Demand for mine waste dump records underscores growing influence of "private regulation" on business
InfluenceChronicles.com -- Global companies are dealing with increasing efforts toward s0-called private regulation -- a controversial but impactful activist strategy that's here to stay because it's working.
Thanks to internet-fueled social media and always-on instant information -- or propaganda -- many non-governmental organizations (NGOs) and pressure groups have the same worldwide reach as multinational corporations.
Combined with society's heightening expectations of corporate social responsibility, this broad ability to connect with stakeholders and influencers has promoted an environment where some pressure groups have the power to impose de facto regulation on companies and industries absent government laws, regulations or court orders.
A recent example: Investor demands that mining companies disclose the safety records of their waste dumps, which often include toxic elements. The movement followed the collapse of a dam in Brazil that killed some 300 people.
Almost 100 investors controlling $10 trillion in assets to more than 600 mining companies --including the world’s largest operators like Anglo American and BHP Group -- sent each a letter complaining that current waste dump disclosures are inadequate, and announced plans to create a global database that tracks each company. Any operation that fails to comply with their higher standards, the letter said, risks losing its investment.
The investors group includes top-tier entities like The Church of England Pension Board and Sweden’s public pension fund.
This elevated form of investor activism has potential to impact any company with exposure to social, environmental and safety issues, which in turn could influence governments to catch up or wrest back some control back.
In any case it's an arena with many new, multifaceted controversies to come.
-- Paul Jacobson
You’d think a company that flew its CEO to Washington on a private jet for $20,000 to beg Congress for a multi-billion dollar government rescue would by now have developed sensitive enough PR antenna to spot a corporate reputation dog’s dinner on the horizon. Apparently not so at General Motors. The “new” General motors, with a different CEO, recently struggled with PR mess that shows when it comes to public outrage — it’s less about the numbers — and more about symbolic value of the transgression.
As Dr. Daniel Diermeier of Northwestern University observed in his 2011 book Reputation Rules: Strategies for Building Your Company’s Most Valuable Asset, the cost of the CEO flying private to DC was a drop in the bucket compared to the $25 billion bailout the U.S. auto industry sought at the height of the 2008 financial crisis. The symbolic cost, however, was much higher as taxpayers grew outraged over the disconnect between the huge financial ask and the mode of transport.
The Detroit big three soon sold their company jets.
Eleven years later it’s springtime and opening month for that most American of institutions, major league baseball, including the Detroit Tigers. Those of a certain age will remember Chevrolet’s ad slogans that painted Chevy as part of the American fabric much like baseball, hot dogs and apple pie. Keeping with that tradition, for the past ten years Chevy has displayed its newest models in the outfield of Detroit’s Comerica Park.
This year it was a Chevy pickup — good so far — and the new Chevy Blazer — not so good. The Blazer is assembled in Mexico and, as the irreverent automotive blog Jalopnik said, “this pissed a lot of people off.”
The public outrage followed recent GM announcements that it’s closing the Detroit-Hamtramck and Lordstown, OH assembly plants plus three others. Let’s remember that Donald Trump won Michigan by three-tenths of a percent because the auto workers there grew tired of seeing their jobs go to other countries.
As the outrage mushroomed GM quickly swapped out the Blazer for another vehicle but not without first noting that Blazer production contributes about a half-billion dollars annually to the U.S. economy, as if that fact would somehow counteract the absurdity of putting a truck assembled in Mexico above center field of Detroit’s major league ballpark.
Getting the facts out about the Blazer’s contribution to the U.S. economy was not the right answer. Eleven years ago the symbolism of a $20,000 private jet flight to beg for a taxpayer bailout obliterated any rational thinking and cost GM’s CEO his job. Today, the Blazer’s half-billion dollar contribution to the U. S. economy meant nothing to the out-of-work auto workers throwing beer cans at it from the outfield bleachers.
New England Patriots owner Robert Kraft is charged by Jupiter Florida police with soliciting a prostitute in a strip mall massage parlor. Kraft denies any wrongdoing but this is one time when Bill Belichick’s vaunted playbook won’t be of use. How will Kraft and his advisors follow a different playbook — one for crisis communications? We may not know the full answer for weeks or months but in the initial hours the answer is mixed.
Kraft, through his spokesman, was right not to clam up (that’s a New England term) with a strict no comment. Within the first 20 minutes the story was exploding across all forms of media and already headed for the late show monologues. Absent any comment the void would be filled with the kind of colorful, speculative scenarios that any sports talk show host can brew up with ingredients like sex, the NFL, a billionaire owner and a seedy massage parlor. That’ll still happen — but at least Kraft’s statement will be part of the mix.
A closer look at the statement reveals some flaws. His spokesman said that Kraft and his organization“categorically deny that Mr. Kraft engaged in any illegal activity. Because it is a judicial matter, we will not be commenting further.”
Time to call a flag on the play. One of the prime rules in an unfolding crisis is to say only what you know to be absolutely true. Are they really sure there was no illegal activity? After all, the police hid video cameras in massage parlors and videotaped interactions between men and the female employees. Then, at a news conference the police chief clearly identified Kraft, the Patriots owner, as the one charged. Someone is walking out on a limb.
The second mistake was use of “no comment” phraseology. In the public’s mind “no comment” stands alongside “I take the fifth” as a euphemism for having something to hide. Changing a few words can make a huge difference in perception. “No additional statement will be made at this time” would have worked just as well.
And then we have the classic response to any court action with the phrase “Because it is a judicial matter, we will not be commenting further.” There’s the courtroom, and then there’s the court of public opinion. This isn’t the CEO of some unknown company allegedly caught at a rub and tug, it’s the celebrated NFL, one of American’s most valued and protected brands. NFL policy holds players and owners to high standards and they can be punished for“conduct detrimental to the integrity of and public confidence in” the league.
To cut off all future public comment at this early stage because it’s a“judicial matter” is a classic legal response geared to courtroom procedure when the more important venue is outside the courthouse in the crazy, uncontrolled world of the media, which has no procedures.
Although over-responding is a common mistake in a crisis when not responding is often the best way to make it go away, it’s poor strategy to shut off all future public statements when there may come a time where something surfaces in the media that is so outlandish it demands a response.
The Patriots and the NFL have lots of PR and branding wizards. Use them. For Kraft and the League to safely navigate this crisis they shouldn’t rely on personal decisions clouded by emotion, or personal lawyers, who may focus too narrowly on their client and the actual courtroom. The more important venue is the town square where the damage to the reputations of Kraft, the Patriots and the NFL will be decided.
Another study confirms what those of us in the crisis PR field know and many senior business executives acknowledge: a lot of capital destruction takes place — and it happens fast — when a company’s reputation takes a hit.
Accenture studied more than 7,000 companies around the world and found more than half of them suffered reputation damage that cost them up to $180 billion in revenue. The study was reported in The Wall Street Journal and can be found here.
The report defined trust as comprised of consistency, integrity and transparency. Others have identified key elements as commitment, empathy, expertise and transparency. Whatever the exact words, the unmissable conclusions and observations are that bad news corrosive to a company’s trust travels like wildfire on social media and is magnified beyond reason.
It can be especially devastating to companies and brands with a fiduciary or safety element: banks, utilities, airlines and car makers. The Accenture study found, for example, the a two point drop in a bank’s “trust index” score slowed revenue growth by about 22%. The impact wasn’t as great on consumer goods and the services sector.
For many businesses, especially those not normally in the media spotlight, how they decisively handle the situation in the minutes and hours it unfolds can define their public trust, or lack of it, for months or years to come. Good executives instinctively know this and there are plenty who casually assert confidence in their management team’s ability to control any situation.
But when a real trust busting crisis shows up what usually develops is a bad case of the Grand Klong. Symptoms include a sinking feeling, dry mouth and intestinal distress requiring multiple trips to the bathroom and an inability to act with clarity and decisiveness.
As much as business likes to criticize government as inefficient, there’s one place where the opposite is true: communications. On Capitol Hill I recall one time when my U.S. Senator boss told me he agreed to headline a news conference that started in 30 minute sand he needed a set of talking points. I wrote them and in a half hour he was in front of more than 35 TV cameras doing riffs off what I wrote.
Ask many private sector managements to move that fast under media deadline pressure and their heads would explode — unless they had the foresight to plan for that day and practice how they would behave — in real time.
Unfortunately, not enough do. While they’re still debating internally about what to do, the bad news story blows out the tube and torpedoes their trust factor, market cap and revenue prospects. And while the Accenture study looked at large public companies the same dynamics can affect private firms and small to medium sized enterprises that may not have the resources to even survive.
InfluenceChronicles.com -- Hello fellow occupants. We're still experimenting with Week Links to ascertain what our fan base likes best. Ok, maybe it's not a fan base in the typical sense of the word. But it's more than 12 people not counting us or our moms. So let us know what you think as you review these few noteworthy items from the trenches of influence:
That’s just so Chicago, isn’t it? – Protesters around the country demanded President Trump’s tax returns with the usual assortment of derogatory signs and march ditties. In at least one city, however, protestors took things up a notch by using The Magic Word.
New rakes for modern muck. -- This year’s Pulitzer Prizes for Journalism are the first since President Trump proclaimed that the news media “is the enemy of the American people.” This astonishingly Nixonian sentiment is helping fuel a resurgence of the kind of deep-digging investigative reporting that became increasingly rare as the internet decimated local newsrooms. “Pulitzer prizes reminds us that we are not in a period of decline in journalism,” said one official. “Rather we are in the midst of a revolution."
But who will play him in the movie version? -- Will a book titled The case for impeaching President Donald J. Trump influence if, when and how it actually happens? Hard to say. But it's worth noting that the author is the same American University professor who has correctly predicted every presidential election since 1983 – including the current leader of the free world.
Having a moving influence on voters. Ha ha. Heh. -- Perhaps inspired by how Donald Trump majestically rode an escalator down to announce his presidential candidacy, former Colorado state treasurer Cary Kennedy announced that she’s running for governor while driving her car. The resulting coverage focused on how she put citizens at risk by looking down at her notes instead of watching the road. Good to get that first campaign blunder over with early.
Sieg Hokum! – Maybe this trend of comparing political opponents to Hitler has finally jumped the shark: In North Carolina, a state lawmaker arguing for a ban on same-sex marriage pointed out that Abraham Lincoln was “the same sort of tyrant" as Der Fuhrer.
Where's your next brand black eye coming from? – Proving again that PR screw-ups are often born of the best intentions, someone at Adidas approved an email congratulating Boston Marathon runners “who survived” this year’s event -- despite the deadly bombings being only four years ago, despite a movie about the tragedy still being viewed by millions of people, despite the hyper-sensitivity that ostensibly permeates risk-averse mega-corporations.
And in case you missed it: United Airlines learned the hard way that its lofty goal to “make every flight a positive experience” isn't helped by dragging bloodied, screaming customers away from the product. The self-afflicted PR crisis underscores some important truths that your own company should consider in preparing for and responding to bad news events. Read it here.
InfluenceChronicles.com and Week Links come from SilversJacobson, LLC, an executive consulting firm specializing in corporate reputation risk prevention, crisis management and strategic communications. For more information visit www.silversjacobson.com.
InfluenceChronicles.com -- Most of the world’s ten million crisis communications experts have weighed in on how United Airlines should have handled one of the most avoidably self-afflicted corporate public relations disasters ever.
United has learned an important lesson: That the company’s goal to “make every flight a positive experience” does not include dragging bloodied, screaming customers away from the product. For the rest of us, here are four essential truths about PR crisis that United’s ignominy should help every executive keep in mind:
1. A bad news event most often becomes a PR disaster because the company bungles its initial public response.
Coming out the gate, United Airlines CEO Oscar Munoz threw gasoline on an already raging fire by apologizing “for having to re-accommodate these passengers” -- ignoring that millions of people around the world were watching with jaw-dropping outrage the phone videos of Chicago airport security men violently dragging the non-violent, 69-year-old Dr. Dao down the aisle while other shocked passengers screamed to stop.
And just like that, an inexcusable but isolated, maybe even containable incident of barbarity by a third party becomes United’s global PR fiasco.
Consider how things might have played out if United's leader had instead come out seething with the same fury, demanding immediate answers as if it had been his own father dragged down the aisle, breaking his nose and knocking out teeth.
United's first response epitomizes a reputation risk that exists at many good companies, the ones that engage their publics as stakeholders. Yet in the first hours after a bad news event, many of those same companies suddenly treat their stakeholders as liabilities -- threats to be mitigated by dancing around the issue with words that say nothing and admit even less.
This is where a company's PR problem mostly likely becomes it's PR crisis.
In this era of hyper-transparency and real-time information, stakeholders aren’t spectators to how your company responds to negative events. They’re participants. Treating them like anything less is a sure-fire way to make the PR problem worse at the cost of losing their trust.
2. The cost of a PR crisis is ultimately determined by your company’s readiness to respond to situations that nobody saw coming.
Being the third-largest airline in the world, United Airlines has at its beck and call a global army of crisis-savvy experts in law, risk, reputation management and strategic communications. That the company shot itself in the foot so quickly and severely underscores how difficult it can be to manage PR emergencies in real time.
Consider your own company’s preparedness: Does leadership include loss of reputation value as a strategic risk consideration? How would you organize, vet the situation and communicate under extreme duress? Can the company be empathetic toward victims of the bad news events and the public’s reaction to them?
The less certain you are of how your company would navigate a similarly intense and fast-moving bad news situation, the more likely that things are going to get real bad, real fast.
3. The brand is responsible for the bad behavior of its beholders
Consumer brands usually take most of the negative PR for the bad behavior of downstream support companies. This is partly a matter of who has the deepest pockets to pay a possible settlement. But when the company escalates public outrage as United did with its dismissive first statement, the brand’s perceived top-down culpability expands to include all aspects of the negative situation.
While it was the United crew that called them in, it was Chicago airport security that violently dragged a paid, boarded and seated passenger off the plane. Yet Dr. Dao’s lawyers are making clear that they intend to vilify United, promoting their client as the “poster child” for how the airline industry mistreats its customers.
“Are we just going to continue to be treated like cattle?” Dr. Dao’s lawyer asked, saying he’s been “deluged with hundreds tales of woe, of mistreatment” and that “for a long time, airlines — United in particular — have bullied us.”
Consider how quickly this kind of disparaging attack could be made against your company, singularly or as the face of your industry.
4. Corporate PR crisis is a spectator sport, often disproportional to whatever event started it all.
In his 2014 book, Glass Jaw, Eric Dezenhall calls out the entrenched “crisis creation industry” of vested interests, information leakers, publicity mongers, competing news networks and click-hungry media sites – all working to exploit the advantages and failures of the internet age.
The result: An over-amplified, distorted echo-chamber where some idiot’s sexist tweet from a small company nobody’s heard of is reported on CNN International, and United’s seemingly dismissive response to the Chicago incident slashes more than $1 billion from the company’s market value in the span of a day or two.
True, the potential negative impact of any corporate crisis is often mitigated by the next day's fresh scandals and controversies. But protagonists know to push out new information, revelations and allegations to keep their issues active in the court of public opinion. Meanwhile, the company must deal with the real-world fallout of its PR crisis: investigations, lawsuits, recruiting challenges, customer concerns and other costly byproducts. For many small or mid-size companies, what happens behind a PR crisis is as devastating as the public view.
Which is why it’s so important to be prepared for whatever might be from around the corner.
Friday TakeAways is a weekly feature of the Influence Chronicles Blog from SilversJacobson, LLC, a corporate reputation and crisis management consultancy based in Denver and Washington, D.C.
InfluenceChronicles.com -- Welcome to Week Links, a lovingly curated demi-collection of digital destinations, fresh from the front-line trenches of influence minus the dirty words. It took us all week to write that first line and we ran out of time for the next one, so here we go:
Is that before or after we eat it? … There are two ways to create a brand tagline that rises above the clutter. One, you can proclaim a compellingly simple truth, like Levis’ “Quality never goes out of style” and De Beers’ “A diamond is forever.” Or two, you can proclaim a compellingly weird idea, like Nature Valley’s “Everything you need to know about life, you can learn from granola.”
Flake News … Take a look at the #deepstate Twitter feed and you’ll notice how people get all lathered up about shocking but totally fabricated news reports from fake news sites. It’s almost wackily entertaining, except for the part about them being voters. Wikipedia – also a cog in the big wheel of globalist conspiracy – has a list of 50-plus known fake news sites. You’ll know which relatives need a copy.
Treachery Central … Donald Trump isn’t the first president to bring conspiracy theory to the Oval Office – that was GW – but nobody so brazenly wallowed in it as a political and publicity tool. This includes giving high praise to an egocentric Texan named Alex Jones, whose high-production InfoWars network is headwaters for conspiracies like how millions of people voted illegally, that both the Sandy Hook Elementary School massacre and the Boston Marathon bombing were staged government hoaxes, and that the Democratic Party ran a child sex ring out of a D.C. pizza joint. See for yourself.
Never saw it coming … Skin care brand Nivea went out with an ad campaign featuring the phrase, “White is purity,” earning two thumbs way, way up from white supremacists on the Internet (who knew?). We’re going to take a shot in the dark and guess that the company’s reputation risk management person wasn’t invited to the ad agency’s presentation.
A nation of touchy adult teenagers … Here’s how some sociologists explain why Americans are losing their ability to respectfully disagree with each other: The internet and social media are providing people with a constant self-affirming feedback loop, which is conditioning them toward a growing intolerance and indignation about anything that doesn’t jive with their customized Facebook reality. “New technologies are shaping behaviors and dissolving civilities,” writes columnist George Will. “There will rarely be disagreement without anger between thin-skinned people who cannot distinguish the phrase you’re wrong from you’re stupid.”
InfluenceChronicles.com -- An impressive rookie performance … In his first 63 days in office, President Trump made 317 “false or misleading claims,” calculates The Washington Post. That’s on average about five per day.
Not exactly Profiles in Courage ... President tweetacks his own party’s conservative caucus, threatening to get them unelected for spurning his tremendous tremendous plans like the yanked healthcare bill. Caucus members launch tweetalitory tweetacks dissing D-Man with eyeball-burners like "It didn't take long for the swamp to drain @realDonaldTrump."
And it's way more fun than filling potholes … In California, Berkeley's city council is struggling to address underfunded pensions, homeless people going number one and two on the sidewalks, crumbling streets and a severe lack of affordable housing. So of course it took the time to pass a resolution calling for President Trump to be impeached.
Tune in your way ... If you haven’t yet, try out National Public Radio’s “NPR One” app. Though user-clunky – we haven't figured out how to go backwards to a story we skipped – it’s still a great way to hear the newscasts and radio stories you want, whenever you want.
At long last, room to spell out dudu-hed … Twitter announces that “@usernames” won’t count toward the 140 character limit when replying to one or more people. Good news: It makes Twitter conversations less cluttered. Bad news: It's now much easier for users to spam many, many users all at once.
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InfluenceChronicles.com -- When attempting to present the facts in a heated public controversy, spokespeople will often find themselves in conversations like this:
Spokesperson: As you know, the sun rises in the east.
Person: That's one opinion.
Spokesperson: No, it’s not an opinion. It’s a physical fact that the sun rises in the east.
Person: And who decided it’s a “fact”? The fake news media? The occupying one-world-order government that lies about chemical contrails? I don’t believe anything they say.
Spokesperson: (Befuddled) Contrails? No, look, we’re talking about the sun. Look out the window. See, the sun is rising from the east.
Person: Well, of course you have to say that. You’re getting paid by them.
We can expect many more such enlightening exchanges in the years ahead.
For millions of years, PR people have responded to concocted allegations and distortion by putting the facts “out there.” Sure, there will be disagreement about the completeness, context and meaning of the information. But the facts are everyone’s truths, undeniable and irrefutable.
New research, however, says this approach is counterproductive.
Scientists at University College London gathered a group of climate change believers and skeptics, then told them that new hard data either contradicted or supported their beliefs. They found that when people got information confirming what they already believed to be true, their opinions were strengthened. But when people received information that contradicted their opinions, they simply shrugged it off.
The unhappy irony is that despite having information technology to verify most claims and assertions, getting the facts out there is likely to amplify the holding power of misinformation and fake news. We’re becoming a nation increasingly polarized not on meaning, but on the facts themselves.
Or not. It depends where your head is at.
InfluenceChronicles.com -- In the good old days, phishing emails were easy to spot because the Nigerian prince who wanted to split his 12 million dollars with you also split his infinitives and wrote things like “All your base are belong to us.” Supposedly some of this was on purpose, so the poorly written emails auto-qualified only the most gullible recipients. (We're not mentioning names, Bob.)
It's not so funny any more. If you have elderly parents or other less e-savvy loved-ones who bank and shop online, it’s downright terrifying -- especially since banks are increasingly refusing to reimburse consumers whose accounts are raided because they gave their information to email scammers.
Here’s why: In our nation right now, an amazing 30 percent of all phishing emails get opened. We did the math -- that's three out of ten.
With this kind of return, cybercriminals will continue getting more sophisticated at making people think that the counterfeit email from their email service, bank, credit card company, doctor or favorite retail store is exactly what it appears to be. So be careful out there, and help others who aren't.
Check out and share this article from security and risk experts CSO: 5 ways to spot a phishing email.
InfluenceChronicles.com -- We’re finding out. A new USA Today -Suffolk University poll finds that one in three voters agrees with President Trump that the nation’s news media is “the enemy of the American people.”
Not biased, inaccurate or irrelevant. Not hard to read or too preoccupied with weather. But the enemy.
Of course you have to put this result in context to the fact that many Trump supporters and rattle-the-cagers endorse his hyperbole on purpose. It’s part of the middle finger they’re giving the establishment, including news media. So when a pollster calls one of these folks on behalf of – you get where this is going – USA Today, then, why yes, this American agrees that the news media is "the enemy of the people."
But the study also is another warning to companies that make the mistake of thinking they can fix a reputation crisis just by "getting our story out there." Considering these same polls show that people distrust corporations and CEOs even more than the news media, this notion might make the crisis situation even worse.
InfluenceChronicles.com -- Walt Disney Co.’s annual shareholders meeting was marked with protests outside and pointed questions inside about how the company represents social themes in its content and CEO Iger’s service on one of President Trump’s advisory groups.
Sure, when you’re as big and visible as Disney the annual meeting will always attract activists. Some will wear funny hats. But what happened this year highlights how companies are increasingly being judged by customers -- especially but not exclusively millennials – based on their perceived political and social behavior as much if not more than on their products, services and financial performance.
Whether those perceptions and reactions are justified is a whole other issue.
InfluenceChronicles.com -- At one of our crisis communications workshops, a general counsel said his company would use a strategy of ignoring reporters to delay or kill a negative story. It's best to ignore news media until all the facts are known, or until there's some “good news” to tell.
But this works only if your company is Boss of Everyone. If it isn't, then you can’t stop media from reporting a legitimate news story any more than you can push water uphill with a fork. Not only do your pants get wet, but you look like you're clueless about gravity and other forces of nature.
What drives media coverage of your company's crisis or controversy is being first with the headline, and then being first with new information as the situation unfolds. An editor or producer has no obligation to include -- much less wait for -- your company's spin of the story.
In the analog days, we'd say that a news story didn’t have to be complete because “there’s always another newspaper tomorrow.” We'd wait for it on the porch with our Tab and Space Food Sticks.
Today, however, updated and expanded versions of a story are delivered as fast as it takes to upload. Confirmations and clarifications, new discoveries, allegations, comment strings, Facebook posts, Tweets and real-time video spread across the ether with mind-blowing speed to form an information ecosystem that didn’t exist only hours before.
Not responding to a negative news story means you're adding another layer of risk to your company's reputation. You leave it to reporters to discover details you don’t have or don’t want to share. Information and speculation get rushed into the narrative, regardless of accuracy.
In most cases you prolong the bad publicity you were trying to avoid.
One more thing. The more obstinate your company in not responding to bad news, the more it becomes part of the story -- even the more damaging PR crisis.
Does that mean you must have answers to every question? Of course not. But there’s a huge difference between hiding under the desk and making a sincere effort to explain what you can and can't discuss. Engaging news media with sincerity during an emerging crisis -- including why you can't comment -- is a credibility factor. You may even get some breathing room to put new information in your context before it goes live.
The rule is the same whether you’re dealing with good or bad news: Say only what you know to be true.
But say it. Your company will be better for it.
InfluenceChronicles.com -- With cybercrime against U.S. corporations increasing beyond already epidemic levels, its victims remain largely ambivalent about when, why and how to communicate about it.
According to the advocacy group Privacy Rights Clearinghouse, U.S. companies have been hit with more than 2,600 significant network hacks and breaches since 2010. Yet the Wall Street Journal reports that in that same period, barely one percent of all publicly traded corporations disclosed any cyber-crimes in their Securities Exchange Commission filings – an apparently glaring contradiction in this era of hyper-transparency.
For some of these companies it’s also a precarious position. Consider the potential fallout should a company be forced by events or law to disclose a significant data breach, which in turn unveils previous incidents that were kept hidden from investors and customers.
So why are so few companies not communicating beyond what's required by current disclosure regulations? Here’s one reason: As a reputation risk management problem, a network hack or data breach constitutes a uniquely complex corporate PR crisis:
It’s no wonder that senior execs are more concerned with managing cyber threats than with almost any other risk to their companies’ reputations.
And it’s why many tried-and-true rules for crisis communications no longer apply.
InfluenceChronicles.com -- How'd you like to slog off to work every morning knowing that your customers don’t trust you? That sums up the life of local journalists, say two recent reports. Why it matters? Because it impacts how your local newspaper or TV Action News Team covers your company’s next crisis.
A Gallup Poll found that barely three out of every ten Americans trust what they see in the news. And on CareerCast’s 2016 list of the 200 worst jobs, newspaper reporter ranked dead last, with broadcasters taking bragging rights for being only the nation’s third-worst career. The annual list takes into account working environment, income, growth potential and stress factors.
Too many local reporters are overworked, underpaid, unappreciated and isolated in newsrooms that have neither time nor money to let them truly engage and understand the arenas they cover – especially the business world.
This leads to a fatalistic, cynical view of the world that steers even talented reporters down the path of least resistance, characterized by shallow, clichéd conflict stories that provide inaccurate or no context, and that give equal weight to any “contrasting” source, no matter its lack of credibility. For companies responding to complex crisis situations, this tired and formulaic approach to journalism can result in undeserved damage to their hard-earned reputation.
While it certainly doesn’t exist in every market, it’s important to anticipate this predisposition to fast-food local journalism, especially if your company’s crisis communications strategy is to speak with reporters. The best way to prepare -- aside from knowing your facts, messaging and how to handle interviews -- is to deliver as much concrete, articulate information as possible. Dish it up on the proverbial silver platter in easily digestible portions.
A seasoned and solid journalist will appreciate the directness, which will help ensure an accurate story. And for the over-worked and disconnected reporter, the closer you approach “add water and stir,” the better the chances the resulting story will accurately represent your company's position. Quite often it’ll be included verbatim.
What’s happened to local journalism – and especially local business reporting – is tragic. But the reality is that today’s lean media environment, with its ratings pressures and “pay by the click” compensation, forces many local reporters into being glorified stenographer-provocateurs looking for edgy or emotional angles.
Be aware and ready.
InfluenceChronicles.com -- When Facebook deleted the iconic “Napalm girl” photograph because it violated policy on showing nude children, the Norwegian newspaper editor who posted it wagged a sanctimonious finger at CEO Mark Zuckerberg.
"The media have a responsibility to consider publication [of stories] in every single case," wrote Espen Egil Hansen, editor at Norway’s largest newspaper, in an open letter to Mr. Zuckerberg. "This right and duty, which all editors in the world have, should not be undermined by algorithms encoded in your office in California."
Facebook allowed the photo after members around the world protested -- underscoring the power of social media communities to police themselves. The outcome was as it should be.
But in reporting the reversal, most news media -- some treating the controversy like it was another Scopes trial -- failed to clarify that the commercial Norwegian newspaper was using Facebook first and foremost as a free marketing and publicity tool. “You are offering us a great channel for distributing our content,” Hansen wrote. “Even though I am editor-in-chief of Norway’s largest newspaper… you are restricting my room for exercising my editorial responsibility.”
It's doubtful that Mr. Hansen read through Facebook's investor prospectus to find where it says the company is beholden to his “exercising of editorial responsibility.” Because it's not there.
Here's the thing about the internet. Over time, the relationship between social and news media will either achieve mutually-beneficial equilibrium or reshape itself completely -- just like what happened with personal home pages and other content aggregation platforms. Mr. Zuckerberg sees this as making Facebook the "perfect personalized newspaper for everyone in the world."
However things play out, we should be cautious about holding Facebook and other corporate-owned social media services accountable for not behaving like the news journalism companies they aren’t.
Delivering the milk doesn’t make you a cow.
InfluenceChronicles.com -- Five takes on EpiPen, virtual reality, surrender ceremonies, Roger’s fall and how Donald Trump’s campaign is like one very long Twitter feed. I don't know, but that is what people are telling me, it’s so beautiful. Really really something. And it’s going to be amazing, believe me.
InfluenceChronicles.com -- Atlantic Monthly laments with us Baby Boomers the demise of advertising jingles, which have greatly died out since Pepsi's 1984 production with Michael Jackson established today's marketing marriage between brands and popular music.
But how many of those campaigns have millions of loyal fans who even 43 years later know every word to Oscar Mayer’s iconic My Bologna Has A First Name? Sing it, citizen consumers:
My bologna has a first name
My bologna has a second name
I love to eat it everyday
And if you ask me what I'll saaaaaaay
Cuz Oscar Mayer has a way with B-o-l-o-g-n-a
InfluenceChronicles.com -- Brand and reputation. It’s a critical distinction that drives a company’s ability to minimize the impact of its next public relations crisis.
Brand is how your company talks to the world.
Reputation is how the world hears your company.
Some people say reputation and brand mean the same thing. But that’s like saying the pitch and the swing are the same because they’re part of the same baseball game.
Closely related, but very different.
Reputation risk management is a paradox. On one hand the company's reputation is its most important asset. On the other hand it is the asset most vulnerable to damage by conditions largely out of the company’s control.
A brand is a promise, but more than just deliverables. It’s what the brand’s owner needs people and institutions that matter to believe to be true.
Reputation, on the other hand, is what stakeholders and influencers actually believe. It's a mix of personal experiences and influences, all weighed against motivations that drive every decision to trust a brand, buy a product or support an idea:
The wider the gap between a company's brand and reputation, the more potentially damaging a controversy or crisis.
But the more a corporate and brand reputation jive with what stakeholders want to believe, the stronger the company’s ability to navigate and even prosper through bad markets, complex public issues and crisis events. It’s no wonder that companies with solidly good reputations have market caps of 30 to 70 percent more than their book value.
Illustration courtesy Huffington Post.
InfluenceChronicles.Com -- National Public Radio has joined the growing number of online media outlets that no longer show public comments at the bottom of news stories.
In case you’re new to this WWW thing: Many comment sections have been commandeered by small groups of mostly anonymous "trolls" who shout down and ridicule anyone with opposing opinions, often with incredibly violent imagery and hate speech. And don't get us started about punctuation.
Many news sites held on – and still do -- to comment sections in part because they create space to sell ads, without the nuisance of paying journalists for content. These days, however, social media platforms offer more civil, cost-efficient ways to facilitate public dialogue around sponsors’ interests. The result is that media sites are dropping comment sections as a well-intentioned but failed, high-maintenance vestige of a simpler Internet time.
But not all. One ticked-off supporter of comment sections is Breitbart News, the hyper-populist, anti-lefty media site whose chairman is now running Donald Trump’s presidential campaign.
Hostile partisan vitriol is what outlets like Breitbart and the anti-righty Daily Kos are selling, and they have plenty of followers (including trolls). But these aren’t products that attract mainstream advertisers and promotions. It’s commerce, not comments, that keep most online media in business.
Time Magazine underscores the problem with its cover story, “How Trolls are ruining the Internet.” Some 80% of the 93-year-old magazine's own writers said they don't cover certain topics because they fear the online response. Sometimes the attackers will track down and harass a writer's spouse, parents, even children.
Despite America’s chaotically contradictory Internet culture, it would seem that the bulk of news comment sections are heading toward extinction as new ways to engage the virtual public square become more advanced. What the Internet mob does as a result is a whole other consideration.
InfluenceChronicles.Comm -- A new survey says three-fourths of corporate data theft is caused by “insider negligence” -- a nice way of saying “companies that for some reason still let employees do internal email while connected to a free wi-fi service.”
As many companies and politicians learned the hard way, hackers love stealing emails in part because of the whacky fun that ensues when made public. And cybercrooks are becoming steadily more proficient in how they leak e-plunder to mess with the victim’s reputation and operations for as long as possible.
Here's the kicker: More than 60 percent of those surveyed said they have access to company data that they shouldn’t see. "Too many employees have too much access to the company’s most valuable information," said the lead researcher. “Beyond what they need to do their jobs."
Worse still, a third of those companies don’t monitor any of the email their people are sending and receiving, including file attachments.
Change is coming. As the cybercrime epidemic continues, companies and organizations will begin compartmentalizing more information to the old “need to know” standard. How much that mitigates cyber-related reputation risk… We’ll see.
There’s more at The Wall Street Journal Risk Report.
Illustration | My Security World blog: Eight things to stop doing immediately