Archive for 'Crisis & Issues Management'

Toyota is curiously sitting at no. 7 in Millward Brown’s top-10 list of most trusted brands as Congress spent the better half of the week giving Toyota a tongue-lashing for its handling and mishandling of the automaker’s quality control crisis.

The study’s authors readily point out that the data was collected over the course of 2009 and doesn’t reflect Toyota’s current dilemma as it unfurled at the beginning of this year.  The authors also note the automaker could learn from Tylenol, which in 1982 recalled 31 million bottles of pills after seven people were killed in the tampering scare.  That brand, which was forced to recall children’s liquid medicine last year, sits at no. 6 in the study.

Tylenol maker Johnson & Johnson has a history of effectively managing crisis situations, though the FDA earlier this year ridiculed the company for being slow to respond in its most recent crisis.  What this goes to show you, however, is a history of doing the right thing and acting aggressively in a crisis situation can maintain and build trust among stakeholders, consumers in particular.  Trust is fragile, and how you respond in a crisis situation can build and maintain trust, the authors state.

Toyota started off this week with public apologies before Congress.  How it fixes its problems, communicates with stakeholders and develops systems to prevent further lapses will determine if the automaker regains or builds trust, and where it will stand in next year’s report.

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The ongoing public discussion about sustainability tends to make agriculture wrong unless its local or small farms, but the reality is feeding our communities, whether they be next door or around the world, lies with responsible food-production systems that produce all kinds of foods on all sizes of farms.

Some deplorable U.S. hunger statistics were published a couple of weeks ago in the Institute of Food Technologists newsletter.  A study from Feeding America, the nation’s largest domestic hunger relief group, reports more than 37 million people – one in eight Americans – receive emergency food annually. This is an increase of 46% over a 2006 study. Hunger in America 2010 is the first research study to capture the significant connection between the recent economic downturn and an increased need for emergency food assistance.

Couple this with estimates that the world will need 100% more food than currently produced to feed increases in world population by year 2050 and you see a daunting challenge in need of new and innovative solutions. The need to merge feeding objectives with increased productivity, poverty reduction and sustainability is surfacing in multiple professional forums around the world.  It’s a movement long overdue.

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The Wall Street Journal published an article last month focusing on trends in strategic planning that suggested the tactic is losing favor among today’s executives, who are opting for a more flexible approach to deal with the ever-fluctuating economy.

So, are we witnessing the death of strategic planning? Actually, it’s quite the opposite. Businesses and professionals that effectively use strategic planning to help achieve their future vision and long-term goals are constantly revisiting their plans – quarterly, monthly, sometimes even weekly – to evaluate their performance in the short term. Strategic plans were never designed to sit on a shelf and collect dust, but instead are a tool by which executives can weigh day-to-day decisions to ensure the business stays on track toward achieving it’s vision for the future.

In any industry, there will be variables that impact business – market fluctuations, shifts in industry, consumer perception, crisis situations – but planning for these changes and weighing the organization’s reaction to these variables against a solid strategic plan will help the business come out of volatile times even stronger.

For a blessing-in-disguise view on the situation, one could argue that the panic, which is causing businesses to focus on being flexible and shift to accommodate marketplace changes, is actually helping these organizations get back to the core purpose of their strategic plans – to provide direction in uncertain times.

So rather than predict demise for strategic planning as we know it, I’d like to think the recently economic uncertainty has actually infused the process with a renewed sense of life. Let’s reserve the feelings of bereavement for those organizations without a strategic plan, as they’ll quickly discover that without direction, you’re going nowhere – fast.

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Driving any highway or back road, you can barely miss a Toyota.  The brand is an automaker’s version of the six degrees of separation.  Wherever you turn, you see one, or you know someone who has one or know someone who knows someone who drives a Toyota.  Quality was the axis of its brand.  I had a Camry a few years ago; loved it and wish I got another after wrapping my front end around the rear of an F-150 (even the best-made car won’t hold up to a monster truck).

Expectations were high when word got out that Toyota had a problem. Surely, a company that built a brand and a massive following of consumers into the world-leading automaker would do the right thing: Aggressively address the issue head-on, right its wrong, profess mea culpa and produce a solution.

And that’s precisely what Toyota did this week.  Problem is, Toyota’s crisis began to unfold last fall, and when the automaker unfurled its media-mix campaign this week, including plopping U.S. honcho Jim Lentz in network studios, critics attacked – and rightly so.

Toyota succumbed to the growing media and governmental pressure too late.  The automaker, and this isn’t backseat driving, knew well enough and long ago it had a problem that would only get worse.  Instead of being proactive, Toyota chose to stick its head in the sand.  That right there can tarnish any brand.

The very premise of issue and crisis management is prevention – not just stopping the headlines or social media storm, but anticipating internal and external threats or vulnerabilities and shoring up those gaps at the operational level.  It’s spending painstaking hours in the C-level suite agonizing over what gives the CEO insomnia and working with the senior management team on systems and protocols, and collaborating with industry, academia, vendors, suppliers and any other party in the supply chain.  It’s putting procedures in place to minimize the likelihood of disruption in business.

The automaker had to have had a crisis plan in someone’s filing cabinet.  Instead, millions of Toyotas are sitting idle in sales lots; even more consumers are now questioning the company’s mettle.

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The annual Edelman Trust Barometer shows modest gains among three-quarters of the industries monitored, and findings point to these institutions doing the right thing and a level of increased transparency amidst a perilous global economy.  What’s more interesting, however, is an expectation that governments and companies will revert back to old habits.  That only tells us these gains are fragile and there’s a likelihood for future Barometer reports to highlight declining trust and expectations.

What better time is there to further build relationships and credibility than when trust is climbing?  Smart institutions will invest emotionally and intellectually by working with their stakeholders in identifying what stakes in the ground their trust is rooted in, tap into those beliefs and build upon them.  Doing so, these institutions could emerge from this recession not only stronger, but also with a competitive advantage – stakeholders in their camps.

The report also lays out a suggested path in building trust – a mosaic.  In short, it’s actively involving and engaging a network of stakeholders, including NGOs, to affect change within your organization and industry.  The concept isn’t so new.  Conceptually, it’s much like the coalition building model many of us toy with, yet primarily in issue and crisis management situations.  What the report is suggesting, and it makes perfect sense, is deploying this model as an everyday, long-term business principal, not for short-term objectives and means.

The report also seems to paint a picture of traditional media being left out of the loop in this mosaic.  Traditional media, unsurprisingly, continues to witness declines in trust, giving organizations more reason to question traditional media’s necessity.  Smart traditional media companies, however, would be wise to heed to the report’s call to get closer to stakeholders.  Even smarter ones will make drastic changes in their business model – and that’s not figuring whether a paywall for online content makes sense.  It’s about delivering upon expectations.  Right now, according to the report, that isn’t much.

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A major fundraising milestone was set this past week, as the American Red Cross Mobile Giving Campaign for Haiti has raised more than $21 million in text-based donations in less than one week. A landmark campaign, not only because of its creative use of America’s growing obsession with text messaging, but also because the organization used its established presence on social networks, such as Facebook and Twitter, to kick-off the fundraising effort, which quickly “went viral.”

To help the victim’s of the earthquake, you can make a $10 donation to the American Red Cross by texting the word “HAITI” to 90999.

To help the victims of Haiti's recent earthquake, you can make a $10 donation to the American Red Cross by texting the word “HAITI” to 90999.

As our hyper-connected society becomes more comfortable communicating through devices and social networks than via phone or face-to-face interactions, this social media/technology campaign makes it easy for consumers to become donors by breaking down common barriers to participation. It uses a format that Americans are closely familiar with, and requests a relatively reasonable donation (a comfortable $10 for those still feeling the effects of the recession) without having to pick-up the phone or find an Internet connection.

As NST’s Director of Social Media Teresa Siles mentioned in a News and Smart Talk blog post in July:

Digital trends expert Steve Rubel has said, “An entire generation is growing up that will never dial a 1-800 number to reach customer care.”

And while Rubel’s comments focused on customer service, the same concept can be applied to picking up a phone, or logging on to a computer to make a donation.

Kudos to the American Red Cross, who despite being a nearly 130 year-old institution, has kept up with America’s changing habits to execute one of the most successful social media fundraising campaigns for a nonprofit organization in recent history. The Red Cross’ success has already spurred some imitators, and is sure to inspire nonprofit fundraisers throughout the country to start incorporating more technology and social media as fundraising tools.

Will it work for every nonprofit organization? No. But it’s a great testament to the power of blending social media and technology, and understanding the barriers to getting your key audiences to take action to help those in need.

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Next up in the Tiger Woods pandemonium is the privacy debate.  Did a man in the public eye get stripped of his privacy by being forced to reveal his “transgressions?”

Let others take chip shots at that.  Instead, Tiger Woods the brand lost any privacy when he carved an image that personified high family and moral values.  Since his junior golf days, he, his family and his handlers meticulously crafted a brand of integrity, dignity, determination, competitive fire and loyalty.  His charitable endeavors and commercial endorsements further exemplified the Tiger Woods brand.

Successful brands reflect character – who you are and what you stand for, and clarifying that character is paramount.  It’s the centerpiece of an authentic and transparent brand proposition.  The Tiger Woods brand consistently delivered on its expectations on and off the golf course.  The brand experience was highly attractive to be repeated by fans, endorsers, news media and even his competitive foes, all telling of great stories and experiences with anything Tiger Woods.  Like any great brand, it’s more about what people say after you’ve left the room than what you say about yourself, and the Tiger Woods brand was molded perfectly to suit that.

But then the mold began to crack around Thanksgiving. It happens.  No brand will last without error, especially one that is human.  The smart brands, or at least those with smart handlers, realize that and are equipped to address any fissure in the brand – quickly. That’s where the crack in the Tiger Woods brand began to widen.  Rather than address any issues head on – the late, great golf teacher Harvey Penick always extolled “take dead aim” – the Tiger Woods brand went into bunker mode.  Control of the brand was lost – others filled the void while the brand was mum – and it was exacerbated by a refusal to talk with cops on three different occasions and apparent denials about extra-marital affairs.

And then the skeletons started coming out of the closet.  Instead of a New York City nightclub promoter, and we may hear more on that down the road, we’re hearing about hook-ups with a reality TV star and a Las Vegas nightclub marketing manager.

A brand is also your every action and deed, including inaction in a crisis situation.  The Tiger Woods brand ceded control; it can be regained, but it will be the longest tee shot in the man’s career.

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Observations from the world’s largest fresh produce stand – PMA Fresh Summit:

Packed Floor
Reports from the floor indicate this year’s trade show was the association’s largest in its 60-year history with more than 20,000 attendees.  Some think it’s an indicator of an economy on the rebound, considering the expense for scores of marketers and sales folks to set up shop on the trade show floor.  Add to that the costs of the customer dinners, lunches and receptions, and from the looks of the morning hangovers (I’m fighting a combo sinus infection and allergy attack, so my consumption was a two-beer max), there were plenty of good times and cash flowing.

The prevailing theory, however, is consumers are turning to fresh produce more often in this economy – choosing to dine at home and forego family dinners out on the town.  Couple that with the national dialogue on health and swine flu scares, it’s more likely consumers are taking the bounty of fresh produce health benefits to their own kitchens and dinner tables.

Food Safety
Food safety was the dominant discussion on the floor and even outside the Anaheim Convention Center.  The fresh produce industry is well known for its very high self-regulation of an unregulated industry.  The challenge is our political administration is under the gun from various interest groups to establish standards and policies on an industry the administration has very little knowledge of.  What’s more, those on the floor say, it’s highly likely the administration will push down standards and policies with little regard for what the industry, grocery retailers and foodservice operators have done together to affect change.  Fortunately, leaders of the three channels have spent ample time in D.C. trying to bring our elected officials up to speed.

Social Media
Given all the talk and lightening-speed momentum in social media over the past year, it was astonishing to see what little (emphasis on minuscule) has taken hold in the fresh produce industry.  There were exorbitant amounts of discussions and displays about engaging with consumers, but you have to wonder if the industry is still grappling with what social media is and how it can bring consumer engagement to the next level – well beyond the product giveaways and numbers of friends/followers and the like.  The industry is missing a phenomenal opportunity in building true relationships and loyalty with consumers and in creating ROI for their customers.  It all hinges on strategy.

NST Cited in State of the Industry
Nuffer, Smith, Tucker’s Food Foresight trends anticipation collaboration with California Institute of Food and Agricultural Research at University of California, Davis was cited by PMA CEO Bryan Silbermann in his state-of-the-industry address Saturday morning. PMA is a long-time partner and client with NST. Earlier this year, the firm helped PMA design and facilitate a foodservice think tank with the National Restaurant Association and International Foodservice Distributors Association. The event, sponsored by Markon Cooperative, another NST client, brought together leaders from foodservice chains, distributor companies and produce suppliers together to identify collaborative opportunities for increasing produce usage at foodservice. The group put forth a plan to double usage of fresh produce in foodservice by 2020.

Great Food
I’m woefully inept when it comes to cooking with fresh produce.  The sights and smells of the fresh produce, and the amazing cooking demonstrations, kept me starving for hours on end.  Each year, I make a pledge to eat more produce, and today for lunch I had two burgers from the fast food joint down the street.  But I do have my sights set on making a mean stir fry this weekend.

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The Imperative Need to Write Well

Author: Mike Rose - September 3, 2009

TechCrunch, in its soap opera about the PR profession, finally made a valuable and worthwhile point: Our writing, collective as an industry, stinks.  I hate to admit it, but author Robin Wauters got it right in a rant about 10 Words I Would Love To See Banned From Press Releases.

Robin is dead-on accurate. Seeing those words in news releases is better at inducing vomiting than ipecac.  Are we lazy and leech onto the lowest hanging fruit when banging away at our keyboards?  Are we choosing sizzle over substance?  I know I’ve heard time and again until my ears bleed about what “sounds good.”  It might be fancy and sound or look good, but realistically we look like foolish grade-school writers and, worse yet, we embarrass our clients.  Every organization wants to talk about “quality” products or services, or “leadership” in a category or on an issue.  But are we clearly differentiating them from the competition?  If we can’t clearly define and back up what we’re writing, thus demonstrating a competitive advantage, then it’s just puffery falling on deaf ears.

Most of all, I suspect, is speed.  The 24/7 information cycle forces many of us to crank out material with little forethought on what we’re trying to accomplish.  Time is of the essence, but at the risk of clear, compelling and informative writing.

Here are the other culprits:

Colleges and universities: Classic liberal arts training, where writing well matters, is disappearing, and we’re getting a young workforce that literally struggles writing something as simple as a new product announcement or new hire release.  Not only are they challenged with how to write the release, but, moreover, with basic sentence structure, grammar and punctuation.  Yes, all you new grads out there will be peeved at me, but it’s true.  Many of us old folks in the profession lament about the quality of writing new grads have, but if you’re dedicated to writing well and are lucky enough to land a job at a place that has the same view, you’ll do just fine – just be prepared for some mentoring.

Social media:  Yes, I said it, social media is destroying the very essence of communication – human interaction, clear and skillful communication and, for *#&(@ sakes, good writing!  It seems to be more about getting information out fast and sacrificing proper grammar and excellence in writing.

PR Industry: Every firm or in-house communications department should ensure they at least have one resident word nerd on the team.  In our shop, all new hires – regardless of their level of experience – go through a lengthy writing program, and every product we produce goes through an arduous QC protocol.  What’s more, we all should follow the basic tenets of communication writing:
•    Identify a need, concern or interest
•    Present a desired behavior as a solution
•    Show the benefits of action and the consequences of inaction
•    Give your reader some rehearsal steps

Spell check: Just ban it, write and edit slowly, and pick up a dictionary.

Millenials: How can we xpct dem 2 care abt ritin good in 140 chrctrs or <?

Consider this:

Words are, of course, the most powerful drug used by mankind. – Rudyard Kipling

Most writers enjoy two periods of happiness – when a glorious idea comes to mind and, secondly, when a last page has been written and you haven’t had time to know how much better it ought to be. – J.B. Priestley

In many ways writing is the act of saying I, of imposing oneself upon other people, of saying listen to me, see it my way, change your mind. – Joan Didion

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“Increased government oversight” isn’t a phrase that many individuals are likely to be in support of these days, but the new proposed revisions to the Federal Trade Commission’s advertising guidelines may not be such a bad thing.

As consumers experience an erosion of trust in traditional information sources – including corporate America, media, government organizations, etc. – many are turning to their own personal networks (virtual or otherwise) to obtain the information they seek. We’ve seen this firsthand with the rise in popularity of sites like Facebook, Yelp, TripAdvisor, Amazon, Twitter and other social platforms that allow consumers to share information with people they trust.

In the virtual world, knowing who you can trust is a difficult task, and the Federal Trade Commission’s lawyers have drafted up some new guidelines for the online world, including blogs, product reviews and discussion boards (as well as some offline marketing tactics such as street teams that have surfaced since the guidelines were created in 1980) that are intended to help protect consumers from being misled by less-than-transparent sources.

The Federal Trade Commission, which among other tasks helps protect consumers from false claims in advertising, is set to vote on the revisions to the Guides Concerning the Use of Endorsements and Testimonials in Advertising (PDF) this fall to include regulations for these new types of media and marketing tactics.

In essence, the new guidelines would require posters to disclose any paid relationships “between the endorser and the advertiser” and could hold both the endorser and the advertiser legally responsible for any false claims. In addition to blogs, the recommended revisions also target discussion boards, such as product review sections.

A recent example of these misleading tactics was perpetrated by Lifestyle Lift, a cosmetic surgery company in New York, which asked employees to pose as customers and write positive reviews about its procedures on various sites. The company also created a number of sites that appeared to be independent on which they posted additional fake reviews. After an investigation by the New York Attorney General, the company reached a settlement of $300,000.

Transparency is a practice reputable public relations practitioners have been preaching for decades, as we know that being honest and forthright with our actions helps us to build back that eroding trust among our key stakeholders.

While the FTC agrees the new guidelines will be difficult to police, some in the blogging community are screaming “Big Brother,” and are anxious to see how government oversight, and potential investigations, may impact the free flow of information on the blogosphere. The FTC has stated it doesn’t intend to troll the Internet searching for violators and admitted that investigation of this nature will “be most likely because its an outgrowth of some other kind of investigation.”

So whether or not you’re in support of having the government regulate yet another faction of our lives, I think all Internet users, particularly marketing and PR professionals, can agree that a more authentic, honest exchange of information will be an overall improvement.

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