Posts Tagged ‘behaviour’

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.

Colourful quotes continued

Shortly after publishing this post yesterday on the importance spokespeople (and business leaders) communicating their personality, a friend sent me a link to a Harvard Business Review post, by Roberto Verganti, on a tenuously-related topic.

I particularly like this passage: “…visions are intrinsically ideological and biased towards a clear aspiration of how the world should be: They strongly reflect the personal culture of the thinker.”

For many spokespeople, managing the art of communicating their organisation’s key messages in the thrust and parry of a media interview is enough of a challenge to be going on with, thank you very much.

However, for those in true leadership positions, a bigger challenge is communicating Verganti’s idea of personal culture. If you’re a business leader then you were hired to manage a business (or you built it up yourself), so that’s a given. But if you want your people to follow you, you need to share your vision and show them you’re prepared to lead.

Courageous, colourful quotes get you noticed, and probably knighted

“Those with the strongest views that the price of Australian houses “must” fall typically either don’t own one, don’t really know what they are talking about, or both.” – Rory Robertson, Macquarie Bank interest rate strategist

The above quote ran in this column by Michael Pascoe today. Perhaps its because my introduction to the British economy came courtesy of Robert Peston’s book, Who Runs Britain?, but from an outsider’s perspective I’d have to say that there’s a dearth of colourful spokespeople in the market. However, when I thought for five seconds about which British individuals I could imagine using a line like this, three names came to mind:

  • Sir Richard Branson
  • Sir Phillip Green
  • Sir Stuart Rose

And aside from wealth and knighthoods, that’s something the three individuals listed above all have in spades. Personality.

For business managers, PR people and spokespeople generally, this is brilliant news, because it means that if you’re prepared to say something colourful, the chances are you’ll get noticed.

The problem is, you can’t rely on media training alone to give you the colourful quotes. These have to be a reflection of your own personality. Media training, or presentation skills training, or even night classes in interpretive dance will help you to express that personality in a way that’s right for your audience.

At the end of the day though, that expression comes down to having the courage to share a bit of yourself with the rest of the world.