Corporate crisis communications

7/30/2019 Corporate crisis communications

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Chris Nelson3 May 2012

2012 Christopher Nelson


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Understand how issues work

Get your company to integrate its approach

Know your critic and what they really want

Recognize your credibility deficit Stick to your knitting

Look at the issue in the context of yourbusiness: whats the real impact? Financial impact

Audience perceptions

Ability to create customers over time



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Business Government

People

Consumers

Voters Employees /

Workforce

NGOs / Activists


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When stakeholder expectations divergefrom organizational reality

it can generate indignation that gains tractionas people with similar feelings come together



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In any democracy, business exists only with amandate from the public

Economic democracy is effective



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PublicCompany



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PublicCompany

Plaintiffs Attack Company

Voters Push Congress

Competition ChasesCustomers

Activists PressurePartners, BusinessCustomers, And

Consumers

Activists BoycottBanks

Activists Buy Shares /Introduce Resolutions



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Social / political forces that grow toundermine a companys public mandate

and ability to do business.



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Many forces influence therelationship business haswith its stakeholders

Trends take root and

change perceptions overtime


Political Social

Economic


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Monitor Trends &Stakeholder Perceptions

Sales data Business metrics Customer service data Competitive intelligence Analyst reports

(esp. industry reports) Consumer research Internet, news media,

opinion leaders Legislative, regulatory,

and legal developments Activist priorities



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Monitor Trends &Stakeholder Perceptions

Sales data Business metrics Customer service data Competitive intelligence Analyst reports

(esp. industry reports) Consumer research Internet, news media,

opinion leaders Legislative, regulatory,

and legal developments Activist priorities

Constantly ReviewBusiness Operations

Omnipresent business risks(ERM analysis)

Corporate strategy shifts Esoterics


Plan Against Scenarios

State of the business in threeto five years

Potential shifts in mindsets Multiple outcomes of key

initiatives


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Create a multidisciplinary team

Sensitize leaders to importance of issuesmanagement develop anticipatory mindset

Gather information from every corner of company Push information on sensitivities, issues, and

allegations



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Create a multidisciplinaryteam

Regularly review state of issues

Establish corporate policies Create leadership

positioning

Create strategies to close gaps

Drive stakeholderunderstanding

Report quarterly to CEO


IM Task Force Agenda

News: big issues stories this monthDevelopments on top-tier issues

Revise impact scenariosAssign to dos

New corporate policies / policy updatesStrategy discussion (if necessary)Sensitive business developments

Report from all departmentsNew issues identified

Discuss scenariosPrioritize / Assign to dos

New info from ally groups & GR Issue preparedness needsWhat does our CEO need to know?


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Issue Begins to Develop

Critic GroupOrganization

Some Stakeholder Action

Growing Stakeholder Adoption

BroadStakeholderConsensus

Critic Group ActionIssue Escalation

IndustryCompliance

LegislativeResolution



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Now issues can gainnational prominence and

political power almostimmediately

This used to take12 years


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IndustryCompliance




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Some stakeholder expectations not metby organizational reality



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Catalyzing events

New issue champion self appointed

Shift in advocate/NGO group focus

Customer complaints

Customer service

Independent websites, blogs, Twitter

Trend data suggest shift in direction



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Begin initial analysis

Identify scenarios for business impact

Assign a priority level

Potential for escalation / speed Potential for impact

Determine next steps

Begin issue tracking



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IndustryCompliance




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Several people arrive at similar dissatisfaction

Information sharing leads to unity

A leader steps forward

Community organizer Citizen journalist/crusader

Professional activist

Lawyer

Politician



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Determine nature of the organization Concerned citizens

Moderate special interest

Dyed-in-the-wool attacker

Review past tactics and campaigns

Forecast potential issue scenarios

Identify opportunities for dialogue and/or

compromise



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IndustryCompliance




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Negative

Media

Inquiry

Immediate

Corporate Response -

Thats not true.

Stakeholders/

Advocates Find

News Hook

Victims

Villains

Visuals

Drama

2010 Ketchum Issues & Crisis Management


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Victimized

Stakeholders

Superficial

Corporate Denial -

No Real

Concern

Profit Motive -

Business As

Usual

Hidden

Practices

Exposed

Verdict:

Guilty!



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Negative

Media

Inquiry

Immediate Response -

Were concerned. But,

look what were doing

to be leaders

Stakeholders/

Advocates Find

News Hook

Customer Service

Consumer Education

High Workplace Standards

Science/Tech and Safety Leadership Risk Management / Continuous Improvement

Positive Media Coverage

Third-party Allies



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Maintain the high ground

Commit company resources Shape trends, understanding

Build consensus and commitment Identify mutually workable resolution,

where possible

Preempt flashpoints

Play your game, not theirs



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IndustryCompliance




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Driven by legislative or regulatory body

Resolution will benefit key constituents(not often the company)

Diminished opportunity for gains

Forces company into defensive posture

Often very high profile



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With any luck: You never get to this point or

Youre driving strategically beneficial legislation

Ongoing work to build consensus aroundcorporate policies among pols and regs

Reinforcement of leadership positioning of thecompany



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IndustryCompliance




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The game is over

Only one remaining option

Live with the law/regulation

Produce goods or services to meet dictatedstandards rather than company standards

Endure financial burden: skinnier margins

Evaluate overall damage to reputation



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Re-evaluate trends

Review initial scenarios

Measure stakeholder perceptions

Determine new options for issue actionprogramming



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Understand how issues work

Get your company to integrate its approach

Know your critic and what they really want

Recognize your credibility deficit Stick to your knitting

Look at the issue in the context of yourbusiness: whats the real impact? Financial impact Audience perceptions

Ability to create customers over time



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Poor Demand /Consumer

Uncertainty

ShareholderActivism



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All company actions

Executive Compensation

Force Reductions

Capital RaisesLabor Negotiations

Lobbying

Litigation

Proxy Contests

M&A

Bankruptcy

are being judged against anew standard by:

Congress

The Administration

Regulators

Shareholders/Activists

Employees/Unions

NGOs/Special Interests

Media

Plaintiffs Bar



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People severely disenfranchised Massive distrust of those in power

Consumers feel bad

NGOs fighting to regain tractionon big priorities of last decade

Environmental issues: nowfocused on local and tangiblegoals

Emergence of corruption issues

Support for dictators

Bribery / FCPA Workers rights

Child labor

Land grabbing

Rise of populist movements


Some Influences

Regulatory uncertainty

Deadlocked government

(Tea Party effect)Presidential elections

Slow NGO donations

Focus on:

Hard economic issuesLocal, tangible issues

Frustration


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VW: EU carbonemissions standards

Mattel: AsiaPulp & Paper

Toxic chemical release inmanufacture of clothing

Nike, Adidas, Puma, and H&M have folded



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Rising entitlement costs

Deficit spending

Aging populations

Increasing preference for

locally grown food; shift away

from factory farming

Fragmentation of journalism

Evolution of social media

Societal impact of video games

Increasing conflict between

open source and proprietary

technology Global migration to cities

Increasing religious tension

Increasing skills gap not

enough well trained workers

available and too many

structurally unemployed

Increasing prominence and

power of multinational

corporations Increase in transnational crime

Critical Sustained Trends Water security

Human rights

Arab awakening

Business social contract

Nanotechnology

Synthetic organisms

Geoengineering

Land grabbing / rights of

indigenous peoples

Socially responsible tourism

Food pricing, availability

Sustainable food production Fishing / Cocoa / Coffee

Energy consumption in

food production

Use of cooling agents

Plasticizers

Obesity / soda / HFCS

Asthma / allergic diseasesMultiple-chemical

syndrome

Microbial resistance

Pesticides

Preservatives

Phthalates

Economic issues

Jobs / stimulus

Taxation / tax dodging / tax

abatement / cash repatriation

Entitlement costs / austerity

Currency fluctuations

Financial stability / systemic

risk and interdependence

Cost cutting on activists

priority programs

Populism

Privacy / data security Energy

Deep-water oil exploration

Fracking, oil sands

Nuclear safety

Immigration

Workers rights / unions

Public sector

Private sector

Child labor

Homeland security

Healthcare financing

Housing finance

Energy

Fossil fuel dependence

Climate change / carbon emissions

Wind farms

Corporate governance / executive

compensation

Intellectual property

Intl legal framework

Piracy (esp. developing world) GMOs crops, animals, labeling

Environment

Biodiversity loss

Deforestation, palm oil prod.

Facility sites dams, plants, etc.

Corruption / FCPA

Diversity / multiculturalism

Corporate political involvement

Health issues Drug research ethics

Drug access / shortages

Drug marketing

Commercial education

Gambling social impact

Endocrine disruptors

Animal welfare

Humane agriculture

Animal research Marketing to children

Emerging



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Whats To Come?

Populists: frustrated,fragmented, and then focused

Activists adapt to austerity

2012 elections

Social media evolution

Recession will end & NGO

donations will reboundThe Giving Pledge


Some Influences

Regulatory uncertainty

Deadlocked government

(Tea Party effect)Presidential elections

Slow NGO donations

Focus on:

Hard economic issuesLocal, tangible issues

Frustration


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Chris Nelson3 May 2012

Corporate crisis communications

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