It's time to stop repeating the same mistakes when it comes to crisis management. It's also time to recognize the CMO's role in negotiating crises. Aas social media has enabled consumers to more actively participate in brands, the CMO arguably now has an even greater role to play in activating customer support or other mechanisms necessary at a time of crisis. That's because CMOs are more in tune with consumers; they are using social-media tools to interact with them, and they can harness those tools in a time of crisis, turning those most loyal consumers into brand ambassadors.
Here, then, are the four cardinal rules organizations must adhere to when protecting their brands -- rules CMOs can and should help deploy though PR and marketing.
1. Expect the best; plan for the worst.
When crisis strikes, news and social media burst and formal statements are rendered useless. Stocks don't have a memory-recall button, but the public do. The problem isn't resources; it's about managing the crisis with a can-do culture and strong values of trust. Many claim it, but few deliver: Johnson & Johnson's $100 million rapid response to the storied contaminated Tylenol crisis in 1982 prepared J&J for the acetaminophen overdosing debacle this year, but (what) did we learn?
Failing to prepare is preparing to fail. Capt. Chesley Sullenberger's preparedness for the "Miracle on the Hudson" was a far cry from the sludge bank of stoic corporate puff supplied in the (delayed) response of US Airways CEO Doug Parker. The same rang true for Merck's smoking gun with Vioxx that demonstrated how much the company's leadership was in disarray. Merck communicated greater interest in maintaining their $2.5 billion brand than their vision "to preserve and improve human life." Their disdain for the facts resulted in them taking four weeks to withdraw Vioxx.
Consumers may be forgiving, but a crisis can cost a brand's reputation in a single battering.
2. Decentralize decision-making.
Crises are too quick for lengthy procedures; you can't be fearful and hide in bureaucracy. Mississippi Power's success in restoring power in 12 days in the aftermath of Hurricane Katrina was the result of 20 "storm directors" with crystal-clear assignments and a phone directory of people who could get things done. As Storm Director Robert Powell said, "If you don't know what you're supposed to do, the manual is not going to help you now."
Mattel had experienced 28 product recalls prior to its lead-paint scare in 2007. When that news broke, a team of 16 opened all lines of communication with 300 media channels, and its CEO, Robert Eckert, made 14 TV appearances and 20 calls to journalists in one day -- a model for decentralized decision-making. A similarly integrated, multiplatform response strategy resulted in favorable customer opinion to Nestlé's immediate action to withdraw its Toll House cookie-dough brand this summer.
The Fortune 100 favor Twitter as a key communication tool, according to a study by Burson Marsteller. As social media becomes ubiquitous and customers participate more, the role of the CMO is crucial in crisis, as they're able to inculcate social media to empower customers to play a key role. Take Southwest Airlines, for example, which this summer immediately posted updates on Twitter as a damaged plane landed, illustrating the ability to handle the urgency of crisis communication.
3. Respond boldly.
Marshalling a crisis team and a response plan are critical, including weighing the need for autonomy over the preferred unified leadership approach. Citigroup was the largest U.S. bank prior to the meltdown, and its fall from grace was accelerated by Director Robert Rubin's "probabilistic" approach to decision-making that clearly misrepresented the severity of Citi's exposure to the crisis that broke the brand and the bank.
Rest assured, when you need an ambitious, audacious and imaginative response, being forced on ineffective policies by some species of corporate bureaucrat creates a morass. During Katrina, with the cash economy broken, Mississippi Power's head of marketing helped instigate a bartering system: electricity for fuel supplies with Chevron, consequently supplying the Eastern United States and Gulf coast with fuel. Evidently, the more you want to achieve, the more you achieve.
4. Check, test, check, test.
Brand integrity is compromised through fear. Studies show that companies that handled a catastrophe well have recovered and even exceeded pre-catastrophe stock price.
In a crisis, fear is often the company's first reaction and it culminates in either a lack of compassion and/or stubborn refusal of the facts. Firestone tire treads were causing fatal crashes on the Ford Explorer, but customers were blamed first for overinflating the tires, then both brands publicly defenestrated each other for faulty designs and concomitantly fell into silence until dragged before Congress. Propitiously, Ford employees are currently being trained on how to better present the company via the use of Twitter to interact with customers.
Bad news is good news to the prepared. When you need to be big, strong and fast and mobilize a massive, sweeping redistribution of information to the public, hide nothing and tell all.
|ABOUT THE AUTHOR|
Dean Crutchfield is a brand consultant. He was senior VP-marketing at Wolff Olins from 2002 to 2008. Previously, he worked at brand businesses including Landor, Michael Peters and Luxon Carra.