‘Gradualism’ usually the wrong course in crisis

Human nature inclines us to use minimal fixes to problems and hope they go away.

In crisis management, this is called gradualism and it’s often a really bad idea.

Let’s say your roof leaks during a rain storm. You just bought a new dryer, the kids need clothes for school and the car’s coming up on 100,000 miles. You’d like to get a whole new roof, but that costs $25,000 you don’t have. So you and your best friend not afraid of heights get up on the roof, tear off a few tiles, swab a lot of tar around and hope for the best.

This is gradualism. And as Louis Capozzi writes in PRWeek, it was a poor choice of strategy for Wells Fargo in recent weeks.

When the Wells Fargo board clawed back $41 million from former CEO John Stumpf’s compensation, they took an approach some observers call “gradualism” – taking as little action as possible until there’s pressure for more.

But the response proved ineffective, and after a couple of painful weeks, he “stepped down.”

Image result for Wells Fargo Stumpf Warren

Stumpf and Wells Fargo went up against Sen. Elizabeth Warren and the Senate Banking Committee and came away bloodied and bruised. Little Stumpf said that day, and subsequently to a House subcommittee, “patched the roof.” The dining room still got soaked and the pressure remained, until Stumpf finally quit in humiliation.

This is why it’s often a good strategy in a crisis to take all your hits at once, sincerely apologize for bad behavior and, if necessary, resign, or fire the people who screwed up. In Wells Fargo’s case, it tried to do the least possible, by firing 5,000 mid- to low-level employees. That wasn’t going to satisfy those hunted for heads at the top.

As Capozzi writes:

When responding to a crisis, companies need to satisfy a wide range of audiences – regulators, legislators, shareholders, customers, employees, even the general public. It’s a tough job, but research shows that companies that do it well minimize the impact of the crisis on the organization’s reputation, its stock price, and the bottom line.

The basic rules of crisis response are simple: say you’re sorry, fix it, and don’t do it again. To fix it, and ensure no recurrence, corporate boards often face the ultimate question: should they fire the CEO? Many have faced the axe. United’s Jeff Smisek and Priceline’s Darren Huston are recent examples.

If you try to fake it, come across as doing the minimum, scapegoating people who didn’t have a hand in the decisions that caused the crisis, you’re going to pay. Stumpf paid with his job. Wells Fargo paid with its reputation.

The content of this blog is about crisis management and mismanagement in a digital age. It originates with Steve Bell, who spent 30 years as a journalist for the Associated Press and in four top editor positions at The Buffalo News. He is now Partner/Director of Public Affairs and Crisis and Reputation Management at Eric Mower + Associates, one of the nation’s largest independent advertising, integrated marketing and public relations agencies, with eight offices in the East. Learn more about EMA at mowerpr.com/crisisready. Steve’s blog is based on his own opinions and does not represent the views or positions of Eric Mower + Associates.

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Self-inflicted crisis usually avoidable, though toxic

The worst sort of crisis is one that you or one of your employees generates through bad judgment, ignorance or laziness.

We have a classic one today, one that could destroy a company. It’s all over social media in the form of a Texas mattress store’s Facebook ad. It’s almost too painful to watch. It ties itself to 9/11 and the falling twin towers. Watch if you must, but you get the gist.

The ad only runs for 22 seconds, mercifully, and is amateurish at best. But it’s fatal.

To its credit, the company reacted fast and forthrightly in disavowing the ad and apologizing for its creation.

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Miracle Mattress owner Mike Bonanno issued the following from Houston:

Today, I was made aware of a social media video produced by our San Antonio team highlighting a promotional sale using the upcoming 9/11 anniversary as the incentive. The video was posted on Facebook without my knowledge or approval from our corporate office in Houston.

I say this unequivocally, with sincere regret: the video is tasteless and an affront to the men and women who lost their lives on 9/11. Furthermore, it disrespects the families who lost their loved ones and continue to struggle with the pain of this tragedy every day of their lives.

As bad and damaging as this idea was, the owner at least took responsibility, apologized and — it didn’t need to be spelled out — promised that it would never happen again.

This example of a crisis is laden and layered with social media significance. First, the makers posted the ad live to Facebook. If this were a TV ad, that wouldn’t be possible. Someone, several someones, would have had to review and approve it. Presumably, smarter decisions would have been made.

Also, of course, without social media — in this case FB and YouTube — this would have been a local scandal in San Antonio, TX, and maybe Houston, not a national/international one. The BBC covered it, as did CNN.

Finally, and most upsetting, is that social media lulls us into thinking that the stupid back flip we did into the lake last week and posted on all our feeds is the same thing as an ad for a mattress company. too many people have lost that filter and the ability to discern that what can be at least OK — or simply dumb, juvenile or foolish — in private, is very different in public.

Surely, this is a one- or tw0-day story. And more than likely, Miracle Mattress is looking for three new employees in its San Antonio store — which closed due to death threats, another unsavory offshoot of social.

Just as surely, this unnecessary, self-inflicted crisis will cut deeply into sales.

The content of this blog is about crisis management and mismanagement in a digital age. It originates with Steve Bell, who spent 30 years as a journalist for the Associated Press and in four top editor positions at The Buffalo News. He is now Partner/Director of Public Affairs and Crisis and Reputation Management at Eric Mower + Associates, one of the nation’s largest independent advertising, integrated marketing and public relations agencies, with eight offices in the East. Learn more about EMA at mowerpr.com/crisisready. Steve’s blog is based on his own opinions and does not represent the views or positions of Eric Mower + Associates.

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Ailes, Fox mess shows how to measure a crisis

The sordid story of media chieftain Roger Ailes’ rampage through the Fox News workplace the last 20 years would have been bad in the days of Jane Fonda, Dolly Parton and Lily Tomlin in “Nine to Five.”For 2016, it’s eye-opening, not to mention scary real.

The costs to parent 20th Century Fox and the embarrassment to Clan Murdoch — and of course that large numbers of professional women were subjected to vile harassment and driven from their jobs — are extraordinary.

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For a crisis manager, while all that is true, this is a swarming petri dish of crisis.

A crisis is determined not by the trigger, but by the duration of the crisis and the level of distraction that attends it.

Sure, Fox News hasn’t gone dark. Most of the Stars of the Right still rant and rave each day and night. But it’s a crisis that’s lasted most of the summer and still rolls along, with popular and long-time host Greta van Susteren walking out Tuesday.

The New York Times today noted that seven weeks passed since news first broke of the allegations against Ailes from former Fox anchor Gretchen Carlson.

You can see the Murdochs trying to curtail or even end this crushing loss of face, by issuing a strong apology, along with a check for $20 million to Carlson. But that’s not likely to happen.

This clan is no stranger to crisis, and corporately and personally have the assets and revenues to survive it. Rupert Murdoch managed his way through the telephone hacking and eavesdropping crimes, scandal and cover up generated by The Daily Mail in London in 2011. These executives don’t run for the hills, they dig in and fight.

But back to our petri dish. The more that comes out, the worse it gets. The more allegations that prove true, the harder it is to do business as usual. Already there are calls for Fox to “clean house” and get ride of Ailes’ team, which still runs the most successful cable TV station in America.

There are key rules that can help curtail a crisis, and, if followed successfully, shorten its life cycle. First, if bad news is going to come out, you should release it first, proactively. After the first allegations surfaced seven weeks ago, Fox initiated an investigation, which obviously led to yesterday’s settlement. Release the report.

Second, take all your hits in one round. If you know it’s bad and more will come out, tell all at once. You gain credibility for admitting error and showing transparency — and, you empty the well of the smelly stuff.

Third, always share all the bad news internally first, with your employees, board and supporters. It’s not clear if Fox ever did so. Fourth, the best way to answer tough questions is to answer them before they’re asked. Come clean, in other words.

Finally, only facts trump rumors and speculation. Even the announcement yesterday of the Carlson award didn’t preempt reports that other settlements were also made. Why not announce it all.

This is a bad one for Fox, especially because it’s been such a lightning rod — and Ailes it’s bolt-throwing Zeus — for advocacy journalism, Donald Trump and angry rightist conspiracies.

But this one’s not going away for a while. Do these five rules work? Ask Ryan Lochte.

The content of this blog is about crisis management and mismanagement in a digital age. It originates with Steve Bell, who spent 30 years as a journalist for the Associated Press and in four top editor positions at The Buffalo News. He is now Partner/Director of Public Affairs and Crisis and Reputation Management at Eric Mower + Associates, one of the nation’s largest independent advertising, integrated marketing and public relations agencies, with eight offices in the East. Learn more about EMA at mowerpr.com/crisisready. Steve’s blog is based on his own opinions and does not represent the views or positions of Eric Mower + Associates.

 

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Clinton email mess avoidable 18 months ago

The FBI director scolded. The pundits pounced. Trump trumpeted. And crisis managers continued shaking their heads sadly, their inner souls singing: I told you so, I told you so.

In the end, for all the criticism, hours of video, billions of electrons and miles of newsprint involved in former Secretary of State Hillary Clinton’s improper use of a private email system, the FBI determined she broke no laws.

Return therefore to March 2015, when it became publicly known Clinton used unsecured private servers for State Department emails. She held a news conference at the United Nations and purportedly answered all the speculation about her email use. But she did not. She shaded, obscured, feinted and disassembled. Watch and she barely makes eye contact with her audience. As I wrote at the time, even she doesn’t believe the hooey she’s selling. The result? None of the pressure on her to “come clean,” dissipated.

And then to September 2015, when she finally apologized for her email habits during an interview with ABC News.

Nine more months passed — months filled with her political opponents painting her as a criminal — and we have the FBI’s verdict. Extremely careless. Improper. Clueless, even. And, some would add, stupid and arrogant.

In her March defense, she said there were no rules against what she did. That’s like saying there are no rules against letting a dish towel get too close to the burner on a stove, but it’s common sense that it’s not a good idea.

Point here is that if Clinton had done the right thing, stood up and taken her lumps — in March 2015 — and even used exactly the language FBI Director James B. Comey did yesterday, the controversy would have deflated. Admissions from her that she was stupid, arrogant and wrong likely would have relegated it all to the basement of political criticism.

What might have happened if, at the March 2015 news conference at the U.N., she’d said what Comey said yesterday? “A person in my position ‘should have known that an unclassified system was no place’ for the emails I was sending.” If she’d said that, apologized and not tried to blunt and stall and pretend her actions were something other than they obviously were, she would have eased and possibly ended the crisis.

Mark Twain once said about doing what’s right: “That will gratify some people, and astonish the rest.”

It’s staggering that a person of her intelligence and experience could not see that, could not see fit to take responsibility for her failings and admit those to the American people. Is her ambition to reach the White House so blinding that she can’t see reality as it swarms her?

The content of this blog is about crisis management and mismanagement in a digital age. It originates with Steve Bell, who spent 30 years as a journalist for the Associated Press and in four top editor positions at The Buffalo News. He is now Partner/Director of Public Affairs and Crisis and Reputation Management at Eric Mower + Associates, one of the nation’s largest independent advertising, integrated marketing and public relations agencies, with eight offices in the East. Learn more about EMA at mowerpr.com/crisisready. Steve’s blog is based on his own opinions and does not represent the views or positions of Eric Mower + Associates.

 

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Baylor, Starr make sex abuse crisis worse

Worst ever.

That seems the overwhelming consensus on former Baylor University President and Chancellor Kenneth Starr’s “performance” in an interview last week.

Starr, who was forced to step down, along with the Baptist school’s athletic director and head football coach, is embroiled in a football player sex abuse scandal that’s shaking the broader college community.

Starr, you might recall, is no stranger to major media exposure. It was his 1998 report that alleged that then President Bill Clinton lied during a deposition that he’d had an affair with Monica Lewinsky. This led to Clinton’s impeachment.

Thus as the world turns did Starr find himself in a mess at Baylor. The question in the interview where his handler blew up his image revolved around an email sent by a rape victim. A TV reporter asked if he’d seen the email. Amidst all his hemming and hawing about how many emails he gets and how many he actually sees, it’s pretty clear that an email with the Re: line of “I was raped at Baylor” is memorable.

But for all Starr’s fumbling and mumbling, the key to this interview blowing up was his crisis manager, Merrie Spaeth. First, she was introduced to the TV reporting team as a long-time family friend. That’s subterfuge right there, since she worked in the Reagan White House and owns her own PR firm. Then, she actually interrupted Starr’s interview, twice, really, to change how he answered the question about the rape email.

Whether the university or Starr personally retained Spaeth, this was a huge blunder. If you can’t prepare your subject for an interview and then get out of the way, you’re both under water. If the rape email question surprised Starr, he should have asked for more details and said he did not remember getting it, but that he would get back to the reporter after he reviewed the information.

It’s obviously a disaster for Starr, the university and Spaeth. And it was totally avoidable.

The content of this blog is about crisis management and mismanagement in a digital age. It originates with Steve Bell, who spent 30 years as a journalist for the Associated Press and in four top editor positions at The Buffalo News. He is now Partner/Director of Public Affairs and Crisis and Reputation Management at Eric Mower + Associates, one of the nation’s largest independent advertising, integrated marketing and public relations agencies, with eight offices in the East. Learn more about EMA at mowerpr.com/crisisready. Steve’s blog is based on his own opinions and does not represent the views or positions of Eric Mower + Associates.

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Kane, McCoy cases in Buffalo show different crisis responses

Buffalo’s a huge sports town. The television ratings for its woeful but improving Buffalo Sabres are nonetheless cresting near the top of the NHL standings.

People follow athletes in Buffalo like soccer players in Barcelona or skiers in Austria.

It’s instructive then to look at two of Buffalo’s higher-profile pro athletes and consider how each dealt with his own crisis.

First, LeSean McCoy, star running back for the Buffalo Bills, traded from the Philadelphia Eagles to the Bills in 2015. On the night of the Super Bowl, McCoy and some friends apparently got into a ruckus at a club with two off-duty Philly cops.

No charges yet filed; no clear indication of guilt; no comment from McCoy; no action either way by the NFL or the Bills.

Let’s turn then to Evander Kane, star Sabres forward who missed Monday’s practice because he was in Toronto late Sunday for the NBA All-Star Game. His coach, Dan Blysma, benched Kane from tonight’s game in Ottawa.

Kane today apologized for his mistake.

“First and foremost, I want to apologize to my teammates for letting them down,” Kane said. “Me missing practice yesterday was irresponsible and I take full accountability for my actions with what happened.”

No doubt Kane’s transgression and punishment are two on a 10 scale compared to McCoy’s, who could be charged with aggravated assault.

But there are many things McCoy could say that would not impinge on his criminal defense, should he need one, and still demonstrate that he cares about his teammates, the Bills organization, owners Terry and Kim Pegula and the fans.

Prosecutors and the courts will decide if he did anything criminal. But McCoy also should worry about his reputation and his future standing with the team. After all, some media and fans have called for his release, something that could cost him millions of dollars.

Added Kane today: “I wanted to apologize to my teammates, the Pegula family as well, our coaching staff and general manager,” he said. “It’s something that should have never happened. It’s something that I can promise you won’t happen again and it’s something that I’m definitely going to learn from.”

Along the same lines, how might this sound from McCoy?

“While I must wait for all the facts to come out in this case, I want to apologize to the Bills organization, the Pegulas and our fans. I cannot say much about what happened, but I can take responsibility for causing distress and concern to so many people who have supported me over the years. I’m confident I only acted in self-defense, but I acknowledge that a person others rely on and see as an athlete worth emulating should not have been at that place at that time.”

Maybe McCoy could learn a few pointers from Kane.

The content of this blog is about crisis management and mismanagement in a digital age. It originates with Steve Bell, who spent 30 years as a journalist for the Associated Press and in four top editor positions at The Buffalo News. He is now Partner/Director of Public Affairs and Crisis and Reputation Management at Eric Mower + Associates, one of the nation’s largest independent advertising, integrated marketing and public relations agencies, with eight offices in the East. Learn more about EMA at mowerpr.com/crisisready. Steve’s blog is based on his own opinions and does not represent the views or positions of Eric Mower + Associates.

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Managing QB Manning’s ‘crisis’ over HGH

We won’t know for some time, if ever, who’s telling the truth about allegations that Denver Broncos quarterback Peyton Manning used human growth hormone when recovering from potential career-ending injuries a few years back.

And, given the sorry history of Lance Armstrong and many others, it’s not worth speculating or taking sides. Today’s Washington Post, in advance of Sunday’s 50th Super Bowl, and possibly Manning’s final game, dives deep into what transpired around the controversial Al Jazeera report.

But what is clear is that Manning is taking no chances with his reputation, hiring lawyers, private investigators and one of the most high-profile crisis managers available, former presidential press secretary Ari Fleischer.

Why?

Because if you don’t like Papa John’s pizza, or you’re not one of the millions who can’t get the Nationwide Insurance jingle out of your head, then surely you understand that Manning stands to make as much or more money in the next decade as a TV pitchman and possible NFL commentator as he did on the field.

For Manning – a long-time media darling perceived as one of the NFL’s best, as well as one of it’s ‘good guys’ – much is at stake.

What has his investment returned?

At least he has a smart crisis manager. If you read the Post story, Fleischer walks several fine lines, commenting and appearing transparent when he can, but retreating behind health disclosure laws when he needs to. He plays the crisis management game at the same high level Manning does in the NFL.

This certainly beats what we call the ‘Death Strategy,’ delay, deny, deceive. Or, the more frequently used duck, cover, no comment approach. Both are devastatingly bad.

Manning previously had a squeaky clean reputation, which is why many of those accused with him faded into the background in follow up stories. No one wants to believe this aw shucks guy with the golden arm fell victim to the ethical failures and cheating that drove many others to sacrifice integrity for money. And at this point, no one can say he did.

But as one would expect from a Super Bowl quarterback, he’s mounting a good offense.

The content of this blog is about crisis management and mismanagement in a digital age. It originates with Steve Bell, who spent 30 years as a journalist for the Associated Press and in four top editor positions at The Buffalo News. He is now Partner/Director of Public Affairs and Crisis and Reputation Management at Eric Mower + Associates, one of the nation’s largest independent advertising, integrated marketing and public relations agencies, with eight offices in the East. Learn more about EMA at mowerpr.com/crisisready. Steve’s blog is based on his own opinions and does not represent the views or positions of Eric Mower + Associates.

 

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