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Reputation Management By Roger White, Director, Communication First Limited and Senior Associate, Jaffe Associates Europe Integrity and reputation are the only real assets held by partners in professional services firms: when one is lost, everything else follows, as Arthur Andersen LLP fatally discovered with the recent Enron debacle and as Grant Thornton is now facing with Parmalat. For that reason, every firm must develop a plan to prepare for the day its corporate integrity, or that of its professionals, is threatened. The global pressures to control corporate wrongdoing are intensifying. In the current climate, the conduct and competence of professional services firms are increasingly under the microscope. Given a choice of being accused of incompetence, negligence, or collusion, which would you select for your firm? Think before you answer; the wrong choice could spell the death of your organization, or your personal career. Media crises are often about accepting the lesser of those evils and acting properly to deal with the problem.
Not every drama becomes a crisis. Problems arise every day, and management is paid to deal with them in due course. A problem becomes a crisis when the media starts paying attention to it, amplifies it, and matters escalate rapidly out of your immediate control. If the focus is short term and media driven, it's a crisis. At that point, it becomes a matter of perception rather than reality; unfortunately, your firm will be perceived as guilty until proven innocent. For example, Clifford Chance was recently accused of overcharging clients (the perception) when the issue was one of staff discontent (the reality). When the perception does not match the reality of your position, the result is the "communications gap." Your firm's crisis communications plan should be developed with the aim of closing that gap. Most often, a crisis is marked by several recognizable characteristics: it affects the everyday life of the organization; there are real and lasting risks to the firm's image and reputation; it has the potential to affect the bottom line; and the pressure intensifies dramatically. It is important to remember that, while the media may precipitate a crisis, the crisis will never be solved in the media. The causes of a crisis are usually found inside the organization: unhappy or dishonest staff, bad management, a high-risk culture or poor risk-management processes, or failures in product quality control. For professional services firms, there is often the added risk that the problem is hidden within a client's business. But when, where, and how the crisis is resolved is entirely in your hands. Okay, it's a crisis. What now? Would you know what to do if a problem at your firm were to evolve into a genuine crisis? Having navigated through a variety of crises, I have learned a number of hard lessons, culminating in the following "top 10 tips" for managing in a crisis. Top 10 Tips for Crisis Management 1. Don't panic! Stay calm, think clearly, and act fast. Remember to look at issues from an external, not an internal, viewpoint.
3. Put someone clearly in control of managing the crisis. Your point person should be a senior person - although, ideally, not the CEO or senior partner - who has the credibility, authority, and courage to make decisions fast, without time-consuming, widespread consultation. You should also establish an effective communications network to enable the fast flow of information both internally and externally. Keep in mind that the information must flow in both directions, from the top down to staff and out to clients, and in from clients and up from staff. 4. Form a small but dedicated multi-disciplinary crisis team. Your team should include advisers, communications specialists, lawyers, risk managers, technical specialists, and seasoned hands with knowledge and experience. Bring in an experienced crisis/reputation management adviser to provide objectivity and an external perspective. As an in-house director of corporate affairs, I initially resented the presence of these expensive outsiders, but very quickly learned to trust and value their input. Keep the delivery under your command but welcome the advice, guidance, external viewpoint, and sometimes painful honesty. 5. Conduct a very fast SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis of the problem. Explore the causes and likely consequences. While your analysis will be crude and rudimentary in the first few hours, it will be key to how you go forward, possibly for years ahead. A prerequisite of crisis management is to be brutally honest with yourselves. If you are less than open with each other, the crisis will control you. It is important to avoid apportioning blame at this stage. You need to gain an understanding of what has happened, and that requires everyone to work together. Accept that you are accountable as a firm, and take collective responsibility until you can really see the forest through the trees. Then continue investigating for yourself; review work, files, and procedures, interview all concerned, and be sure that your first assessment remains fundamentally sound. Take action early to address the real problem, and exceed what is expected of you by a significant margin. Also, try to keep in mind that the media is not the problem; be cooperative and don't be distracted by the clamor. 6. Formulate your key messages quickly, and stick to them. Because you may need to sustain your initial position for a long time, be sure that your position is tenable. Make the case clearly and simply, ensuring that it is understood both inside and outside the firm, and repeat if necessary. Make sure that everyone is singing from the same page in the same song book. And, look to identify positive messages as well as responses to the negatives: what the firm is doing to resolve the problem, the long-term benefits to customers, and the lessons learned. 7. Handle the media sensitively, professionally, and with an understanding of their agenda. The media will have three questions: What happened? Why? And, what are you doing about it? Keep in mind what the media want: a good story with new and different angles that will interest, inform, and entertain their audiences. They will be trying to identify the cause even if the full facts are far from known, and they will be seeking to identify the victims as well as someone to blame. Don't allow a communications vacuum to occur. Nature abhors a vacuum and so does the media. If you don't tell them anything, there are plenty of others who will fill the void, and you can be sure they will not be on your side.
9. Use direct communications with your stakeholders. The media has the widest impact but it is uncontrolled. Take advantage of your "narrow cast" channels to get specific messages to identifiable audiences. 10. Never lie! Outright untruths, as well as lies by omission, can only serve to exacerbate your problem. The moral of the story... Great crisis management is a critical part of great reputation management. The leadership of a professional services firm, and the partners in it, must manage their reputation as aggressively as they manage costs or any other management responsibility. If they don't, the consequences will be expensive at best, and at worst could be as dramatic as they were for Arthur Andersen LLP.
Roger can be contacted at rogerwhite@communication-first.com or
by telephone at 00 44 207 549 2801. |
So is this a crisis?
2. Manage the response early and from the top. Your CEO or senior
partner should stand up and be the voice of the firm. If being
in the limelight is not a personal strength, he or she must concede
that point and allow you to work around it. Find agreement on your
crisis strategy, get the commitment of top management, and then
provide decisive leadership. Indecision from the top, slow or late
responses to the media, or an apparent lack of concern for the
victims will make people nervous, suggest there is something to
hide, and make you a bigger target.
8. Listen to your stakeholders and the public. Research what people
are really thinking about your firm. Don't base your strategy solely
on what the media are saying, but find out what impact the crisis
is having on clients, employees, and other key audiences. Then,
craft your tactics to get the real messages through to the people
that matter. Continue to monitor and measure public perceptions
long after the immediate crisis has passed to see if there are
lasting implications for your brand and reputation, and act accordingly.
Roger White is founder and director of Communication First Limited
and a senior associate of Jaffe Associates Europe, where he is
responsible for strategic communications advice to clients in
the UK and continental Europe. Before becoming a consultant specializing
in strategic communications and reputation management, Roger
served as director of corporate affairs for the world's largest
professional services firm, PricewaterhouseCoopers. Throughout
the last decade, he managed crisis and reputation communications
during corporate scandals such as Maxwell, Barings, BCCI, Enron,
and Polly Peck International, as well as many other issues that
could have had an impact on the reputation and integrity of the
firm or its clients in the U.S., UK and Europe.
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