, build a sense of urgency into the culture. Empower people to think about continuously improving every aspect of the business every day. By setting a new standard and vision, Toyota can then set in motion the critical business practices and cultural commitment to walk its talk over time – and finish a lot better than it started.

Worked for me!

Posted by Krista Rogers

Among the top New Year’s resolutions are pledges about weight loss and exercise, so it is no surprise that when January rolls around we are besieged with gym and health-food advertisements. Ironically, as awareness of unhealthy transfats and the American obesity pandemic grows along with our waistlines, the fast food restaurants that have been guilty of clogging our arteries for years are now tooting their healthy-choices horn louder than ever. This makes sense from a marketing standpoint. People want healthier options, so it’s smart to truthfully highlight the healthier menu items. What doesn’t make sense is when a popular fast food chain tries to convince a nation that their “Drive-Thru Diet” is a weight loss secret.

Taco Bell, a quasi-Mexican fast food restaurant, isn’t just pitching its healthier options. It has gone pro-active and launched a misleading campaign with New Year’s “Frescolutions,” and seven menu items claiming to have nine grams of fat or less. Chewing on the campaign disclaimers will probably burn more calories than the 500 calories it claims you will save. How authentic is the diet and, beyond the bun, its Mexican cuisine?

The fine print includes:

“DRIVE-THRU-DIET® IS NOT A WEIGHT-LOSS PROGRAM… TACO BELL’S FRESCO MENU CAN HELP WITH CALORIE REDUCTIONS OF 20 TO 100 PER ITEM COMPARED TO CORRESPONDING PRODUCTS ON OUR REGULAR MENU…. FRESCO MENU ITEMS ARE NOT A LOW CALORIE FOOD.”

This comes at time when a new study published in the Journal of the American Dietetic Association, states that prepared foods may contain an average of 8 percent more calories than are printed on package labels and restaurant meals may contain a whopping 18 percent more.

Bottom line (a big bottom line): the Drive-Thru Diet is increasing belly laughs rather than reducing waistlines.

Additionally, the Mexican fast food chain has a commercial starring Christine Dougherty, who says she lost 54 pounds on the diet. Christine’s story, however, is unclear on the details. Christine says that she reduced her total daily calorie intake by 500 calories to 1,250 calories by choosing Fresco items and “making other sensible choices” (sharing Fresco items with companions?).

The restaurant’s creative and long-standing slogan “Think Outside the Bun,” is clever and relevant, however the diet program seems to lose sight of its target audience, those in search of filling ground beef tacos and burritos from the “late night menu” and “4th meal” categories.

Lessons learned? Fast food restaurants will never be considered a healthy diet option or a great stop along the road to weight loss. Taco Bell may be joining other fast food chains in offering healthy choices to offset criticism and possible government regulation. That can be done, but without the hype. Be authentic, clearly present the facts and be creative with your key messages, themes and keep your core values in mind in all that you do. If you stray too far, instead of getting people to “Think Outside the Bun,” you may convince them to go elsewhere. As the saying goes, here today, gone tamale.