Guest Blog by Jonathan Hemus, managing director of Insignia.
When planning for potential crises that may strike your organisation, until recently, dealing with inappropriate employee behaviour was unlikely to top the list. That has all changed with scandals involving Hollywood, the Presidents Club and, this month, Oxfam that saw the deputy CEO quit over allegations of a cover up and the CEO face questions from a panel of MPs.
As we’ve seen with Oxfam, when the actions of employees strike at the heart of what an organisation stands for, it can cause serious reputational harm. The damage can be equally significant when senior executives abuse their power and position, as demonstrated by the Presidents Club dinner.
From a reputational perspective, it is important that organisations create a crisis-resistant culture that flows through the business. They should take steps to plan for major reputational threats that may strike at their core values and, if a crisis of this nature does strike, they will have the confidence and ability to reduce the reputational damage through what they say and do.
Creating a crisis-resistant culture within your organisation
A crisis-resistant culture can enable an organisation to prevent a crisis in the first place, or at least snuff it out before it escalates. Oxfam’s recent troubles have shown what happens to an organisation that lacks a crisis-resistant culture.
While the executive director of Oxfam International, Winnie Byanyima, can be commended for the compassion and sincerity she displayed in media interviews, it took over a week for any of these messages to reach public ears. By that time, several celebrity ambassadors including actress Minnie Driver and Archbishop Desmond Tutu had severed ties with the charity, the British government was considering cutting all its funding, and the international media had taken firm control of the story.
Oxfam’s problems were further compounded when its CEO, Mark Goldring, accused critics of “gunning” for the charity and said: “The intensity and ferocity of the attack makes you wonder, what did we do? We murdered babies in their cots? Anything we say is being manipulated…even apologies only make matters worse.”
The cardinal rule of communicating during a crisis is to avoid focusing inwardly. The crisis is not about you; it’s about the people that have been affected by it. Your crisis is guaranteed to escalate if you don’t demonstrate empathy in your communications.
The Oxfam scandal demonstrates the scale of damage that occurs in the absence of a crisis-resistant culture within an organisation. Communication is slow and lacks potency when it is delivered, leaving others to own the story and control what is said about you.
There are three key elements that should be embodied if you are to create a crisis-resistant culture:
- Structure – Beware of ‘over-centralisation’ and a strict hierarchy. Ensure that senior management is willing to listen to a range of stakeholders and experts
- Attitudes – Do people feel comfortable sending bad news to the top? Employees of all levels need to feel confident that any bad news they share with decision makers won’t be shot down or disregarded
- Values – Are you living and breathing your core values as an organisation? If ‘safety’ and ‘integrity’ are front and centre on your slogan, do you live up to these in every situation? If not, then you can’t really call them your values
What steps can you take to plan for a major reputational threat?
As an organisation, it is important that you acknowledge and understand the vulnerabilities within your business. The most effective protection against a major reputational incident is to plan for the worst-case scenarios however apocalyptic they may seem. Providing you know where the potential pain points are, you can prepare and plan your response more effectively.
It is also important to train, rehearse and test the people who will handle these different scenarios. Exercising these teams by running mock scenarios they might face will give them the most realistic dress rehearsal for the real thing. It will also build their confidence to do and say the right thing and make better decisions under pressure.
In a crisis your senior management team will be the public face of the organisation and must make big calls which will determine whether your reputation is preserved or, worst case, destroyed. Having the confidence and the capability to do and say the right thing during periods of extreme pressure means that their participation in crisis training and exercising is essential.
How to reduce reputational damage if crisis strikes
The Presidents Club scandal taught us that crises can ripple across an entire organisation. Business leaders involved in the infamous dinner, found themselves not only answering questions about their own conduct at the event but consequently the conduct and reputation of the organisations they represent.
Sir Martin Sorrell, CEO of WPP, which had a table at the event, issued a detailed apology for the “deep concern and offence” caused. Residential Land lost one of its major investors, Ivanhoe Cambridge, due to the “events and behaviours as reported by the media.” Ocado was subjected to a social media storm as customers tweeted that they would no longer shop with the online grocer following CEO Tim Steiner’s attendance at the event.
If you want to influence the crisis narrative, your communication to the outside world should be proactive and speedy. If not, the vacuum that you’ve left will be filled by other commentators, and they might not speak so highly of your organisation. Responding quickly and with confidence, also demonstrates that you are in control, and taking appropriate action to address the situation.
Inappropriate behaviour within organisations has been at the forefront of the media agenda in recent weeks. Many organisations rightly focus on cyber-attacks, terrorism and fraud as areas to protect themselves against, but recent scandals show that inappropriate behaviour can be just as damaging to reputation, yet harder to manage.
Organisations that plan and train their staff for every eventuality, will find themselves in a better position to cope with a crisis of this nature should it occur. Similarly, organisations that respond proactively and quickly during a crisis have a better chance of keeping their reputation intact.
Ultimately, you must ensure your organisation has a crisis-resistant culture. If this is not engrained in every element of the business, then handling a crisis will be infinitely more challenging.
Jonathan Hemus is managing director of Insignia, a specialist crisis management consultancy www.insigniacomms.com