Logos Institute is very pleased to announce the publication of a new book by Helio Fred Garcia,The Agony of Decision: Mental Readiness and Leadership in a Crisis, volume 1 of Logos Institute Best Practice Series. The book is also the first volume in our publishing imprint, Logos Institute for Crisis Management and Executive Leadership Press.

The book is now available for purchase here for individual or bulk orders. For a 15 percent discount, use the discount code QW9CFYKM. A Kindle edition is also available here on Amazon.

This book is about how leaders and the organizations they lead can maintain reputation, trust, confidence, financial and operational strength, and competitive advantage in a crisis.

Through Fred’s 30-plus years of professional involvement in thousands of crises affecting companies, governments, NGOs, and other organizations, he has discovered that the real value in resolving crises is not in excellent internal and external communication, nor in highest-quality tactical execution, however important they may be – and they are mighty important.

Rather, real value came from helping clients figure out and answer the bigger questions and then make the tough choices in a timely way. The execution would follow. So would the communication.

But people often misunderstand. That’s why Fred felt the necessity of writing this book — to help leaders think clearly, plan carefully, and execute effectively when facing high-stakes decisions. A wise man once said, the only meaningful way to escape the agony of decision is by thinking.

This book is for leaders of organizations who need to be good stewards of reputation, trust, and competitive advantage; and for those who advise those leaders, whether in public relations, law, or other business disciplines. We hope you find it helpful.

Logos Institute for Crisis Management and Executive Leadership research fellow Holly Helstrom presented a case study on mental readiness and navigating business challenges to students in New York University’s MS in Public Relations and Corporate Communication program. Ms. Helstrom spoke on April 29, 2017 in an advanced elective on crisis communication taught by Logos Institute executive director Helio Fred Garcia.

This seven-Saturday elective course focuses in part on the predictable patterns of poor decision-making business leaders often follow during crises, and how this is commonly the result of leaders’ critical loss of perspective.

Holly Helstrom guest lecturing at NyU

Holly Helstrom guest lecturing at NYU

Ms. Helstrom demonstrated to the students that when leaders and their organizations regularly practice mental readiness — the persistent ability to remain calm, think clearly, and maintain situational awareness — it allows them to avoid or manage through crises successfully, and achieve enduring success.

latest

The focus of Ms. Helstrom’s case study was Pixar Animation Studios, one of the most successful film studios in the industry’s history. She provided an in-depth look at how Pixar’s leaders’ commitment to including the disciplines of mental readiness into everyday business operations has allowed the studio to routinely produce number one films and navigate business challenges successfully.

Ms. Helstrom highlighted some of Pixar’s processes that integrate the disciplines of mental readiness, then illustrated how these processes helped the studio in overcoming one of the most complex and challenging crises a business can face: a corporate merger with Disney.

disney_pixar_logo

Ms. Helstrom joined the Logos Institute for Crisis Management and Executive Leadership as a research fellow in 2016. She is lead curator for the institute’s intellectual capital materials, researching and preparing in-depth case studies that bring to life the principles and best practices that comprise Logos Institute’s curriculum.

NYU_3(1)

Prior to working at Logos, Ms. Helstrom worked in the Metropolitan Museum of Art’s public relations department. In 2015 she graduated from New York University with a B.A. in art history. Her senior research paper focused on the strategic use of art exhibits in post-war Germany as part of the country’s broader public relations campaign to refurbish its reputation on the international platform, and reunite the war-torn German population.

by Helio Fred Garcia

This is my sixth in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

Wall-Street-Reputation-NYU-Flag-2014-Sep (1)

See my earlier posts:

In this blog, Nicky Honghao Ruan looks at the issue of brand loyalty, and makes a counter-intuitive discovery:  Sometimes, very strong brand loyalty can make companies’ crises worse than if they don’t have brand-loyal customers.

Nicky explores a range of crises affecting different kinds of organizations, and identifies the criteria of the organization, of the customers, and of the crisis that predict whether brand loyalty will help or hurt an organization in crisis.

Better yet, she provides a template that can help leaders and their advisors anticipate what will work and what will hurt, and to adapt accordingly.  Worth reading.

You can download the entire capstone here.

 


Brand Loyalty in Crisis:

How does strong brand loyalty affect a company during crisis under different circumstances?

by Nicky Honghao Ruan

Nicky Honghao Ruan

Nicky Honghao Ruan

Consumers are familiar with programs like “My Coke Rewards,” “Marriott Rewards” or “AAdvantage,” that help to contribute to a core marketing concept — brand loyalty.

Brand loyalty has long been endorsed by marketing experts as an intangible asset for a company or organization. Conventional wisdom suggests that strong brand loyalty can empower a company to overcome crises, but practitioners often overlook the potential risk of strong loyalty when the nature of the crisis changes. In some cases, strong brand loyalty does not shield a company from crisis, but can instead become a liability because the high expectations of loyal customers were not met.

Through case studies, in-depth interviews with crisis management experts, and public surveys, my capstone examines the interplay between crisis conditions and the role of strong brand loyalty, and identifies various causes for both helpful and harmful outcomes.

As a result, I developed a model for crisis management professionals to quickly evaluate whether to incorporate a brand’s loyalists as defense strategy, or instead to plan for ways to prevent the extra harm that could instead be created by loyalists.

Mapping the Template

Chart 1Brand loyalty is more likely to help a brand under conditions in the left column (green), and more likely to harm one under conditions in the right column (red).

At the same time, those criteria in the top row (darker color) would have stronger impact than those in the bottom row (lighter color).

The one that falls in the middle column is especially situational and could go either way.

When a crisis happens, a company would be involved with more than one of these conditions. Depending on the situation at the time, crisis management professionals would take the template and check what criteria the brand fulfills and which side it tends to lean on more.

Examples

When Strong Brand Loyalty Helps:   

Blue Bell’s Listeria Crisis

BlueBell Logo

In early 2015, U.S. ice cream maker Blue Bell announced several rounds of complicated recalls of its ice cream after listeria in its products infected five consumers and led to three deaths.

Although its crisis response was strongly criticized, Blue Bell’s strong loyalists remained highly tied with the brand.  The beloved Southern ice cream maker made it through the summer without having any product on shelves. During the time, fans continued to engage with the company on social media.

In fact, Blue Bell’s fiercely loyal consumers were waiting in long lines outside stores when the company finally came back to the market.

Chart 2

 Apple  iPhone 4’s “AntennaGate”

Apple Logo

Very soon after Apple released iPhone 4 on June 24, 2010, complaints about signal attenuation began to flood the web.

When faced with growing negative reviews, widespread criticism and potential lawsuits, Apple’s initial solution was to tell users to not hold their phones in certain way.

Critics argued that Apple’s crisis response broke all the rules: the company didn’t apologize immediately or take full responsibility. Despite all the negative publicity and critics, demand for iPhone 4 continued to exceed supply.

Chart 3

In the case of Blue Bell and iPhone 4, the brand was in the green more than in the red. Therefore, their strong brand loyalty helped the companies overcome the crisis.

 

When Strong Brand Loyalty Hurts:

The “New Coke” Launch

CocaCola Logo

Thirty years ago, Coca-Cola made its worst mistake when, without warning, it abandoned its original formula and replaced it with “New Coke.”

Long-standing customers felt betrayed.

Some deserted the brand for its biggest competitor Pepsi.

Ultimately, Coke’s strong brand loyalty led to one of the company’s largest PR crises, driven by a fierce reaction from fans who believed Coke was neglecting them.

After three months of justifying the unilateral withdrawal of its beloved Coke, and insisting that customers would prefer the new Coke, Coca-Cola brought the original back as Coke Classic.

Chart 4

Susan G. Komen and Planned Parenthood

SGK LogoOn January 31, 2012,  the Susan G Komen Foundation announced its decision to stop funding  Planned Parenthood.

The halt would affect breast cancer screening and treatment services — mostly provided to poor or uninsured women — at 19 of Planned Parenthood’s affiliates.

Within hours after the news broke, Komen was flooded by public outcry. During the next three days, the foundation saw significant lost in donation and the negative response it received was overwhelming.

After 72 hours of the initial decision, Komen Foundation announced that it would reverse the funding decision.  But the reversal didn’t stop the damage.

Long-standing Komen supporters who felt hurt and betrayed refuse to forgive the organization. Both event participation and revenue of the nation’s best known cancer foundation continued to drop.

Chart 5

Volkswagen’s Emissions Scandal

Volkswagen Logo

In  2015, the U.S. Environmental Protection Agency (EPA) found that German automaker Volkswagen Group (Volkswagen) had installed software in a number of cars sold in the U.S. that would provide artificially positive results  during emission tests.

Volkswagen later admitted that it had intentionally equipped its vehicles to cheat on emissions tests. For the first time in 13 years, Volkswagen’s sales in the U.S. declined 15% in November 2015.

Marketing and communication experts think that Volkswagen would be hard to forgive, especially by many of its loyal consumers.

The fact that the company voluntarily cheated on the public was worse than negligence or mistakes in testing procedure, which set itself apart from other auto recalls in the industry though some of them even linked to deaths.

Chart 6

Conclusion

The New Coke, Komen and Volkswagen crises saw far fewer conditions in the green compared to those in the red. Therefore strong brand loyalty in these cases created a backlash.

This model creates a shortcut for communication professionals to quickly evaluate their brand loyalty’s position and the likelihood that loyalty will help or hurt the organization navigate a crisis.

When a brand falls more into the green cells, instead of immediately pulling out everything, e.g. halting production or crafting the perfect apology, time and money could be better spent on gathering information and resources to fix the problem.

When a brand falls more into the red cells, the essence of response strategy should include gaining forgiveness from loyalists.

Perhaps more significant, the model can stimulate companies to take brand loyalty into serious consideration before making business decisions.

by Helio Fred Garcia

To my Students: A Fourth of July teachable moment on framing —  starting with why — and career management, on the 240th birthday of the United States of America.

On June 7, 1776, the Second Continental Congress, meeting in Philadelphia, voted to separate from England; our own Brexit.

It passed a resolution put forward by Richard Henry Lee of Virginia, declaring, in part: “These colonies are, and of right ought to be, free and independent states.”

The Declaration of Independence, by John Turnbull

The Declaration of Independence, by John Turnbull

Who Writes The First Draft?

On June 11 Congress named a committee, known as the Committee of Five,  to write the announcement.  That committee included John Adams of Massachusetts, Ben Franklin of Pennsylvania, Roger Sherman of Connecticut, Robert Livingston of New York, and Thomas Jefferson of Virginia.

The committee initially asked Adams to write the first draft.  But Adams, 41, considered himself a statesman and thought the work beneath him.  So he suggested that Jefferson, 33 and a rising star, take the first draft.

Writing the Declaration by JLG Ferris

Writing the Declaration by JLG Ferris

According to the biography John Adams: A Life by John Ferling, Jefferson was confused by Adams’ suggestion:

“Jefferson asked, “Why will you not? You ought to do it.”
To which Adams responded, “I will not – reasons enough.”

That didn’t satisfy Jefferson, who insisted,

“What can be your reasons?”
And Adams responded, “Reason first, you are a Virginian, and a Virginian ought to appear at the head of this business. Reason second, I am obnoxious, suspected, and unpopular. You are very much otherwise. Reason third, you can write ten times better than I can.”

Adams may or may not have been sincere.

Jefferson yielded.

“Well,” said Jefferson, “if you are decided, I will do as well as I can.”
Adams concluded, “Very well. When you have drawn it up, we will have a meeting.””

There is no evidence that such a meeting took place. There is evidence that Franklin, then in his 70s, edited Jefferson’s draft carefully.

Start With WHY

So Jefferson took on the task. But instead of simply listing the grievances against the King, Jefferson, who knew a lot about persuasion, decided to start with WHY — First, with a meta-WHY, why a Declaration of Independence, as opposed to simply an account of the vote? And second, the WHY of separation.

First, WHY the Declaration:  Jefferson wrote that in such circumstances,

“a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.”

A Decent Respect for the Opinions of Mankind

Think about that for a moment: A DECENT RESPECT for the opinions of mankind.  That’s the foundation of public relations — and of all civil government.  This usually-overlooked opening to the Declaration is in many ways as important as what follows.  It creates accountability and sets a standard — what reasonable people would appropriately expect a responsible provisional government to do when it decides to leave.

Second, WHY the separation: First principle: All are equal.  Second principle: Fundamental rights are life, liberty, and pursuit of happiness.  Third principle: Government exists to secure these rights.

Move to HOW

And then the HOW: When government fails to do so, it is the right of the people to alter or abolish that government.

Heady stuff.

Of course, it was more aspirational than normative, as Lincoln pointed out 87 years later. We’re still trying to get it right.

Finishing the Draft

Draft of the Declaration, with Franklin's and others' edits

Draft of the Declaration, with Franklin’s and others’ edits

Jefferson’s draft was powerful but wordy.  Franklin edited it; the Committee of Five submitted it; the Congress tweaked it more.

The Declaration was ratified on July 2, and published on July 4.

DOI Final

The Broadside Edition of the Declaration of Independence, published on July 5, 1776.

Note that of the 1,338 words of the Declaration, the first 1,180 are all about the WHY and the HOW.

The WHAT, the text of the actual resolution of the Congress, appears only in the last paragraph and consists of only 127 words:

“We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do.”

And the Declaration closes with the final 31 words:

“And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.”

Rivals and Friends

John Adams as the second President of the United States

John Adams as the second President of the United States

Adams never quite got over missing the chance to get credit for the Declaration.  He went on to become the first Vice President and second President; Jefferson to be the first Secretary of State and third President.

TJ

Thomas Jefferson as the third President of the United States

History continues to view Jefferson — with all his flaws and contradictions — more favorably than Adams.

The two were fierce political rivals until both left office; then they became fast friends, frequently corresponding with each other (as only former presidents can do).

But Adams continued to envy Jefferson.

And both died on the same day, exactly 50 years after the Declaration was published, on July 4, 1826, exactly 190 years ago today.

According to legend, Adams, on his deathbed and unaware that Jefferson had died several hours earlier, lamented that Jefferson would outlive him.

He uttered this deathbed regret:

“Jefferson Lives!”

Of course, he was right.

 

Below, for reference, the final version of the Declaration of Independence.

……………………………………..

IN CONGRESS, July 4, 1776.

The unanimous Declaration of the thirteen united States of America,

When in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected them with another, and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.–That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, –That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security.–Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.
He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.
He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.
He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public Records, for the sole purpose of fatiguing them into compliance with his measures.
He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.
He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.
He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.
He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers.
He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.
He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance.
He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.
He has affected to render the Military independent of and superior to the Civil power.
He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:
For Quartering large bodies of armed troops among us:
For protecting them, by a mock Trial, from punishment for any Murders which they should commit on the Inhabitants of these States:
For cutting off our Trade with all parts of the world:
For imposing Taxes on us without our Consent:
For depriving us in many cases, of the benefits of Trial by Jury:
For transporting us beyond Seas to be tried for pretended offences
For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:
For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:
For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.
He has abdicated Government here, by declaring us out of his Protection and waging War against us.
He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.
He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.
He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.
He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our Brittish brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which, would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these United Colonies are, and of Right ought to be Free and Independent States; that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do

And for the support of this Declaration, with a firm reliance on the protection of divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

 

 

Helio Fred GarciaHelio Fred Garcia | Bio | Posts
29 Aug 2015

Ten years ago today Hurricane Katrina made landfall.  The rest, as they say, is history.

I won’t recount that history day-by-day here. There are plenty of special reports on TV and in the newspapers this weekend that help us see the horror as it unfolded.  For a day-by-day timeline of the federal response, see Chapter 3 of The Power of Communication, or see Failure of Initiative, the final report of the U.S. House of Representatives Select Bipartisan Committee to Investigate the Preparation for and Response to Hurricane Katrina.  That congressional report concluded:

“The Select Committee identified failures at all levels of government that significantly undermined and detracted from the heroic efforts of first responders, private individuals and organizations, faith-based groups, and others.”

But on the tenth anniversary of the flood, we have the opportunity to learn from the mistakes of that bungled response and to re-commit to the discipline of effective crisis response.  I will hit the high points (or low points) of Katrina response as teachable moments.

I monitored the hurricane and flood and then deployed to New Orleans in the second week as part of a corporate response to the disaster.  I saw first hand the consequence of the government’s ineffective handling of the crisis.

The author documenting Katrina damage.

The author documenting Katrina damage.

The federal government’s response to Katrina was bumbling, disorganized, and dishonest. It cost hundreds of lives. Many of the nearly 1,500 deaths in New Orleans happened in the days following the flood.  Many of those were preventable.

And the bungled response cost President George W. Bush his reputation. Until Katrina, President Bush had enjoyed a job approval rating above 50 percent. He had won re-election in a tough campaign just 10 months earlier. But after Katrina his job approval fell below 50 percent and never recovered. It fell first to 42 percent and a month later to 38 percent, and was below 30 percent the following year. President Bush finished his presidency with the lowest approval ratings of any president.

Bush approval

That loss of trust and reputation was preventable.  Because most of the bungled response was preventable.

Effective Crisis Management is a Leadership Discipline

Crisis management is the management of choices – the management of decisions that leaders make when things have the potential to go very wrong.

Effective crisis management helps leaders and organizations make critical business decisions that can prevent, mitigate, or recover from an event that threatens trust, reputation, assets, operations, and competitive position.

There is a rigor to effective crisis management that is equivalent to the rigor found in other business processes. But that rigor is often unknown, ignored, or misapplied by many leaders, to their own and their organizations’ misfortune.

That rigor includes a systematic way to think in a crisis.

Many leaders who otherwise are gifted managers – managing finance, or engineering, or marketing, or any other professional discipline, or even a whole company or government – throw rigor to the wind when a crisis emerges. Then they either make up a response on the fly or try to cobble together bits of knowledge from other parts of their experience. Or they ignore the crisis until it is too late. Or they think that their problem is one of public relations that can be rationalized away.

All of these things happened in Katrina. Indeed, from the President to the Secretary of Homeland Security to the Director of the Federal Emergency Management Agency, there was lack of situational awareness, ineffective and dishonest assurances of an imminent response, and then denial of their own mis-steps.  They focused more on saying what sounded good, but were singularly unable to deliver on the assurances they made.

Washington, DC, August 31, 2005 -- Michael Chertoff, Secretary of Homeland Security, at a press conference at Homeland Security Headquarters, The press conference was also attended by Stephen Johnson from the Environmental Protection Agency, Secretary Michael Leavitt of the Department of Health and Human Services, Secretary Samuel Bodman of the Department of Energy, Secretary Norman Mineta, Department of Transportation, Rear Admiral Joel Whitehead, US Coast Guard, Acting Deputy Director Patrick Rhode of FEMA and Assisstant Secretary for Homeland Defense Paul McHale from the Department of Defense. Photo by Ed Edahl/FEMA

August 31, 2005 — Michael Chertoff, Secretary of Homeland Security, addresses the media.  Photo by Ed Edahl/FEMA

 Every Crisis is a Business Problem Before it is a Communication Problem

Crisis management is far more than skillful public relations. Seeing PR as the solution to a crisis is a recipe for failure.

Every crisis is a business problem before it is a communication problem, and you cannot communicate your way out of a business problem.

The government set the bar very high early in the Katrina crisis.

The day before the hurricane made landfall President Bush went on television to reassure the citizens of New Orleans and the surrounding areas. He said,

“We will do everything in our power to help the people and the communities affected by the storm.”

FEMA Director Michael Brown also reassured the public:

“FEMA is not going to hesitate at all in this storm. We’re going to move fast, we’re going to move quick, we’re going to do whatever it takes to help disaster victims.”

FEMA chief Michael Brown alongside Governor Kathleen Blanco and Senator Mary Landrieu

FEMA chief Michael Brown alongside Louisiana Governor Kathleen Blanco, center, and U.S. Senator Mary Landrieu, left.

These were the right things to say.

But simply saying them was not enough.

Regrettably, both FEMA and the larger US government, having set those expectations, spent the next week dramatically under-delivering on them. As the horror that New Orleans experienced unfolded over the next few days, the government’s lack of effective action, and the disconnect between the rhetoric and the work, defined the president and his administration.

Crises play out in an environment of emotional resonance: fear, anxiety, anger, shame, embarrassment and other, often confused, emotions. Effective crisis communication, combined with effective management of other elements of a crisis, can address and even neutralize these emotional reactions.

New Orleans flooded on August 29, 2005

New Orleans flooded on August 29, 2005

Crisis Response =
Effective Action + Effective Communication

Effective crisis response consists of a carefully managed process that calibrates smart actions with smart communication.

The key to making smart choices is to use the right decision criteria – the proper basis for choice. And that means asking the right questions.

Indeed, in my experience working on and studying thousands of crises over more than 35 years, the most effectively handled crises were the ones where leaders asked the right question.  Ask the right question, and the solution can become clear within a matter of minutes. But asking the right question requires mental readiness; a readiness to shift perspective and to think differently.

The Leadership Discipline of Mental Readiness

Most counter-productive crisis responses begin with leaders asking some version of What should we do? Or What should we say? The challenge with this kind of question is that it focuses on the we – on the entity or leader in crisis. This results in the consideration of options that may make the people in midst of crisis feel good. But it is unlikely to lead to what is necessary to maintain trust, confidence, and support of those people whose trust, confidence, and support are critical to the organization.

What is needed is a different kind of thinking that begins not with the I/me/we/us but rather with the they/them – with the stakeholders who matter to the organization. The leadership discipline of mental readiness – the readiness to shift frames of reference from the first person — I/me/we/us — to the third person — they/them — makes all the difference.

And that’s because of the way trust works.

Maintaining Trust: Meet Expectations

A common goal for most organizations and leaders in crises is to maintain the trust and confidence of those who matter – shareholders, employees, customers, regulators, residents, citizens, voters, etc.

Trust arises when stakeholders’ legitimate expectations are met. Trust falls when expectations are unmet.

Asking What should we do? runs the serious risk of failing even to consider stakeholders’ expectations. Worse, it further risks the leader becoming stuck in his or her own perspective, in I/me/we/us. Hence, such crisis whoppers as BP CEO Tony Hayward’s “I’d like my life back,” or even President Richard Nixon’s “I am not a crook.”

Most crisis response failures can be traced back to the ultimate decision-makers focusing on their own frame of reference rather than on their stakeholders.  This was the case in Katrina.

The right question to ask when determining the appropriate course of action in a crisis is not What should we do. Rather, it is this: What would reasonable people appropriately expect a responsible organization or leader to do when facing this kind of situation?

Framing decisions in light of stakeholder expectations leads to smarter choices faster, and maintains stakeholders’ trust.

For any stakeholder group we can answer the question, What would reasonable members of this stakeholder group appropriately expect a responsible organization or leader to do? to a very granular level. And at the very least, one way to determine stakeholder expectations is to reflect on the expectations we ourselves have set.  So, in Katrina, President Bush set the expectation that the the federal government would do everything in its power to help the people affected by the storm.  FEMA chief Michael Brown said that FEMA would not hesitate at all, but would move fast and do whatever it takes to help disaster victims.

But when FEMA was seen to be slow and to create obstacles to rapid response, and when the U.S. government was not seen to be responding or even acknowledging the gravity of the situation, trust began to fall simply because the expectations the government itself had set were not being fulfilled.

 

Photo by the author.

We can inventory expectations to a very granular level for each stakeholder group, and we can then work to fulfill those particular expectations.

But regardless the particular expectations of any given stakeholder group, there is a common expectation that applies to all stakeholder groups all the time:  In a crisis, all stakeholders expect a responsible organization or leader to care.  To care that something has happened; to care that people need help; to care that something needs to be done.

One of the common patterns in crisis is this: The single biggest predictor of loss of trust and confidence, of loss of reputation, and of financial and operational harm, is the perception that the organization or leader do not care.

So effective crisis response, at a minimum, begins with a timely demonstration of caring. And it continues with a persistent demonstration that the organization and leader continue to care, for as long as the expectation of caring exists.

This is what was sorely lacking in the government’s response to Katrina.  Officials said they cared; but the tangible demonstration of caring didn’t match the rhetoric.

New Orleans flooded on a Monday.  Throughout that day and Tuesday, the government kept assuring the news media that FEMA and other agencies were on the ground and helping the victims.  But news coverage showed little federal presence except for U.S. Coast Guard helicopter rescues.  But no staging areas for victims; no shelters; but hundreds of people, mostly African-American, struggling against the rising waters and without help.  On Tuesday the news media persistently questioned why there was little evidence of federal help for the city, noting even that dead bodies continued to float by.

On that Wednesday the media not only covered the lack of a FEMA presence on the ground, but also how FEMA prevented or stalled potential aid from other sources.  For example, a fourteen-car caravan arranged by the sheriff of Loudoun County, Virginia, carrying supplies of water and food, was not allowed into the city. FEMA stopped tractor trailers carrying water to the supply staging area in Alexandria, Louisiana because they did not have the necessary paperwork. CNN also reported that during the weekend before the flood Mayor Nagin had made a call for firefighters to help with rescue operations. But as firefighters from across the country arrived to help victims, they were first sent by FEMA to Atlanta for a day long training program in community relations and sexual harassment. When they arrived in New Orleans, the volunteer firefighters were permitted only to give out flyers with FEMA number, but were forbidden from engaging in rescue operations. The media reported not only the resentment felt by the first responders, but also how FEMA’s policies hurt those people who were begging for aid in New Orleans.

That day Homeland Security Secretary Michael Chertoff held a press conference in which he said,

“We are extremely pleased with every element of the federal government, all of our federal partners, have made to this terrible tragedy.”

That day Mayor Ray Nagin went on the radio and blasted the federal government for its failure to respond quickly:

“I don’t want to see anyone do any more g*d-dammed press conferences. Put a moratorium on press conferences. Don’t tell me forty thousand people are coming here. They’re not here!”

On Thursday, the news media reported that hundreds of people who had been sheltering at the New Orleans Convention Center without food, water, blankets, or any other help.  FEMA Director Michael Brown went on four network news programs and admitted that FEMA had been unaware of the people at the convention center until the news media reported it.

That day commentators and late-night comedians began to question Mr. Brown’s fitness to serve.

On Friday President Bush visited the area, and famously praised Mr. Brown, addressing him by his nickname:

“Brownie, you’re doing a heck of a job.”

President George W. Bush addressing FEMA Director Michael Brown: “Brownie, you’re doing a heck of a job.”

That caught people’s attention (and became a defining quote of the President Bush’s tenure as president).  Media analysts wondered why the President would say that: Did he not know how incompetent Brown seemed to many people?  Did he know and not care?  Or did he actually want the ineffective response?  It showed a president out of touch, or worse.  This meme began to make its way across the television networks.

That night, Friday, on a live televised concert to raise funds for Katrina victims, entertainer Kanye West gave voice to the pent up frustrations of many:

“George Bush doesn’t care about black people.”

Kanye West gave voice to pent-up frustrations when he declared on live TV: “George Bush doesn’t care about black people.”

 

This changed the dynamic completely.  The next morning, six days after the flood, the President spoke to the media in front of the White House. Flanked by Defense Secretary Donald Rumsfeld, Joint Chiefs Chairman Richard Meyers, and Homeland Security Secretary Chertoff, the president acknowledged shortfalls in the federal response and committed to direct a more effective response. He said,

“Many of our citizens are simply not getting the help they need, especially in New Orleans. And that is unacceptable.”

After six days of seeming out of touch, the acknowledgement of the inadequate response seemed a heartening development. That day a larger federal presence was seen in New Orleans and President Bush ordered over 7,000 troops and an additional 10,000 National Guardsmen to the disaster area.

On the weekend talk shows, the focus shifted from why the response was inadequate to who was to blame for it.

Meet The Press host Tim Russert with Homeland Security Secretary Chertoff

Homeland Security Secretary Chertoff appeared on NBC’s Meet The Press and was questioned by host Tim Russert.  Russert asked whether Chertoff or anyone who reported to him would resign given the poor response.  He quoted the Republican senator from Louisiana, David Vitter, who gave Secretary Chertoff a grade of F.  He noted that Mitt Romney, Republican governor of Massachusetts, said that the U.S. is now an embarrassment to the world.  He then challenged Secretary Chertoff:

“Your website says that your department assumes primary responsibility for a natural disaster.  If you knew that a Hurricane Three storm was coming, why weren’t buses, trains, planes, cruise ships, trucks provided on Friday, Saturday, Sunday to evacuate people before the storm?”

Secretary Chertoff gave a response that was, at best, disingenuous. He said,

“Tim, the way that emergency operations act under the law is – the responsibility, the power, the authority to order an evacuation rests with state and local officials.”

Even if the statement were true, it was a sharp contrast from President Bush’s and FEMA Director Brown’s assurances that the federal government would do everything it could to help those affected by the storm. But as a PBS Frontline special pointed out, evacuation is a shared responsibility. The law establishing FEMA spells out:

“The functions of the Federal Emergency Management Agency include…conducting emergency operations to save lives and property through positioning emergency equipment and supplies, through evacuating potential victims, through providing food, water, shelter, and medical care to those in need, and through restoring critical public services.”

By the following Friday, 13 days after the flood, Secretary Chertoff announced that operational responsibility for the Katrina response was shifting from FEMA to the Coast Guard, and that Coast Guard Vice Admiral Thad Allen would take charge.  FEMA Director Brown resigned the following Monday.

9 Lessons for Leaders and Communicators

The Katrina anniversary is an opportunity to reflect on foundational principles of effective crisis management.  These include:

  1. Leaders are judged based on how they deal with their most difficult challenges.  Crises can literally make or break reputations.
  2. Crisis management is the management of choices – the management of decisions that leaders make when things have the potential to go very wrong.
  3. There is a rigor to effective crisis management that is equivalent to the rigor found in other business processes. But that rigor is often unknown, ignored, or misapplied by many leaders, to their own and their organizations’ misfortune.  That rigor includes a systematic way to think in a crisis.
  4. Every crisis is a business problem before it is a communication problem, and you cannot communicate your way out of a business problem. Crisis management is far more than skillful public relations. Effective crisis response consists of a carefully managed process that calibrates smart actions with smart communication: Crisis Response = Effective Action + Effective Communication.
  5. The key to making smart choices is to use the right decision criteria – the proper basis for choice. And that means asking the right question: What would reasonable people appropriately expect a responsible organization to do in this situation?
  6. Trust arises when stakeholders’ legitimate expectations are met. Trust falls when expectations are unmet.
  7. Framing decisions in light of stakeholder expectations leads to smarter choices faster, and maintains stakeholders’ trust.
  8. In a crisis, all stakeholders expect a responsible organization or leader to care.  To care that something has happened; to care that people need help; to care that something needs to be done.
  9. The single biggest predictor of loss of trust and confidence, of loss of reputation, and of financial and operational harm, is the perception that the organization or leader do not care. Effective crisis response, at a minimum, begins with a timely demonstration of caring. And it continues with a persistent demonstration that the organization and leader continue to care, for as long as the expectation of caring exists.

by Helio Fred Garcia

I’ve been in China for just over a month, the last two weeks of which were spent on book tour in connection with the publication of the Chinese edition of The Power of Communication: Skills to Build Trust, Inspire Loyalty, and Lead Effectively.

Book Tour

 

Publications - PC China Cover - 2014 Jun 12
The concepts from the book and the best practices and principles applied by Logos Institute for Crisis Management and Executive Leadership have been very well received by both academic and business audiences here.  I have spoken so far in three cities: Shanghai, Nanjing, and Tianjin.  I’m now in Beijing, and all the remaining work will be here.

By the time we’re done, I will have spoken at fifteen universities, including most of the top-10-ranked Chinese universities.  And also will have spoken at a half-dozen corporate events.

From business school deans and graduate students to newspaper editors to business executives, there has been an appetite for the best practices in crisis management and crisis communication, and also in executive leadership skills.  As China goes through extraordinary change, there is also a recognition that a management approach that promotes a culture of compliance but not of innovation may not be sustainable.  The tough migration to leadership that inspires, and to timely decision-making that maintains trust, has produced meaningful desire to get the principles right.  It is part of a larger change taking place across all elements of Chinese society.

Announcement at Nanjing University

Announcement at Nanjing University

Three universities so far have asked to discuss formalizing long-term relationships with Logos Institute, but no commitments in either direction have yet been made.

Shanghai

The tour started in Shanghai, in friendly territory: NYU Shanghai, where NYU Shanghai student and Logos colleague Evan Chethik made introductions.   The school, only in its second year, is housed in an ultra-modern building with smart classrooms, up-to-date labs, and even iPads in public areas for student use.  Their art lab has two 3-D printers.  I gave two classes, one on The Power of Communication and Leadership for the Global Liberal Studies course, and a public lecture focusing more on Power of Communication and barriers to effective audience engagement.  The students were smart, engaged, and engaging.  About half of my group were Americans visiting for a year; some were from NYU’s Abu Dhabi campus; the rest were Chinese, part of the first two classes of Chinese students to get an NYU Degree completely from NYU’s Shanghai college.

With my Logos colleague and NYU Shanghai student Evan Chethik

With my Logos colleague and NYU Shanghai student Evan Chethik

Our NYU Shanghai contact, Professor Ray Ro, is also on the faculty at Sino-British College, a consortium of University of Shanghai for Science and Technology and nine British universities.  We went there the next day.  Most of the students were Chinese, majoring in either engineering or business.  They too were quite engaged and engaging.

Teaching MBA students at Shanghai International Studies University

Teaching MBA students at Shanghai International Studies University

The same day we visited Shanghai Jiaotong University’s School of Media and Design, teaching graduate students on effective interpersonal communication.  Great students.

With Dr. Zhen Fan, Dean of the School of Business, Shanghai International Studies University

With Dr. Zhen Fan, Dean of the School of Business, Shanghai International Studies University

The next day we visited Shanghai International Studies University School of Business.  This was the first of two visits to the university, and three classes.  Here the students were getting their MBAs, some with a concentration in communication.  Most were Chinese, but there were some Americans and several Europeans.  The discussion was lively and vivid.

Teaching undergraduate business students at Shanghai International Studies University

Teaching undergraduate business students at Shanghai International Studies University

We returned to Shanghai International Studies University, to teach School of English Studies and in the undergraduate business school.

NYU MS in PR/CC Student Reunion

2014 grads of the NYU MS in PR/CC. L to R, Iris Wenting Xue, Ci Song, Judy Zhu, and Ada Yang. (I was thesis advisor to Iris and Judy)

2014 grads of the NYU MS in PR/CC. L to R, Iris Wenting Xue, Ci Song, Judy Zhu, and Ada Yang. (I was thesis advisor to Iris and Judy)

One of the highlights of the Shanghai visit was a reunion of several of my NYU MS in Public Relations and Corporate Communication students who now live and work in Shanghai.  All are working in good public relations jobs.  (A similar reunion is planned for Beijing.)

Corporate Presentations

While in Shanghai we had the opportunity to speak at three corporate events.

Shanghai Daily, the English language newspaper of Shanghai, invited me to give a luncheon workshop on crisis management to the heads of communication of about 25 multinational corporations.

Shanghai Daily StoryThe event was also attended by a number of editors and reporters from the newspaper, and officials of the Shanghai city government.

With Joyce Wu, Editor-in-Chief of Shanghai Daily, the English language newspaper of Shanghai

With Joyce Wu, Editor-in-Chief of Shanghai Daily, the English language newspaper of Shanghai

That evening we went to the headquarters office of Vanke, a the largest residential real estate developer in China.  Our evening was jointly sponsored by Vanke and Ivy League English, which hosted us several times.  The session was on strategy, leadership, and the power of communication.

The main room at Vanke, 250 people, plus 40 offices participating remotely via video hookup

The main room at Vanke, 250 people, plus 40 offices participating remotely via video hookup

In addition to the 240 people in the headquarters office, forty of Vanke’s offices throughout China also participated via video hookup.  This was the first session we held where we needed simultaneous translation into Chinese (although at all sessions, our slides were in both English and Chinese).  Ivy League English will also sponsor a similar session in Beijing.

Vanke employees at one of 40 remote locations participating in the workshop

Vanke employees at one of 40 remote locations participating in the workshop

Several days later we met at Ivy League English’s Shanghai headquarters offices for a meeting of Shanghai CSR We Can, a group of 25 heads of corporate social responsibility for major Chinese companies and for the Chinese offices of multinationals.  We spent the afternoon covering the overlap between corporate responsibility and crisis management; especially the need in each instance to take seriously stakeholder expectations and concerns.  We had lively discussion and debate.

Nanjing

We then took the bullet train to Nanjing, and spent a whirlwind 36 hours there.

That night we gave a public lecture at the Johns Hopkins University Nanjing Center, a campus of the School of Advanced International Studies.   The topic was the use of power in all forms, but especially communication as soft power, and therefore more sustainable than hard power.  The students were getting their MAs or graduate certificates in international relations and foreign policy.

The announcement at the Johns Hopkins University Nanjing Center

The announcement at the Johns Hopkins University Nanjing Center

These students, generally older and more experienced internationally than the business students I had met at other universities, had a sophisticated understanding of foreign policy, economics, and military force.  We had lively discussions of American foreign policy, framing (ISIS or ISIL?), and the limits of soft power.

Student interaction at Johns Hopkins University Nanjing Center

Student interaction at Johns Hopkins University Nanjing Center

Another unexpected delight on the trip was a surprise visit to the Johns Hopkins lecture by my former NYU PR/CC student Tao Feng.  He graduated in 2014, and now works for Burson-Marsteller in Guangzhou, China.  He happened to be in Nanjing for a client meeting, and saw the notice of the lecture on Weibo (Chinese equivalent of Twitter) and was able to get to the lecture, his boss in tow.  We shared a taxi afterward.

With Tao Feng, 2014 graduate of the NYU MS in PR/CC

With Tao Feng, 2014 graduate of the NYU MS in PR/CC

The next day we returned to downtown Nanjing to speak at a public workshop at Nanjing University on maintaining trust in a crisis.  It was a small but focused group of undergraduate, graduate, and post-doctorate students.

We spent the afternoon at a distant campus of Communication University of China, Nanjing.  The public lecture on effective leadership communication was held in the library auditorium to a standing-room only crowd.  The discussion was lively and toward the end got a bit raucous.  Or, as Dr. Shirley Tse, our host, said, the students were vivid.

Teaching at Communication University of China Nanjing

Teaching at Communication University of China Nanjing

Tianjin

After class we took the bullet train from Nanjing to Beijing, and seven hours later took the bullet commuter train the half hour (90 miles) to Tianjin, a city of 13 million known for its technology and manufacturing base.  (Logos has several large industrial clients with facilities here.)

The announcement at Tianjin University College of Management and Economics

The announcement at Tianjin University College of Management and Economics

That day we spoke at Tianjin University’s College of Management and Economics.  Tianjin University, founded in 1895, is the oldest university in China.

With Dr. Zhang Wei, Dean, College of Management and Economics, Tianjin University

With Dr. Zhang Wei, Dean, College of Management and Economics, Tianjin University

We spoke to the MBAs, Executive MBAs, and other business students on leadership and the power of communication.  The next day we were back in Tianjin to speak at Nankai University’s business school.

Teaching business students at Nankai University Business School

Teaching business students at Nankai University Business School

And then we rested.

My wife, Laurel Garcia Colvin, returned to New York Saturday, after four and a half weeks in China.  I got a three-day weekend, just ending now.

The trip has been ably assembled and managed by Logos Institute Research and China Business Development Associate Iris Wenting Xue (who also did most of the simultaneous translation, when needed). She has worked closely Beryl Young,  a manager with the book’s publisher, Publishing House of Electronics Industry.

Tomorrow the Beijing portion of the trip begins, and will last nine days.  Stay tuned…

Fred

Watchtower on the Northwest Corner of the Forbidden City, Beijing, from across the moat

Watchtower on the Northwest Corner of the Forbidden City, Beijing, from across the moat

 

 

Kristin Johnson Kristin Johnson | Bio | Posts
24 Nov 2014 | 11:20AM

August, 2011, marked nearly a year to day that I moved into a new apartment. In typical New York fashion, I hadn’t truly met my neighbors yet. Paper-thin walls gave me more than enough of a window into the world of the woman directly next door, and we had exchanged little more than first names and the requisite pleasantries whenever we bumped into one another in the hall. That particular August, however, changed that.

Crisis Community - 1 - 2014 Nov

New York City was on alarm for Hurricane Irene.

Neighborhood grocery store shelves emptied and batteries sold out everywhere as local leaders and the media heightened warnings for people to prepare for the worst. When dark came, the public transit stopped and the entire city sheltered in. Living alone at the time, and heeding the caution to stay away from the windows, my only companion and view to the outside world became my television. But I wasn’t alone in that experience.

Transfixed by reporting of wind, rain and water rising, I was startled to hear a small knock on my door. I peeked through the hole and recognized my neighbor, in her pajamas, clutching a bottle of wine in one hand and a glass in the other. She was nervous – terrified, actually – and needed company. I’m not easily distressed, but I am in the business of helping companies and leaders find calm in the proverbial storm. So during this literal storm, it was my nature to help. I invited her in, grabbed a wine glass for myself and got to the business of meeting my neighbor.

Though we never became best friends, there was a newfound security in knowing that there was someone reliable nearby. Someone had my back and I had hers. It’s important to bring humanity and humility into disaster planning. We need each other.

Crisis Community - 2 - 2014 Nov

Cities are investing in community as a disaster response tool.

It is ironic that, in the most ‘networked’ age in time we are operating more autonomous than ever. As Sherry Turkle said in a 2012 TEDTalk, we are “alone together.” But that reality presents vulnerability. Relationships and the ability to come together is an essential component of disaster preparedness, endurance and recovery.

Thursday’s Wall Street Journal highlighted that with an interesting spotlight on community resilience programs. The article, titled in the print version, “Disaster Plans Go Hyperlocal,” outlined how San Francisco is taking steps to bring cohesion to the community in order to strengthen emergency-response. This preparedness is part of a larger “100 Resilient Cities” plan started by the Rockefeller Foundation and now in 10 cities, including San Francisco. According to the Foundation:

“We can’t predict the next disruption or catastrophe. But we can control how we prepare for and respond to these challenges. We help make our cities better at adapting to the shocks and stresses of our world and transforming them into opportunities for growth.”

Crisis Community - 3 - 2014 Nov

Community can strengthen corporate crisis management, too.

Just as we need each other at the hyper-local levels in neighborhood communities, companies need to foster communities and nurture them at the local levels as well. And, while many companies have a plan in place for ensuring they are prepared to manage and recover from events and issues with the potential to negatively affect operations, finances or reputation among stakeholders – it is less common to test that plan.

Just as community can play a pivotal role in the success or vulnerability of a neighborhood’s response and recovery to an emergency, community can also carry great weight for a company to have the ability to employ a crisis response plan. Community factors that could influence the success – no matter how strong the plan – may include:

  • Do employees know one another?
  • Do employees communicate effectively with each other?
  • Do employees trust one another?
  • Do employees care about one another?
  • Do employees believe in the mission, vision, values – and leadership – of the company?

At Logos, in addition to helping clients develop plans and processes for issues that affect business, as well as issues unforeseen, we help companies test these plans to ensure that every level of the organization is in a position to deliver on roles and expectations. During these simulations, we often uncover that cultural or hyper-local considerations disrupt assumptions in the plan. That doesn’t mean that the plan has to change, but it does uncover clarity that needs to be addressed at a local, community level. It’s often a simple communication clarification that circumvents the escalation of a local issue into a full-blown corporate crisis.

While the world continues to turn and we whirl through life with our noses in devices and data, it’s important to remember that it’s connectedness – not connectivity – that we seek in the face of life’s greatest challenges. For this reason, be it neighborhood or be it corporate planning, it’s important to remember the importance of community.

Helio Fred Garcia Helio Fred Garcia | Bio | Posts
15 Oct 2014 | 10:51PM

This is my second in a series of guest blogs featuring my recently-graduated capstone (thesis) advisees in New York University’s Master’s in Public Relations and Corporate Communication.

(See my earlier post, On Wall Street, Reputation, and Recovery: Guest Blog by Julia Sahin here.)

About two weeks ago, my Logos Institute colleague colleague Adam Tiouririne posted a blog about a particular part of the discipline we use at Logos, the creation of models that help channel both experience and research into more accurate predictions about the future.

The key to the model is that it makes predictions easier.  Says Adam,

“Every business leader lives with dozens of models… or formal frameworks for how the world works.  If prices go down, demand goes up; if the distance is longer, the shipping costs are higher; if advertising is targeted, consumers are more likely to buy.  No model can ever predict every outcome, but a good one usually comes close.  The key to consistently predicting the future is to craft experience and research into a model — your very own crystal ball.”

Logos Institute - Predictive Models - 2014 SepAn effective model has explanatory power — making sense of a past event — and predictive power — predicting the likelihood of something happening in the future.  A big part of our work at Logos Institute, and in my Crisis Management and Crisis Communication teaching at NYU and other institutions, is finding models with both explanatory and predictive power.  And I often encourage my NYU Capstone students to develop such models.

This year, Iris Wenting Xue took up the challenge, developing a model that helps leaders and those who advise them to understand public apologies – how to evaluate an existing apology, and how to plan to apologize when public trust and confidence are at risk.

The whole issue of a public apology is very timely, from Captain Ron Johnson apologizing on behalf of all law enforcement following the death of Michael Brown and civil unrest in Ferguson, Missouri, to NBA Commissioner Adam Silver apologizing to professional basketball stars in the aftermath of the Donald Sterling racist audiotapes.

Iris Wenting Xue

Iris Wenting Xue

Ms. Xue is now a research associate of the Logos Institute for Crisis Management and Executive Leadership.  Her NYU capstone was titled, “A Strategic Sorry: Studies on Leaders’ Apologies Using a 10-C Checklist.”  In this work Ms. Xue joins such leaders as James Lukaszewski, whose own eight-step Lukaszewski’s Law of Trust Restoration is required reading in my courses.

Ms. Xue’s Capstone lays out a model: Ten considerations that leaders need to take seriously when they plan apologies.  Too many apologies, says Ms. Xue, are made top-of-mind, without reflecting on what both experience and research show works and doesn’t work.  Her 10-C Checklist provides clarity of criteria on framing an apology that is likely to work.  You can download her Capstone here.

The 10-C Checklist

by Iris Wenting Xue

Leaders contemplating an apology should reflect on ten considerations that can help the apology have its desired effect.

The ten considerations are:

  1. Characteristic:  What is the nature of the event that calls for an apology.  Was it intentional or accidental?  Natural or man-made?  Caused by something done that shouldn’t have been done, or something not done that should have been?  In other words, how much do we know about the thing for which we need to apologize?
  2. Consequence:  What is the nature of the harm?  How severe is it?  How widespread?  Was the harm economic loss?  Injury?  Death?  Insult?  Other?
  3. Culture: What’s the cultural context in which the harm was caused and in which the apology will be made?  Is apology expected?  Popular?  Necessary?  Is it frowned upon?   Is there a culturally-appropriate form of apology (e.g., ceremonial bow in Japan)?
  4. Channel: Where should the apology be made?  Directly to those affected?  Through the media or social media?  On video or just in writing?  In person?  All of the above?
  5. Content:  Is it clear what is being apologized for?  (E.g., what the offender did, not what the offended felt.)  Is the apology complete?  Does it explain how the event happened?  Does it ask for forgiveness?   Does it include an admission of accountability?  Does it commit to take steps to prevent a recurrence?  Does it offer restitution?
  6. Customization:  Is it a general or a customized apology? Is the content specifically tailored for the event in question and for those who need to hear it?  Or is it just a generic statement of regret?
  7.  Change:  Is the apology as drafted likely to change audiences’ attitudes towards the person apologizing, or to make matters worse?  Has the person apologizing committed to changing his or her behavior in the future?
  8. Control.  When will the apology happen?  Will it be seen to be spontaneous or forced?  Is it at offered before being demanded?  Only after demands for an apology have become public?
  9. Cause:  What will be the perceived incentive of the person apologizing?  Is it to genuinely achieve forgiveness? Or to reduce financial harm?  Or to keep one’s job that might otherwise be in jeopardy?
  10. Charisma:  Does the person apologizing enjoy good reputation? Is he or she otherwise respected and popular?  How many times has he or she had to apologize before?  Do those prior attempts make this one seem less sincere?

Reflecting on these ten considerations can help a leader, and those who advise the leader, to more likely craft an apology that will work.

In future posts I’ll share the work of other recent NYU MS in Public Relations and Corporate Communication graduates.  Stay tuned…

Adam Tiouririne Adam Tiouririne | Bio | Posts
15 Sep 2014 | 4:11PM

Half of NFL fans ended this weekend thrilled by their team’s win — myself included — but almost no fans are satisfied with the performance of the league itself. A raft of high-profile domestic violence cases has plunged America’s pastime (sorry, baseball) into crisis.

The matchup of the week: The NFL against these four principles of effective crisis management.

The NFL media-industrial-complex is so formidable that big sports broadcasters have long been accused of being “in bed with” the league. If that’s true, then they must’ve told the NFL to go sleep on the couch Sunday night.

NBC’s million-man army (okay, I only counted eleven on-air personalities) was on the march. One cringe-inducing stretch of on-field highlights included four off-field lowlights — in under two minutes.

  • Highlights from Carolina 24, Detroit 7, and the analysts mention the deactivation of Panthers defensive end Greg Hardy following a domestic violence conviction.
  • Highlights from New England 30, Minnesota 7, and we cut to the Vikings coach downplaying the child abuse indictment of superstar running back Adrian Peterson.
  • Segue to the featured game of the night, Chicago at San Francisco, with a shot of 49ers defensive end Ray McDonald, who the crew notes is suited up on the sidelines despite a pending domestic violence investigation.
  • And finally, as the program cuts to a commercial break, the hosts allude to former Baltimore running back Ray Rice’s domestic violence saga.

And that’s just one weekend. The NFL police blotter is so busy that the San Diego Union-Tribune keeps a collective rap sheet dating back to 2000. So the NFL has a serious problem with media coverage, right?

Wrong.

Every crisis is a business problem first. It’s not that NFL players are perceived as domestic abusers; it’s that they actually are being arrested for domestic violence at a shocking rate. That’s a business problem, which requires business solutions — thorough investigations, sound management, revised processes.

This NFL crisis started (publicly, anyway) when Baltimore Ravens running back Ray Rice was caught on camera this spring in Atlantic City, NJ, dragging his unconscious then-fiancée from a casino elevator. NFL Commissioner Roger Goodell delivered a two-game suspension. For the Ravens’ first two games, that’s five days, from Sunday to Thursday.

But then a new security tape emerged. In the latest graphic recording, we see Rice not just dragging his partner out of the elevator, but actually knocking her out cold. Goodell’s response: “No one in the NFL [saw the second video] to my knowledge.”

But how on Earth did a multi-billion-dollar league with a multi-million-dollar private security network get out-investigated by TMZ? That business failure has led to a devastating perception that the NFL’s investigation was anything but thorough. Take it from Chris Kristofco, writing at Titletown:

If Rice’s answers were ambiguous, and Goodell knew there was a tape out there that he hadn’t seen, how could he believe it was a thorough investigation? He didn’t. He didn’t care.

If any simple sentence structure should invoke a leader’s terror, it’s that one: “Subject negative-linking-verb care.” (See also: “BP doesn’t really care about this.” “Families feel that Hayward and BP simply didn’t care.” “BP probably doesn’t care what the Gulf Coast thinks.“)

In light of the new video, the NFL lengthened Rice’s suspension to “indefinite” and his Baltimore Ravens cut him from the team. But the uproar continues.

What should the NFL do to deal with the business problem and avoid the perception of indifference? The answer comes not from within the league, but from its stakeholders. And it’s the same answer as for any organization in crisis: What would reasonable people appropriately expect a responsible organization to do when faced with this?

That probably includes better training and support for all players to prevent domestic violence, benching for players under investigation, and far harsher penalties — lifetime bans, anyone? — for players who are convicted. To its credit, the league is already taking some of these steps.

And by the way, “this situation” also includes a pile of tax-exempt profits bigger than Vince Wilfork (above) on Thanksgiving. So people would reasonably expect a hefty investment in these domestic violence prevention efforts.

Deadspin, a leading sports website, has chronicled what it calls Goodell’s lies in the Ray Rice case. Even the more demure Washington Post is now questioning the NFL’s credibility.

It will take time — months, perhaps years, of meeting stakeholders’ reasonable expectations — to restore trust in league leadership. For the NFL and Commissioner Roger Goodell, it’s a much less festive version of Super Bowl Sunday: The lights are on, and the world is watching.

Share your thoughts here, like this post on LinkedIn, or tweet @Tiouririne.

by Helio Fred Garcia

Imagine that you’re an executive at a large company.

You learn that one of your products – a good revenue generator but not a franchise-defining product – has a customer convenience issue. It sometimes does things that annoy customers. In particular, it doesn’t do what it’s supposed to do 100 percent of the time. Several dozen customers have complained.

Given all you have on your plate, how urgent do you consider this problem? What kinds of resources do you devote to it?

Now consider a different scenario: You learn that this product has a significant safety defect. That safety defect, in turn, risk loss of life – in fact, it may already have cost some lives.

Given all you have on your plate, how urgent do you consider this problem? What kinds of resources do you devote to it?

Finally, what if the problems are one and the same? Is there a difference in your reaction to something described as a customer inconvenience compared to the same thing that’s described as a serious safety defect?

Customer Convenience v. Safety Defect

Herein lies what may finally be an explanation for the otherwise incomprehensible behavior at General Motors (GM)

images

The Power of Communication

Communication has power. But as with any powerful tool, if communication is not used effectively it can dissipate or cause self-inflicted harm.

That’s one of the lessons of the tragic events at GM that have just come to light this year.

I have taught elements of the GM Cobalt ignition switch crisis since it first became public back in the Spring.  And in all the discussions, my students and I keep coming back to the same questions: Why did GM not fix the problem when they had a chance?  Why did it take more than ten years?  Did they simply not care?  Did their cost/benefit analysis lead them to conclude that it was OK to keep an unsafe car on the road?  We’ve been baffled.

So I’ve waited with anticipation for the formal report conducted by GM’s independent law firm. That report is now out, and it is stunning. Not just for its tale of incompetence and neglect. But also for providing an intriguing clue about how this baffling series of mis-steps could have happened in the first place.

I am indebted to author and Forbes columnist Carmine Gallo for first calling attention to what I cover below. Gallo’s June 9 post focused on how two words explain the massive failures at GM and how two different words could have prevented the fiasco in the first place. It’s worth reading.

The Valukas Report

The report, prepared by former US Attorney Anton R. Valukas, the chairman of the law firm Jenner & Block, was released on May 29. In the course of 315 pages it lays out the causes and tragic consequences of GM’s failures.

Anton Valukas

Anton Valukas

Three in particular caught my eye.

  1. GM engineers failed to name the problem accurately.
  2. That’s because the engineers didn’t understand how the cars worked (!?)
  3. The engineers mis-framed the crisis and therefore it wasn’t taken seriously for more than 11 years.

Let’s take these one at a time.

1. GM engineers failed to name the problem accurately.

When the Cobalt’s ignition system switched from Run to Off or Accessory, it also turned off the electrical system.

But the engineers described it as a “moving stall” and didn’t seem to understand that the lack of electrical power meant that airbags wouldn’t deploy, with potentially catastrophic effects. So they told the media and others that a moving stall did not create a safety hazard.

From the Report:

“[T]hose individuals tasked with fixing the problem – sophisticated engineers with responsibility to provide consumers with safe and reliable automobiles – did not understand one of the most fundamental consequences of the switch failing and the car stalling: the airbags would not deploy. The failure of the switch meant that drivers were without airbag protection at the time they needed it most. This failure, combined with others documented below, led to devastating consequences: GM has identified at least 54 frontal-impact crashes, involving the deaths of more than a dozen individuals, in which the airbags did not deploy as a possible result of the faulty ignition switch.”

Chevrolet Cobalt

Chevrolet Cobalt

2. That’s because the engineers didn’t understand how the cars worked (!?)

From the Report:

“A critical factor in GM personnel’s initial delay in fixing the switch was their failure to understand, quite simply, how the car was built. GM had specifically designed the airbag system not to deploy, in most circumstances, in the event that the ignition switch was turned to Off or Accessory, a deliberate and sensible decision made to prevent passengers from being injured by airbags in parked cars.

In 2004, however, GM engineers, faced with a multitude of reports of moving stalls caused by the ignition switch, concluded that moving stalls were not safety issues because drivers could still maneuver the cars; they completely failed to understand that the movement of the switch out of the Run position meant the driver and passengers would no longer have the protection of the airbags.”

3. The engineers mis-framed the crisis and therefore it wasn’t taken seriously for more than 11 years. To me this is the most interesting.

From the Report:

“GM personnel viewed the switch problem as a “customer convenience” issue – something annoying but not particularly problematic – as opposed to the safety defect it was.

Once so defined, the switch problem received less attention, and efforts to fix it were impacted by cost considerations that would have been in immaterial had the problem been properly categorized in the first instance.”

It isn’t that GM didn’t care about safety. It did. The Report makes clear that when presented with safety problems GM acted responsibly.

From the Report:

“Indeed, in this same decade, GM issued hundreds of recalls at great expense (including at times when its financial condition was precarious) because in the great majority of instances, it correctly determined or agreed that the issues that came to its attention implicated safety and demanded prompt action. But in the case of the Cobalt, it did not do so.”

Why not? According to the Report, in 2005 a number of committees recommended a range of solutions, but they were rejected because they would be too costly. The report makes clear that such cost considerations would not have been in play if they had understood the connection between the stalls and the disabling of airbags – in other words, if they had understood the safety hazard.

Cobalt Ignition and Switch Assembly

Cobalt Ignition and Switch Assembly

 

Why didn’t GM recall Cobalt? The initial framing of the problem as a “customer convenience” problem meant it wasn’t seen as a safety concern, and therefore got a back burner.

From the Report:

“From 2004 to 2006, not one of the committees considering a fix for the switch – filled with engineers and business people whose job was to understand how GM’s cars were built and how different systems of the car interact – ever reclassified the problem from one of customer convenience to one of safety or demonstrated any sense of urgency in their efforts to fix the switch. GM’s Product Investigations group, charged with identifying and remedying safety issues, made the same mistake; it opened and closed an investigation in 2005 in the span of a month, finding no safety issue to be remedied.”

The tragedy is that the signs of a serious safety issue were there to be seen. But in the “customer convenience” frame GM engineers didn’t see it. It took people outside of GM who had not been influenced by the “customer convenience” frame to grasp the real problem.

From the Report:

“As the early committees failed to fix the problem, accidents and fatalities in which airbags did not deploy began coming to GM personnel’s attention, including GM’s in-house counsel and the engineers who worked with them. Those outside GM, including, in 2007, a trooper from the Wisconsin Safety Patrol and a research team from Indiana University, figured out the connection between the switch and the airbag non-deployment. Yet, GM personnel did not.”

The Power of Framing

According to the Berkeley cognitive linguist George Lakoff, frames are mental structures triggered by language.

George Lakoff, Cognitive Linguist, UCal Berkeley

George Lakoff, Cognitive Linguist, UCal Berkeley

When a frame is triggered, an entire worldview is triggered, and that determines the meaning of what comes next. When the frame is triggered, we tend to focus what’s within the frame, and to ignore what’s outside the frame.

And when we say something “makes sense,” we mean that something is consistent with the frame.

So when the GM engineers referred initially to a “moving stall” and called it a “customer convenience” problem, that frame determined the meaning of what followed. As a result there was no sense of urgency, so cost and other tasks took priority.

But what if the original engineers had framed the problem differently: if they had called the ignition switch problem a “safety defect”?  The reaction could have been completely different.

Urgency makes sense when grappling with a safety defect, but not necessarily when facing a customer convenience issue. Conversely, cost becomes a challenge for a customer convenience issue, but not at all when grappling with a safety defect.

Of course, there were many other challenges at GM besides this basic failure of understanding. There was compartmentalization, turf, and a culture that included the “GM Nod,” defined in the Report as “when everyone nods in agreement to a proposed plan of action, but then leaves the room and does nothing.”  There was plenty of incompetence and indifference.

Lessons for Leaders and Communicators

But at one level the Report serves as a teachable moment:

1.  How you name the problem goes a long way toward how you fix the problem.

2. Framing matters.  The frame defines what makes sense and what is possible.

3. Situational awareness isn’t just about facts; it’s about understanding significance — and that comes from frames.

 

Your comments welcome,

Fred