Presented By Terry Fahn of Sitrick And Company

Transcription

1 Presented By Terry Fahn of Sitrick And Company

2 KitchenAid recently found itself thrust into the media spotlight after an employee Tweeted an insult directed at President Obama. Although the tweet was quickly removed, the damage was done; some customers vowed to never buy KitchenAid products in the future. Social and mainstream media quickly picked up the story and it remains a hot topic in media Obamas gma [Grandmother] even knew it was going 2 b bad! She died 3 days b4 he became president. KitchenAidUSA Tweet

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4 Was the apology enough? Questions remain: Who was the employee that posted the tweet? What happened to that employee? Why did he/she post it from the KitchenAid Twitter feed? What else can KitchenAid do to move forward?

5 Modern 24 hour a day news cycle requires quick response. Having a plan in place ahead of time can have a huge impact. Hoping a situation goes away isn t usually a good strategy.

6 Lawyers, Public Relations professionals and marketing experts can all play an important role in responding to a crisis. These experts should work together to and develop a strategy. Must be careful to avoid negative unforeseen consequences

7 Every situation is unique and must be analyzed as such. Identifying and understanding the issues for each given crisis and developing and implementing the right strategic plan is a simple concept that is often overlooked Sometimes matters require a pure legal strategy, others require PR and advertising. And some matters require a combination.

8 In 2012, accused killer Luka Magnotta was prominently featured on the front page of the Montreal Gazette holding a bottle of Labatt s Blue beer. The picture, which was used in the Gazette s online coverage but not in print, was taken from Magnotta s Facebook page.

9 In order to minimize the exposure of the offending photo, a Labatt Blue representative sent a letter to the Montreal Gazette asking the paper to remove the photo from its website because the photo was highly denigrating to its brand. The newspaper refused to take down the photo on the grounds that it would not change its coverage to protect a brand. A lawyer for the company responded to the refusal by threatening to sue the newspaper. Our editorial decisions are governed by what is newsworthy and what is in the public interest and it s not dictated by commercial considerations Gazette lawyer Mark Bantey

10 Not only did Labatt Blue fail to remove the photo, it ended up drawing more attention to the matter. The ensuing controversy became a rallying cry for journalists and other critics who viewed the brand as overbearing. Within hours, the story went viral, and the subject (and the picture) became bigger news in Canada. By the end of the day, Labatt issued a statement saying that it was no longer pursuing the matter.

11 The Labatt Blue case is an example of a strategy that didn t appear to be well thought out. Threats were made without considering the media s potential negative reaction. A good crisis management plan should include an analysis of: 1. Facts 2. Objectives 3. Audiences and 4. Risks

12 In November 2009, The National Enquirer published a story claiming that famed golfer Tiger Woods had an extramarital affair with nightclub manager. Two days after the story was published, Woods was involved in a minor traffic accident. As almost everyone knows, his life and his brand would never be the same. Tiger Woods approach to the resulting news coverage was to try to either avoid it or to attack it for being unfair. By employing this strategy, Tiger Woods failed to take control of the story early on and allowed others to define him and his brand.

13 Tiger Woods failed to provide a detailed explanation immediately after the initial accident. This left a vacuum of information that led to rampant speculation. The first statement issued on behalf Tiger Woods posted to his website the next day and was vague and contained few details. Many unanswered questions. Rumors abounded. As you all know, I had a single-car accident earlier this week, and sustained some injuries. I have some cuts, bruising and right now I'm pretty sore. This situation is my fault, and it's obviously embarrassing to my family and me. I'm human and I'm not perfect. I will certainly make sure this doesn't happen again. This is a private matter and I want to keep it that way. Although I understand there is curiosity, the many false, unfounded and malicious rumors that are currently circulating about my family and me are irresponsible. The only person responsible for the accident is me. My wife, Elin, acted courageously when she saw I was hurt and in trouble. She was the first person to help me. Any other assertion is absolutely false. This incident has been stressful and very difficult for Elin, our family and me. I appreciate all the concern and well wishes that we have received. But, I would also ask for some understanding that my family and I deserve some privacy no matter how intrusive some people can be. November 29, 2009 statement posted on TigerWoods.com

14 Because Tiger Woods refused to address the incident with any specificity, the news media was compelled to go elsewhere to report the story. In this case, that meant finding and talking to his alleged mistresses.

15 Tiger Woods was eventually forced to address the media. In true Tiger Woods fashion, he read a highly defensive televised statement, that his team represented to the world as a press conference. The press conference, which was nothing more than a videotaped statement, was heavily criticized because it was tightly controlled and no questions were allowed. Although it was a start at doing damage control, many commentators viewed it as being too little, too late.

16 In the days and months following Woods' admission of infidelity, several of his major sponsors ended their relationships with him, while others suspended advertising featuring Woods. Although certain sponsors such as Nike and Electronic Arts continued to support Woods, he still has not come back to his previous dominance both on and off the golf course.

17 What might have happened if Tiger Woods admitted his mistakes early on and asked for forgiveness from the very beginning? If he told his story would the news media have sought out his numerous mistresses and go into all the sordid details? Would it have been old news or bad form for mainstream news outlets to keep piling on? We will never know, but there are numerous examples of other brands who have successfully navigated a crisis by owning their mistakes.

18 We live in a generally forgiving society. Acknowledging mistakes and owning up to them, however difficult, usually goes a long way in helping move past a crisis. If you know you are wrong, it is almost always best to admit it and not try to hide from the consequences.

19 Understanding and properly managing the news media is critical. Managing the news media in a crisis situation is different than typical branding or public relations. Many people with little or no crisis management experience think they know how the media works and that they can effectively manage a crisis without consulting experts. This is a huge mistake that can make matters worse, as was seen with Tiger Woods. It also happened with tragic consequences at Penn State during the Sandusky scandal.

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21 The story of Penn State s unprecedented crisis is well known, the mistakes made by Penn State leaders in the weeks before the crisis became public are not. The Freeh Report, which was an investigation commissioned by the Penn State board into the Sandusky matter, provides an inside glimpse of what happened. According to the Freeh Report, Penn State leaders conspired to conceal Sandusky s crimes in order to avoid the consequences of bad publicity. Instead of avoiding bad publicity, Penn State s ill-conceived strategy led to a perceived cover-up and even worse publicity. It is obvious that the Penn State scandal could have been handled more effectively by employing basic crisis management principles.

22 As noted in a July 2012 article in Forbes, Penn State followed an all-too-predictable pattern in crisis situations: significant breakdowns in leadership that created an environment where (1) ethical lapses and misconduct can occur, (2) red flags are ignored, and (3) problems, once they come to light, are mismanaged. From a public relations standpoint Penn State leaders were not prepared for the looming crisis. The school did not have a crisis management plan in place and the leadership team did not know how to respond when the media started looking into the story. Even without a contingency plan in place, former Penn State leaders had numerous opportunities to get in front of the story by taking action. Instead, they did the opposite. Conway-Hatcher, Amy; Salpeter, Alan and and Jaeger, Greg. "Why the Penn State Scandal Happened -- and How to Keep Other Scandals From Happening." Forbes. Forbes Magazine, 20 July Web. 23 July

23 The Sandusky scandal first became public in March 2011 when Sara Ganim, a local crime reporter for The Patriot-News, broke the story that Sandusky was the subject of a grand jury investigation for sexually abusing young boys. Once that story broke Penn State became the subject of international media scrutiny and public scorn. Penn State leaders knew the story was coming six months before it was published because Ganim contacted Penn State President Graham Spanier about the Grand Jury investigation. Instead of using that knowledge as an opportunity to try to take some control over the developing scandal, Spanier and other Penn State leaders made the decision to try to evade the media in the hope that the story would just go away.

24 The Sandusky case was going to become public; it was just a matter of time. Hoping it would go away was not a reasonable strategy. It appears that Penn State leaders either did not know that they could employ strategies to take control of the looming crisis, or were afraid to employ them.

25 By getting ahead of the news, a company, individual or brand can maintain some semblance of control by helping to shape the story. The first major story invariably sets the tone for the coverage that follows, presenting a basic factual scenario, which is likely to be repeated in all subsequent stories.

26 Taking control of a crisis event and related news coverage can be a crucial element for managing a crisis. Changing the narrative from what went wrong to what is being done to fix it can be incredibly powerful. Shape the story from what happened to what is being done.

27 In 2009, the Arizona Republic broke a story that Fiesta Bowl employees made illegal campaign contributions to politicians friendly to the Fiesta Bowl. John Junker, the longtime CEO denied the allegations and attacked the credibility of the story. When the issue wouldn t go away Junker and one of the lobbyists accused of being involved with the scheme engaged in certain activities that some have characterized as a cover-up, including a so-called independent investigation. The Fiesta Bowl Board of Directors was initially unaware of the true nature of what was happening and publicly supported Junker. That all changed when Duane Woods, Chairman of the Fiesta Bowl Board of Directors, got wind of what was really going on.

28 As soon as he received credible evidence of wrongdoing and a cover-up, Duane Woods and the Fiesta Bowl Board of Directors took important and decisive steps to confront the crisis. 1. Established an independent Special Committee, which consisted of two well-respected board members and a former Chief Justice of the Arizona Supreme Court, to investigate. 2. The Special Committee hired its own separate law firm, notified employees they should preserve documents, suspended individuals who refused to cooperate, and informed employees about the retention of counsel and payment of attorney s fees because of the many inherent conflicts of interest. 3. The Fiesta Bowl also retained a completely different attorney not affiliated with the Special Committee s counsel because its previous general counsel was potentially implicated in the wrongdoing. 4. The Board of Directors retained a crisis management firm to develop and help implement strategies for announcing the results of the Special Committee investigation.

29 The theme of the Fiesta Bowl s communications strategy was reveal and reform. As part of that strategy, the Fiesta Bowl developed an integrated communications to tell a story of recognition and redemption; that in response to the crisis the Fiesta Bowl had one of two choices: (1) get everything out in the open and to begin the process of reformation and rehabilitation, or (2) attempt to conceal and cover up what occurred and continue misleading the public. The Fiesta Bowl made it clear that there was no middle ground between the two strategies.

30 Interfacing with Craig Harris, the Arizona Republic reporter who broke the original story was an important element of the plan. The relationship with Harris needed to be rehabilitated because Harris did not trust the Fiesta Bowl. To rebuild the trust, the Fiesta Bowl and its advisors held off-the-record meetings with Harris and his editors to apologize for what had happened and to explain the steps being taken to reveal the wrongdoing and to reform the organization. Fiesta Bowl representatives then worked closely with Harris prior to the release of the report to help him to completely and accurately report the story and convince him that the reveal and reform narrative was indeed the truth. These efforts allowed the Arizona Republic to break the story about the results of the special investigation and the Fiesta Bowl s reveal and reform efforts.

31 In order to make this strategy work, Fiesta Bowl representatives had to convince its most important audiences -- the news media, state and federal agencies, corporate sponsors, the BCS, the NCAA, major conferences and universities -- that it had fully embraced reveal and reform approach. It was crucial for the Fiesta Bowl to proactively communicate with its key constituents about the results of the investigation before it was released to the public. There was a significant risk that the results would be leaked so a plan was created to mitigate this risk. Notwithstanding the risk, Fiesta Bowl representatives was able to communicate the reveal and reform story clearly and effectively to its various audiences by traveling around the country to share the story in person, via telephone, and other means.

32 Although it was a painful and bumpy road, the Fiesta Bowl has largely put the scandal behind it. John Junker and other former executives, who were terminated or forced to resign as a result of the scandal, have plead guilty to state charges. The Fiesta Bowl as organization, which was never charged with wrongdoing, continues its role within the BCS and last year successfully hosted Stanford and Oklahoma State, in what was one of the most excited bowl games of the year.

33 When confronted with a crisis it is crucial for brand representatives to consider all of the facts and issues before implementing a strategy. It is important to tell your side of the story as soon as possible to try to take control of the narrative. Acknowledging mistakes and taking remedial action is a better strategy than trying to hide from the consequences of a misdeed.