How good a risk manager are you?

It would make sense for a company’s crisis and risk managers to spend a bit of time talking to each other, perhaps even making an effort to get a rudimentary understanding of the other’s job.

Crisis management is made a lot easier if you can eliminate a lot of things that frankly just shouldn’t be issues in the first place, and I’m a fan of easy because it means I can have holidays. Also, it means your business is probably in better shape if you’re not having successive disasters.

Happily, the product recall experts at Zurich have created an online game to test your skills as risk manager for a manufacturing company – click on the pic below to try your hand:

It’ll take you anywhere from 3-15 minutes depending on how much you want to cheat with Google. Also…if you disagree with the answers, seriously, don’t email me. I didn’t get them all right either.

The three Rs of product recall communication

It’s been a long time between drinks here on our team blog. Largely due to the fairly annoying nature of proper crises coming up at those incredibly inconvenient times and making me focus again on my day job. Also, I have just been on holiday, so now that I’m recharged with a full dose of melanin, we’re back and raring to go.

Way back in June I attended the airmic 2010 annual conference, which sees risk managers join with insurers and other like-minded types to talk about all things risk. I was invited to attend by our friends from Zurich Financial Services, as they launched their new Product Safety and Recall Insurance offer to the UK market. Read the rest of this entry »

Preparing for a crisis: webinar presentation now posted

Yesterday I had the privilege of speaking as part of Communicate magazine’s first Shouting With a Whisper webinars, on the topic of crisis preparedness.

For the next few months you’ll be able to view the webinar on demand. Or, if you just want to skim through a half-dozen slides on my bit you can view it below or on Slideshare.

Catherine Cross on debate performances

Further to last week’s post on the increasing demand for broadcast interview skills in this rapidly-expanding age of digital magnificence, here’s Hill & Knowlton’s own Catherine Cross, Lead Counsel, Media Training, with some of her insights into the debate performance offered up by Messers Brown, Cameron and Clegg:

NB: Candidates are listed in alphabetical order, since this blog is apolitical. And make sure you check out our regular campaign updates and analysis over on H&K London’s main blog.

“Death of print media” will demand an uptake in broadcast media training

On Wednesday night I attended the launch of IFW-Net.com, the new iteration of one of the world’s most-respected trade publications.

As anyone who’s ever looked at a newspaper website, the versatility of publishing online means no-one is restricted to a single medium. The team at IFW is in a great position to capitalise on this opportunity, and as a result so are the companies that IFW reports on.

Historically, TV has been the domain of the sexy – whether that’s the beautiful people, the popular brands or the big numbers. But with more and more trade media going the same way as IFW, there will be a growing demand for quality talent to provide on-camera interview content.

Obviously, I have a vested interest in this because Hill & Knowlton provides media training as a service. See, I’ve even linked to it, to make it easy for you to check out. The thing is…doing an interview for a web-based video is still doing an interview. It is more important to get your interview / delivery technique right than it is to care that you’re going to be on the internet rather than the BBC.

Doubtless we’ll see a massive flood of specialist digital agencies start offering some kind of on-camera performance training for web interviews in the coming months as they seek to tap a new revenue stream. The question for communicators and your company spokespeople is: is that really what you need?

(Once you’ve answered the question, put in a call to our Head of Media Training, Catherine Cross)

Five lessons for crisis managers – as taught by faux pas on the Election trail

In case anyone has been hiding behind the sofa in recent days, or indeed is currently residing outside the UK, then you may not be aware that it’s General Election season here. This means the next four weeks will see wall-to-wall media coverage of a small group (mostly men) talking to several other groups (mostly disillusioned voters) about the economy, healthcare, education and the ever unpopular expenses scandal.

This level of media exposure is something that most companies can only dream of. However, this exposure also presents a constant challenge for the political parties and their staff to maintain the 3 As for their key spokespeople: Appearance, Appeal and Ability to communicate.

The 3 As are particularly difficult for politicians on the campaign trail because, unlike the comfort of a broadcast studio, they’re at the mercy of the general public with whom they are interacting. Already in the past week we’ve seen two incidents which highlight the reputational problems this can present.

Firstly, on the day after the Election was announced, Gordon Brown encountered his first ‘heckler’ on the campaign trail. Brown chose to ignore his repeated questioning, instead heading for the sanctity of his ministerial car. Unfortunately the cameras caught the whole episode, and within hours the video was on the net and in the evening news bulletins. Cue the notion that the Prime Minister only listens when he wants to.

Then, it was the turn of the Conservatives to encounter public anger. When their home affairs spokesman, Chris Grayling, made some unfortunate comments about homosexual rights, the party was bound to encounter the wrath of gay and lesbian rights campaigners. What they perhaps didn’t foresee though was a demonstration outside party headquarters, swiftly organised via Facebook. Again, cue the cameras and subsequent reports on the evening news bulletins and next day’s papers.

In this second case though, the Conservatives at least made several of the right moves before and during the protest – they engaged with the protestors during the demonstration and also held meetings away from it with the protest leaders to discuss the issue.

Companies are often left with having to face and contain similar kinds of protests following job losses, poorly received pay negotiations or other unpopular decisions. There are no hard rules on controlling these situations to ensure a successful outcome. Nor are there any quick fixes or guarantees to avoid less than favourable media coverage of the event for your organisation.

What there are though are some good basics that can be done:

1. Dialogue – have meetings been arranged to try to prevent the demonstration or at least resolve the issues behind it? Will any senior company figures be available to listen to the concerns of the protestors on the day?

2. Briefing the staff - does everyone know about the demonstration? Do they know how to respond if/when they’re quizzed by media or protestors? Have you prepared Q&A documents, media statements etc for quick deployment?

3. Security – what measures and procedures do you have in place if things turn ugly?

4. Preparation – above all, have you anticipated and planned for this kind of event happening? If you have, great, but then ask yourself if you’ve tested or simulated such an event to see if you can really pull it off under pressure? If not, it might be time to think about doing this.

5. Future proofing – and finally, what have you done and what still needs doing to prevent the issues that lead to these kind of demonstrations in the first place?

Recession recovery poses crisis management risks for industry

On the weekend I wrote a post for our new Energy & Industrials team blog, titled Habitual behaviours force shippers and miners into crisis management mode.

The basis for the post was the correlation between:

 “…two seemingly unconnected events…25 people were killed in a West Virgina mine exposion [and] a Chinese coal carrier ran aground on the Great Barrier Reef…I say ’seemingly unconnected’ because geographically the two events are about as far apart as you get. The respective industries are also unrelated…”

The connection is actually in the habitual behaviours performed by the respective companies, and to learn more about those you should click on the link above and read the original post.

What I’m more interested in here is a quick look at the sheer volume of corporate crises that we’re seeing in 2010. At least four major car makers (Toyota, GM, Honda, Nissan) have had multi-market product recalls. At least two major consumer brands (Nestlé, Unilever) have had issues with palm oil. I’m not even going to touch anything that’s been specifically labelled as a “social media crisis” in this list of examples.

Looking at all of these, the common link is still habitual behaviours. Whether it’s cutting corners on safety or engineering standards, taking short-cuts on voyages to speed up transit times, weakening the supply chain by creating untenable bottle-necks or driving suppliers down to almost margin-less prices, or other unsustainable corporate behaviours…none of these things are “one-offs”. They are all tried and tested behaviours that have become ingrained in an organisation’s culture.

When the global financial crisis hit, many of my clients assumed I was run off my feet with crises. The opposite was true. One or two disasters in a recessionary environment will have a much greater impact on business managers than they would do in the good times. (RM, if you’re reading this, I was still busy!)

In the past 18 months we first saw a deluge of stories about banks’ risk managers being ignored, followed by story after story about careers in risk management being the new black. When the economy is in meltdown and your business is more exposed than ever before, you pull all the stops out to ensure crises just don’t happen. When the revenue tap gets turned back to a trickle, you cut “non-essential” operations – those pesky things like marketing budgets (where’s my ROI???), crisis training (why are we doing this if we haven’t had a crisis in three years???), media monitoring (we’ve cut our marketing, we don’t need to pay for media clips???).

Which is why we now have problems.

After 18 months of hyper-sensitive operational behaviour I think companies have forgotten what it’s like to have to deal with a crisis. Regardless of the growth in social media over the same time, the fundamental principles of good crisis management haven’t changed, but it seems the effective execution of those principles has gathered enough dust to make a real difference. This has been compounded by those bad habits being repeated faster, on a bigger scale, as companies try to trade their way back to the heady days of 2007.

There’s not actually any reason why so many of the high-profile crises of the past six months should have made the headlines to the extent they did.

I expect we’ll see still more high-profile crises rolling out before the end of the year. It should be a good year for crisis management consultants, because for every company in crisis today there are usually three or four who were lucky it wasn’t them. But that’s not good news for shareholders.

Good crisis management depends on getting PR 101 right

My grandmother was the first person to explain to me how crisis PR works.

When I was four years old I broke one of her dinner plates. I didn’t think she’d find out. But she did, and when she did, Grandma asked me if I’d done it. “No Grandma.” Of course, she knew I was lying, and she taught me the first lesson of good crisis management.

Own up.

When I was seven, I broke her crystal punch bowl. Lip trembling, evidence in hand, I presented myself to her ready for punishment to ensue. I owned up. Grandma asked me how I felt. “Bad.” And then the second lesson of crisis management: was there anything I wanted to say?

“I’m sorry.”

Four years later, aged 11, a game of indoor cricket ended with the world’s ugliest porcelain cat losing an ear to a cover drive. Once again, I presented myself to Grandma: “I’m sorry Grandma, I broke your cat.”

She handed me a tube of glue, and the third lesson of crisis management:

“Well, then you’d better get to work and fix it.”

Own up. Say you’re sorry. Fix the problem.

I’m on a bit of a soapbox lately about what PR actually is, because from a crisis management perspective the accuracy of the definition does actually change the behaviour of management. Do we want to fix the problem, or look like we’re fixing it? Tip: if the word Enron means anything to you, you should probably aim for the first option.

For the purpose of this post, since most crisis management is more concerned with fixing stuff than with parties and press junkets, I’m going to use this definition from the Public Relations Society of America.

“Public relations helps an organization and its publics adapt mutually to each other.”

Actually, that’s a bit clunky, so I’m going to tweak it to read: public relations helps and organisation build and maintain mutually beneficial relationships with its publics.

Mutually beneficial relationships are built on trust and respect for each other. Demonstrating responsibility for our actions and a commitment to doing the right thing – that’s how organisations build trust with their stakeholders. And in turn, when something does inevitably go pear-shaped, stakeholders will trust us to make it right.

So for organisations with a crisis on their hands, I’d like to pose three questions to help keep management honest:

  • How are my stakeholders being negatively affected by what’s happening?
  • What can I do to rectify that situation?
  • How can I best communicate my actions to my stakeholders?

I’d like to think that at least one of this year’s high profile crises could have been averted, if only the bosses had listened to my Grandma.

Supply chain is your business’s Achilles Heel

Last week I attended the latest Dow Jones Expert Series seminar, and at this point I’m about to lose 90 percent of the visitors who just clicked through from Twitter, because I’m not going to bang on about social media.

When it comes to being in business, your success or failure depends more than anything else on your ability to actually do business. That means having something that a customer wants, and being able to sell that thing at a profit.

If for any reason you’re unable to do that, you have a problem. Assuming for the minute that you have a market that’s happy to pay your price, it’s your “thing” that becomes all important.

Enter the supply chain. Whether you’re making chocolate bars, cosmetics, cars or fighter planes, chances are you have multiple suppliers all providing you with different ingredients or components. If you’re an international business, odds-on that you have international suppliers. And if you’re cost-conscious, I’ll put another each-way bet on the fact at least part of your supply chain is based in Eastern Europe, Africa, Central or South America, or Asia.

Right about now you should be starting to get a little bit squirmy as you realise the exposure your business has to events outside of your control. If not, here’s a tip: civil unrest, terrorism, despotic regimes, earthquakes, floods, tsunamis. Here’s another you may be increasingly familiar with. Ethical sourcing.

Interestingly though, these aren’t your most likely sources of supply chain disruption.

According to Dr Brian Squire from Manchester Business School, around 88 percent of publicly reported supply chain disruptions between 2000 – 2009 were due to human influences. Think user error, industrial dispute, cyber crime, corporate sabotage, ordering the wrong widget…

Even more interesting (I think) is that 40 percent of those were classifiable as “deliberate”. When I say “interesting”, what I really mean is “pretty bloody disturbing”.

I was really impressed with Nick Wildgoose, Global Supply Chain Product Manager, Zurich Financial Services, who also spoke at the event and provided some best-practice insights into identifying, managing and mitigating risks in the supply chain. Here are a few pointers that should be considered when you next review your organisation’s crisis management planning:

  • Is our supply chain likely to be impacted by natural diaster, such as pandemic or earthquake? (Tip: if you’re making stuff in China…yes)
  • Is our supply chain exposed to any single-source issues? (Tip: if you’re sourcing anything from only one supplier at any point, then yes. This is part of the issue with the glut of automotive recalls in 2010)
  • Do we, or any of our suppliers, have issues with trade unions? (Tip: if you have a unionised workforce and you’re in a manufacturing business then…probably)
  • Are we happy with our own, and our suppliers’, business continuity planning? (Tip: you probably shouldn’t be if Zurich’s statistics were anything to go by)
  • Do we have multiple points of contact with our key suppliers, or is our relationship purely transactional? (Tip: if your business is dependent on the survival and performance of another business, it’s probably a good idea to have multiple relationships with that business)

We’ll endeavour to add some further detail to this topic in the coming weeks, but as a starting point I’d strongly suggest asking the hard questions sooner rather than later.

Plug alert: Manchester Business School is conducting further research into supply chain risk and resilience. Please contact Dr Brian Squire if your organisation would be willing to take part.

Brendan Hodgson on crisis management for a social media age

For those of our regular readers unable to make it to Hill & Knowlton’s Demystifying Digital (#HKD2 for all you Twitter pundits), we’re progressively uploading the Pecha Kucha presentations over on the Hill & Knowlton London blog site (sometimes called “the blog formerly known as Hank”).

This particular presentation was by Brendan Hodgson, a Senior Vice President from our Toronto office and a veteran of our global Issues & Crisis and Digital teams after more than a decade in the trenches:

It’s a little over five minutes long, but well worth a look. And if you think the idea of strictly limiting all PowerPoint presentations to a mere five minutes, from now until the end of time, then stay tuned!