The|Intangibles

Newcastle United - How NOT to Manage Reputation

Newcastle United FC is a storied franchise in English football and 'my club' in the sense that I was born a Geordie (the name used to describe people from the northeast of England) and therefore am genetically predisposed to being a member of The Toon Army, as frustrating as that can be. My father (long deceased) was a friend of one of the team's legends, Jackie Milburn ('Wor Jackie' as he is known), from when they both lived in Ashington in the 1940s.

This past season was a disaster for the club, with managers changing three times during a 38-game season and poor performances on the field by highly paid "stars'. The result is an ignominious demotion to the Coca-Cola Championship from the Barclays Premier League (where such other well-known franchises as Manchester United, Chelsea, Arsenal and Liverpool play).

The owner -- Mike Ashley, who has been problematic, if not a disaster, from the beginning according to most reports -- has been trying to sell the club since at least the last day of the Premiership season. It is now being coached by an interim manager.The players are furious and many of the first string players are asking for transfers. Even Ashley admits he has made a mess of things: “It has been catastrophic for everybody. I’ve lost my money and I’ve made terrible decisions. Now I want to sell it as soon as I can."

I have watched the public relations calamity unfold online on an almost daily basis through news reports from British newspapers and the NUFC's website (which tends to report absolutely zilch about what is going on). The extraordinary thing is that management appears to be saying naught. News reports are based almost exclusively on comments by players or "sources' close to the club.

From what I can tell, management has said nothing to reassure the city of Newcastle nor the club's extraordinarily devoted fans that the coming season in the lower division will be nothing short of a debacle. No reassurances are being given; no sympathy expressed; no plans outlined; no time frames given; no deadlines offered . . . in other words, completely counter to basic crisis communications principles.

Okay, maybe management doesn't see the situation as a crisis. Maybe management's solicitors or investment bankers have said it must say nothing. Maybe it is sending out news updates that no news outlet is picking up. Maybe it has a social network, YouTube channel, blog or Twitter presence which I just haven't been able to find. Or maybe management simply doesn't recognize the damage that is being done to its reputation.

The supporters will be there for the players on the pitch when the dust settles: but when Geordies are called on to support an NUFC management business initiative, when the city is asked for a concession or a tax, or when the club's history is written, who will be there to defend management's interest and its "license to operate" the Geordies' club?

Social Media and News Miscellany

Lots of juicy factoids and information today that add a little more to my thinking on new communication memes:

• Of the many striking statistics in a report called 'Inside Twitter' out of Canada's Sysomos people, this one stands out for evidence of the sheer stupidity of the hordes who now call themselves  'social media consultants': "Of people who identify themselves as social media marketers, 65.5% have never posted an update (on Twitter)."  I guess they just can't be bothered . . . or don't have time?
  

• To be filed under the tab 'Public Relations Through the Rear View Mirror', according to an article today in the Ottawa Citizen Canada's National Defence HQ has a new 'conduit' approach to public relations (in which all media questions are funneled through public affairs staff, with the journalist never allowed to speak to a subject matter expert directly) that the writer calls the 24 DAY news cycle: "Into this brave new world of hyper-speed news gathering, NDHQ has rolled out what I’ve termed, the “24-day news cycle. Yes, 24 days…..That’s about the length of time I figure that it takes NDHQ to answer a question from the news media…..if it is answered at all."

• Bear with me on this one. Those who follow me on Twitter will know that as a native 'Geordie' I am an ardent -- and frustrated, some would say foolish -- supporter of the Newcastle United football club, formerly of the English Premier League now relegated to tier two football as a result of an abysmal season this past year. Thankfully, the owner has put the club up for sale (at about US$200 million). Before he did so, he published a statement in which he said "I'm sorry" about four or five times. Frankly, it sounded hollow given Ashley's unwillingness to invest in the club and his lack of commitment to its success in spite of having one of the most loyal fan bases of any football club. The lesson here is simple . . . saying 'Im sorry' in a crisis is not enough. An apology has to be backed up by action to resolve the underlying problem. In this case, the owner getting out is the right move, although that is not counsel I would give to many CEOs.

• Finally, this about philanthropic giving . . . "Today, the Committee Encouraging Corporate Philanthropy (CECP) shares a first-look at results from its annual philanthropy survey of nearly 140 leading companies, revealing that 53% of companies increased their total philanthropic donations in 2008, and 27% increased their giving by more than 10% year-over-year." So things are not as bad as the CR critics would have us believe.
  

Maple Leaf Foods' Launches "Crisis" Blog

Maple Leaf Foods (not a client) today launched a blog in response to the 2008 Listeria deaths caused by eating its deli meats and, as with much of how the company handled the crisis, it is a very good model for the language and tone of effective messaging . . . frank, honest and contrite. (Although its design is quite lackluster.)

The first post is by CEO Michael McCain and here is how it begins: "Since August 2008 twenty-one Canadians have died after eating Maple Leaf deli meats contaminated with Listeria.  We all watched in horror as the worst food safety crisis in modern Canadian history rolled across the country." Now that's frank and the antithesis of how many companies begin apologies after serious events.

Later in the post Mr. McCain writes "This was by far the most awful event in the one hundred year history of our company.  I can’t properly describe the overwhelming sense of grief and responsibility we all felt … I felt, personally (emphasis added).  You may remember seeing me on television back then, apologizing for the tragedy and vowing to develop the most comprehensive anti-Listeria program of any food company in Canada." He then goes on to outline in details the changes Maple Leaf has made to reduce Listeria findings in its plants.

Even more significant he actually raises three subsequent issues related to Maple Leaf Foods' safety performance that most people had likely forgotten.

Textbook . . .

Dilbert Captures the Zeitgeist

As always, Dilbert captures the zeitgeist of attitudes towards CEO compensation today. (Hat tip to Dave Fleet for directing me to the link through Twitter.)

False Apologies and Greed

Since I have such respect for the quality of writing and ideas (although not always the politics) in the British magazine The Spectator, I am always delighted when the point of view of an editor or writer corresponds to my own. (I am not foolish enough to think there is any correlation between the two other than coincidence).

So imagine my contentment in reading the February 14th number when both the lead editorial and a column by Sarah Standing echoed comments I have posted here and here over the past few weeks.

Sarah Standing on saying sorry:

" 'Sorry' has lost its mojo for me, it's gone mainstream. It's one of those words that began life as a covetable Chanel handbag only to end up as a worthless flake flogged on eBay . . . I no longer believe in all these force-fed public apologies. They're starting to sound very hollow . . . I'm old school and from where I stand a true apology should come from the heart."

And not, I would add, because a crisis communications or political consultant has said it is necessary to apologize when harm has been caused. Without sincerity an apology is nothing more than gamesmanship. 

The editorial 'Bonus Points' calls out many British bankers for the damage caused by the huge payouts they received, which lead as the editors conclude to the wrong balancing of risk and reward: 

"Bankers must face reality and bring about changes themselves, rather than trying to face down public disgust with a last-ditch defence of the status quo. Their profession has to revert to being dull but respectable, decently but not lavishly paid, transparent in its accounting practices and the way it measures profits, intelligently regulated, and by nature risk-averse. And if that means talented people drift away from the banking sector, so be it: there are plenty of other parts of the economy that urgently need them".

Better said than by me, but at least my ideas are in line with some top notch writers.

Podcast on Crisis Communications

I was interviewed on crisis communications recently by Ian Hamilton, editor of Profit magazine, for his Business Coach Podcast series sponsored by Bank of Montreal.

The podcast was posted today and can be found here.

Interview in Law Times about Crisis Communication

Law Times (which keeps "keeps Ontario's busy lawyers and corporate counsel up-to-date with developments and trends in Ontario's legal scene") associate editor Robert Todd interviewed me about the Maple Leaf Foods listeriosis crisis.

While I usually refrain from commenting on how crises are being managed by companies with which I am not involved, and I respect the confidentiality of those clients with whom I am working on a crisis or major issue, in this case I felt it was okay to comment since I only had positive things to say about Maple Leaf Foods.   

The article is fair and accurate and provides a good summary of my point of view on the role of legal counsel in a crisis.

Tangible Knowledge from Social Media

There are a million "stories" online, and some of them say a lot about the different attributes that now constitute reputation:

Relentless PR, which I guess is a competitor of sorts, each month thanks people who have contributed to the 'conversation' on its collective blog. Because it features a former colleague, Leo Bottary, I have paid more attention to it than I might otherwise . . . and have even commented on posts. But the very fact that my name is included in the list boosts my willingness to put in more time on the blog.

Politeness evidently builds reputation.

The Chicago Tribune featured a piece on Monday about the use of Twitter and other social media tools during Hurricane Gustav. (Hat tip to Mark Shadle for this.) According to the Tribune, "Bloggers said their fascination with the possibilities of using online networks to track the storm and help others was fueled by new technology available to them as well as lingering frustration over the response to Hurricane Katrina three years ago."

People trust those with whom they share social networks, even if they are not "friends" as traditionally understood.

Gerald Barron at Crisisblogger points to a top notch analysis of the impact of social media on corporate reputation and customer behaviour. Michael Hyatt, president and CEO of Thomson Nelson Publishers, blogs about how quickly a brand can be damaged through viral criticism online. In particular, Hyatt talks about how Twitter was used to spread a specific example of poor customer service and uses that as a jumping of point for offering seven lessons for defending a company's reputation and brand in our digital age. The lessons are commonplace (no offence meant Mr. Hyatt.) But the fact they are coming from a CEO might cause others in the C-suite to pause as they consider reputation management strategies.Two lessons that stand out: Respond quickly and admit your mistakes.

As Gerald Barron observes,"The old Chinese proverb needs to be updated: 'It takes a lifetime to build a reputation, a single tweet to destroy it.' "

And below is a nice image from a post (no attribution of the image is given) by Jay Thompson that captures it all:

Lessons in Crisis Management

Michael McCain, president of Maple Leaf Foods (not a client), in the midst of a full recall of the food products made in its Bator Road facility at a news conference yesterday as quoted in The Globe and Mail:

"Going through the crisis there are two advisers I've paid no attention to. The first are the lawyers, and the second are the accountants. It's not about money or legal liability, this is about our being accountable for providing consumers with safe food."

Maple Leaf Foods full page "open letter" in today's The Globe and Mail:

"This is a terrible tragedy. To those people who have become ill, and to the families who have lost loved ones, I want to express my deepest and most sincere sympathies. Words cannot begin to express our sadness for your pain."

Professor Diermeier Agrees

Daniel Diermeier, a professor of regulation and competitive practice at Chicago's Kellogg School of Management has this to say today in The Globe and Mail about Maple Leaf Foods Inc.'s reaction to its meat product recall:

"They face a very, very difficult challenge here and it's very important that they have stepped forward and accepted responsibility. They have chosen to protect their brand, rather than protecting their legal liability. This is correct. They can deal with legal issues later, after they have rescued the brand . . . Crisis management should never be delegated to a legal department or corporate counsel."

Couldn't have said it better myself.