HURRICANE SANDY AND THE MARATHON

Posted in Crisis Communication Failures, Crisis Management Strategy, Crisis Management Success Stories, dealing with a natural disaster, DECISIONS IN A VACUUM, Doing the right thing, Hurricane Sandy, negative publicity, New York City Marathon, Poor crisis management on November 12th, 2012 by mnayor

One of the most evident communications failures in the aftermath of Hurricane Sandy involved the ING New York City Marathon. Unquestionably the success of the Marathon paled in comparison to the misery heaped on New York (and New Jersey and Connecticut) residents who should of course have received and should continue to receive immediate and effective relief.

 

However, I cannot understand why the Marathon could not have been transformed into a major vehicle for focusing attention on and creating relief efforts for the residents of Staten Island, and The Rockaways, the areas ofNew Yorkthe most severely damaged.  I believe that the event could have been salvaged and made into something extraordinarily constructive instead of seemingly distractive and frivolous.

 

During the week of the storm Mayor Bloomberg kept announcing that theMarathonwould go on. He justified the decision by saying it would be good for New Yorkers. It  would bring the City together and lift everyone’s spirits. He also stated that no resources would be diverted from the relief effort. This comment, although true, was weak in light of the dozens of generators seen being transported toCentral Park  for the traditional pasta dinner, and the numerous port-a-potties being installed near the starting line. Granted these resources were private but it all seemed so selfish. This was crisis management and crisis communication at its worst.

 

What might have happened if the following had occurred? Mayor Bloomberg and Mary Wittenberg, president and CEO of the New York Road Runners (NYRR) jointly announced that theMarathonwas being renamed the Sandy Relief Marathon. The prize money was being donated immediately to the relief effort. The pasta dinner was cancelled and all generators and other private resources were being transferred to stricken areas. All port-a-potties were available immediately to the public. A telethon was being established for call-in donations during the race. All runners were being encouraged to donate their time in the coming days to support efforts. And so on.

 

The perception and the reality of theMarathonwould have been transformed into a humanitarian effort. That’s the way it should have been, instead of being billed as a cheer-leading, feel-good effort. Good crisis management in the Mayor’s Office and the NYRR was lacking. They had the time to make it happen but not the imagination or creativity. The resulting cancellation on the Friday before the event was a fiasco. An embarrassment for both the Mayor and the NYRR. The financial loss to the City is in the untold millions. The damage to the reputation to the event and the Road Runners organization remains to be seen. Certainly the thousands who travelled from abroad to participate now have a bitter taste in their mouths. The most common reaction was – We understand cancelling the event but why wait until Friday. If you had cancelled earlier in the week we could have saved the trip and our airfare.

 

We can only hope that nothing befalls the tri-state area again likeSandy, but if it does more intelligent and creative minds should grapple with a situation like theMarathonand utilize the notoriety of such an event to good and productive use. Obviously it is easier in hindsight to come up with ideas, but doing what’s right, sacrificing certain elements of an event and willingly taking two steps back in order to take one step forward would have burnished the image of the Marathon instead of tarnishing it. Trying to salvage an event in its entirety was and is perceived as putting yourself first. Placing the needs of those devastated bySandyfirst, and sacrificing some of theMarathon’s bells and whistles might have just garnered a lot more respect and kept a version of the race intact. Now NYRR has to renegotiate with product sponsors, ESPN and local affiliate WABC, and the participants themselves. It difficult to envision it coming out a true winner.

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NETFLIX: A GOOD BUSINESS DECISION ON PAPER

Posted in Business Crises We Create, CONSIDER YOUR STAKEHOLDERS, Crisis Communication Failures, Crisis Management Consulting, DECISIONS IN A VACUUM, NETFLIX on September 21st, 2011 by mnayor

You sit around the conference table and throw out ideas. You think outside the box. You think inside and around it. You crunch numbers. The numbers point in a logical direction. You come up with a winning profit strategy that makes sense. You implement the strategy and blow yourself out of the water. Hello Netflix, which recently announced a restructuring that would divide its business into two segments – providing entertainment by mail and by download – at a hefty increase in customer fees.

Business decisions aren’t made in an isolation booth. Stakeholders, stakeholders, stakeholders. Why do businesses always forget some of their stakeholders? The word has become trite; it’s been used so often. Nevertheless the concept just doesn’t seem to sink in for many business executives. Granted, you can’t please all stakeholders all of the time, and certain stakeholder interests may conflict with those of other groups – but the least you can do is be awake.

Stakeholders are any group or even individual(s) whose interests are important to your company and must be served. If a stakeholder interest is not served, it should at least not be harmed especially if harming the stakeholder will harm you. Here are the most common of them: shareholders and/or investors, customers, suppliers, governmental regulatory agencies, employees, the public at large for health and safety issues and finally, even the media. It’s quite a list and of course not everyone can be happy all of the time.

However, management must always try to forecast the effects of its decisions on its stakeholders. What may be an excellent decision on paper may have disastrous results. Enter Netflix. It is difficult to believe that executives of that company gave any heed to the reaction of its customers. And if they did, they wrongly concluded that there would be some grumbling but they could just hunker down and it would blow over.

Blow over? Netflix is facing an angry customer base. Will it face mass defections? Perhaps. Maybe Netflix concluded that it should take the backlash at all once. Perhaps it feels that its new higher prices and a smaller, better quality customer base better suits its model. The risk, however, is that its base will shrink too much and the company’s revenues will decrease dramatically.

What does a company do after it does its homework and knows that a good corporate decision will have adverse consequences for one or more stakeholder groups? It can be a difficult and agonizing decision. One course of dealing, and the one that makes the most sense when considering an elective course of action, is to implement changes in steps. MODERATION is the key. The first benefit is that you can get a handle on reaction. Similar to a test market, you can assess the effects of your action, make adjustments, refine, modify, go to plan B, etc. Secondly, by going slow, you don’t shock the stakeholders who are affected. It’s the difference between giving a stakeholder a rash versus a blow to the solar plexus.

Don’t make decisions with your head in the clouds. Know the effects of your decisions on others, anticipate what the reactions will be and the effects those reactions could have on your company.

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CRISIS MANAGEMENT VERSUS HUBRIS

Posted in Business Crises We Create, Business Crisis Management, Crisis Communication Failures, Crisis Management Services, Crisis Mitigation, David cameron, News of the World, reputation management, RUPERT MURDOCH on July 18th, 2011 by mnayor

Does history merely repeat itself instead of teaching us anything? Based on business news about movers and shakers one could deduce that many corporate executives just don’t get it and never will.

After the debacle of 2008 when many financial CEO’s were caught in the proverbial headlights, you would think that a tough lesson would have been taught – and learned. Instead even Teflon-coated Warren Buffet decided that his power, authority and standing in the world were enough to allow him to initially stonewall the public about his executive Dave Sokol’s purchase of Lubrizol stock. Not to be outdone Rupert Murdoch has raised the bar even higher.

In a scant two weeks his empire, headed by the subtly named The News Corporation, has experienced what many would not wish on their worst corporate rival. After approximately four years of an on-again, off-again Scotland Yard investigation of phone hacking by News of the World tabloid, that paper has folded, Murdoch’s attempt to acquire the remaining interest in British Sky Broadcasting (BSkyB) has been aborted, and a slew of his corporate executives have been arrested, resigned or otherwise had their reputations besmirched. Rebekah Brooks the CEO of News International, the parent of the late News of the World resigned in disgrace, after two attempts at resignation that were not accepted by Murdoch. Also, Les Hinton, publisher of the Wall Street Journal tendered his resignation the same day.

The details of the outlandish accusations are certainly important but how they were handled by Murdoch is equally important and instructive. For a “media” guy, you would think he would know how to handle as big a story as this. Instead, up until yesterday we heard nothing from Murdoch – and then when we did, we heard the hrrumphing of a corporate big-wig instead of the measured pronouncements of a savvy media executive. Last week Murdoch flew to England from the U.S. Very quickly News of the World was closed, after a 168 year life. Yesterday he told a reporter for the Wall Street Journal that the matter was handled “extremely well in every way possible”. He further stated (apparently referring to his upcoming testimony before Parliament’s select committee on culture, media and sport on July 19th at which initially he and his son, James, declined to appear) that he was eager to address things said in Parliament some of which “are total lies”. Finally, he refuted the allegation that he might spin off his newspaper operations into a separate company as “total rubbish”. He did visit the family of Milly Dowler, the thirteen year old who was killed and whose phone was hacked; and extended apologies to the family. This last weekend he placed full page apology ads in British newspapers.

What kind of media executive fails so miserably in handling a business crisis like this? Who leaves a yawning time gap of two weeks before stating anything? If we assume the complete innocence of a CEO, we would then expect that leader to dig for the truth and let the public know immediately. Silence can only foster the impression of knowledge and guilt. An announcement that the matter is being extensively investigated and that such conduct is not tolerated in the organization goes a long way to safeguarding one’s reputation and possibly the organization itself (many pundits found the sudden closure of News of the World suspicious, based on protecting the Murdoch empire from legal liability). There were and may still be ways to staunch the bleeding, but it may now be very difficult to do. Clearly Murdoch did little or nothing immediately. As a result his empire is suffering and will continue to do so, as stakeholders in Britain and worldwide continue to question his tactics and the integrity of his enterprises.

Many people in the newspaper industry who have been interviewed about the phone hacking scandal find it implausible that editors and publishers wouldn’t know about the sources of stories. They must have known about the hacking and therefore it was both a bottom up and top down conspiracy. Rupert Murdoch may have had knowledge and thus the reason for the code of silence to date. It will be interesting to hear his testimony. At all costs he must avoid appearing out of touch with his businesses, imperious because of his power, or delusional that his connections will protect him. From David Cameron on down, the flight to high ground has begun.

Events seem to be gathering speed as this is being written for publication. Rebekah Brooks was arrested and released on bail. The leader of London’s Metropolitan Police Services, or Scotland Yard, Paul Stephenson, and his deputy have stepped down under growing allegations that the respected organization was very cozy with members and agents of the Murdoch empire; and more information is surfacing about David Cameron’s personal relationships and frequent meetings with similar individuals.

As individual reputations begin to crumble, little effort seems to be directed towards salvaging the Murdoch enterprises, some of which are very much worth saving. Placing someone who is untainted in a position of authority would appear to be necessary and Joel Klein would seem to be the man to take charge right now. The businesses must be separated from the personalities and be made to run as business as usual. There is no sense in allowing individuals – any individuals – to drag down an entire business empire. Klein has a good reputation (a lawyer who was head of the New York City School System until he joined Murdoch), and can direct the “clean” Murdoch business units on a steady course until the mess can be sorted out or until it at least simmers down.

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THE SKINNY ON WEIGHT LOSS PROGRAMS

Posted in Anticipating A Crisis, Crisis Communication Failures, Crisis Management, Jenny Craig ranked first, poor reaction to bad press, Slim Fast ranked high, THE RHODELL GROUP, weight loss programs, Weight Watchers reaction to Consumer Reports on May 11th, 2011 by mnayor

Whoa! The news is in. According to Consumer Reports, Jenny Craig is the winner. Based on factors such as weight loss and drop-out rates, Jenny left its competitors in the dust. Slim Fast came in second and Weight Watchers third.

Talk about being blind-sided and needing a crisis plan. This is certainly a classic case in point.

Crisis planning is sometimes looked upon by companies as seriously as a fire drill – and by employees as akin to root canal work. We don’t have the time! I could be doing something that affects the bottom line, not this stuff! The excuses go on and on. But brainstorming potential crises is the starting point and competitive reviews ranks high on the list.

So it was surprising to read the reaction of Weight Watchers. There is rarely room for sour grapes in responses to less-than-favorable news. Word-smithing is the ability to get your messages and facts across clearly without sounding like you are whining. Weight Watchers failed.

Instead of exclaiming that it was disappointed that Consumer Reports left certain key points of the JAMA (Journal of the American Medical Association) study “were left unsaid” the Company’s statement should have begun with what it believes its program does well: WW advocates and teaches how to live in the real world – people learn to make smart choices etc. It should then have stressed how proud it is of its long history, its success in changing the lives of countless individuals. It should have stated that everyone should recognize that most people cannot afford the luxury of having food prepared for them daily and its program is a much more realistic approach to weight loss. Finally it should have underscored that clinical data on its new PointsPlus Program will be published shortly, that it looks forward to the conclusions of the data and are confident that this study, along with over 60 other WW studies will once again show the extraordinary effectiveness and success of the Weight Watchers program for millions of people.

The Consumers Report story was an opportunity for WW to blow its horn. The media wanted to hear what it had to say. Instead they just blew it. Slim-Fast, which actually came in second with its snack bars and shakes, capitalized on the story. It was “thrilled to once again be ranked among the top U.S. weight loss plans evaluated by Consumer Reports”. It then went on to describe its 3-2-1 Plan and invited people to check them out on Facebook and website. Slim-Fast believes in itself.

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WHAT TYPE OF RESPONSE DOES YOUR CRISIS NEED?

Posted in Crises Communication, Crisis Communication Failures, Crisis Communication Response, Liability Communications on November 10th, 2010 by mnayor

On November 4th, a Rolls Royce engine on a Qantas A380 Airbus blew apart near Singapore. While there were no deaths or injuries there will likely be financial consequences to the three main players in this story: The Australian airline itself, Qantas; Airbus, the pan-European aerospace company; and Rolls Royce Group, plc the manufacturer of the Trent 900 engines.

There has been much press about the incident and the consequences would appear to be a direct function of how quickly the problem is diagnosed and resolved. Qantas and Rolls Royce are both busily inspecting and analyzing specifications, tolerances and operations that could affect performance.

Because Qantas has the most direct relationship with passengers, it has been the most visible and, seemingly, the most direct and quickest in taking action in this crisis. It has taken its fleet of six A380’s out of service at least temporarily and has made major efforts to redeploy aircraft around the world. Additionally it has provided its passengers with a multitude of assistance in order to avoid as much disruption as possible. Its website has detailed instructions to aid passengers.

Rolls Royce made a statement on November 4th and published it on its website.It stated that safety was its first priority and calmly explained that it has “well established processes to collect and understand information relating to the event and to determine suitable actions”. It then finished with a list several self-serving statements about how terrific the company is, the most recent expenditures on R&D, its revenues and its order book. Its November 8th statement advised that it was working closely with Airbus, and that the incident was unrelated to any of its other engines. While the statements exude a coolness and stiff upper lip mentality that Americans are not quite used to, they also reflect competence and a no-nonsense approach that should reflect well on the company, if it is able to determine and fix the problem in a matter of days.

Finally, turning to Airbus itself, the manufacturer of the A380, a search of its website uncovers nothing. There is a highlighted special report on the latest updates on the WTO Boeing-Airbus dispute but no reference to the Qantas incident. The Press Centre tab brings up many articles, all good, about Airbus. A search of its website does not uncover one mention of the incident.

Three different companies, three different types of response. And perhaps rightly so. Obviously, the closer to the consuming public the more urgent the need for a corporate public response. In the case of Qantas there are passengers who need to be immediately tended to. And potential customers need to be considered. One step down is Airbus whose customer base is the airlines themselves, a much smaller market in numbers. At the bottom rung is Rolls Royce whose customer base is tiny. The bottom line is that crisis communication has to be tailored to the complexity of the situation, a company’s responsibilities, and its stakeholders. Crisis communication is not one-size-fits-all. Less communication and more technical expertise and greater effort to solve the problem would have been far more preferable in the BP Gulf oil spill debacle.

Rolls must make good. Qantas can always buy different planes, although it might take awhile. Airbus could always buy different engines, although that could take awhile. Both Qantas and Airbus could suffer financially in the process but can always rebound. But Rolls will certainly suffer the most if it doesn’t fix the problem fast. Strange that it would be criticized for its lack of communication at a time when 100% of its energy appears to be devoted to fixing the problem, as reported by The Wall Street Journal writer Daniel Michaels, on November 9th. Crisis management is more than communication. If Rolls Royce makes a quick diagnosis and resolves all issues expeditiously, it should be praised for its efforts.

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WHAT REALLY CONSTITUTES A BUSINESS CRISIS

Posted in Business Crises of our own making, Business Crises We Create, Crisis Communication Failures, Crisis Communication Response, Crisis Communication Strategy, new customers at the expense of old customers, What is a Business Crisis on October 5th, 2010 by mnayor

 A business crisis can be anything that can negatively effect a company’s reputation or bottom line. Many events at first blush may not appear to be serious. HP’s firing of Mark Hurd and the subsequent entanglement with Oracle was not a big deal in the scheme of things, even though internally it must have been a shocker. However, the death or resignation of a key person in any organization could very well be serious for any company depending on just how key that person really was. Natural catastrophes, product recalls, labor disputes, computer data losses. The list is endless. Some are temporary. Some can cause the demise of a company. Most can be handled with honesty and the realization that it may be necessary to absorb losses over the short haul in order to achieve a long and healthy business life.

Two distinct categories of crisis need to be recognized. In one we lump all those events over which we have no control, such as product tampering by outside forces or natural disasters. Even in these situations there are always some actions we can take: tamper-proof packaging, liability insurance, proper protocols. But generally these events can blind-side us.

The second category contains all those events that might have been avoided had we chosen to take the actions necessary to protect ourselves and the public. Some are obvious. We look at the BP oil spill and see things that surely could have been done.  Other events are not so obvious and these are the ones that can be insidious. When a management believes it is doing the right thing but in fact is fueling a potential crisis we have the makings of a catastrophe. A couple of examples will make this abundantly clear.

Market share is usually very important to a company, oddly sometimes more important than the bottom line. There is always great competition for new customers. Many times the efforts and resources devoted to advertising, marketing and selling to new customers are at the expense of a company’s loyal  customer base. This can even be seen at the local level. Where I live heating oil companies consistently offer new customers a deal for the first year in order to lure them in. This, of course, is done at the expense of old, loyal customers who have to make up the slack. The result is that many savvy oil customers these days do a lot of shopping each year to find the best deal. Loyalty is a thing of the past. On a national level the problem has gotten even more serious. A recent financial story in The New Yorker last month observed that there is almost universal recognition that customer service in this country has deteriorated. Such service is considered a “cost”. Companies are looking for the customers they don’t have so they are willing to spend on marketing and advertising but are not as interested in adding to their costs of service. The article made it sound a little like cynical dating. Companies are interested in luring you in but then once they have you, they don’t quite value you as much as the next potential customer they want to corral.

Lack of service is not just a pain for helpless consumers. In this internet age they can do something about it. This is how a company can sow the seeds of its own destruction, and inexorably create its own crisis. Companies and their products and services are being rated on the internet and consumers don’t hold back. They tell it like it is. Granted, competitors may be planting some of these negative comments but for the most part product and service evaluations are being taken at face value. The moral of the story: be faithful to those who brought you to the dance, or the consequences could be severe.

Another form of self-inflicted crisis involves weathering the storm. Whether in politics, professional sports, or in business, “players” still believe that because of their importance they can ride out any issue or problem. They can’t. We can all easily tick off a dozen or so examples, but the latest is surprising. Johnson & Johnson has recently gone through a spate of recalls of tainted children’s Tylenol and Motrin. The Company has generally kept a low profile and even contracted with a third party to buy up Motrin off retail shelves rather than announce an actual recall. And for the last decade it has been settling with claimants for a variety of injuries and death allegedly due from Ortho Evra, a contraceptive patch made by its subsidiary, Ortho McNeil. It appears clear that the current management of J&J has not followed in the footsteps of the management that handled the Tylenol crisis of 1982 which is often cited as the quintessential example of crisis management in modern corporate history. Back then cyanide had been found in bottles of Tylenol in the Chicago area. J&J immediately issued public warnings, issued a product recall, created tamper-proof packaging, and before long was back in business. The Company was up-front and willing to bite the bullet in the best interests of the public. Unfortunately that does not appear to be the philosophy today. There is clearly a danger in believing one’s invincibility. The trust and respect of the public is at stake, and once lost, is very difficult to retrieve.

A crisis is not just the obvious explosion at a plant or a mine. Companies can and do create their own crises. Companies must evaluate their philosophy, their strategy and their honesty. They must take action to minimize their vulnerabilities but at the same time be prepared to take action in the best interests of the public if they value company longevity.

Originally published in the Management Help Library of  http://managementhelp.org/blogs/crisis-management/2010/10/13/what-really-constitutes-a-business-crisis/

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JOHNSON & JOHNSON: CRISIS MANAGEMENT IN FREE-FALL

Posted in Business Crisis Management, Crisis Communication Failures, Crisis Communication Response, Liability Communications on October 5th, 2010 by mnayor

 The Today show on September 21st dusted off a fairly old story. Ortho Evra, a birth control patch introduced in 2002 and produced by J&J subsidiary Ortho McNeil was in the news again. Since the time of its introduction the patch has been the subject of thousands of court complaints. The product allegedly has the effect of causing deep vein thrombosis, pulmonary embolisms, heart attacks, strokes and death, all stemming from the fact that it can deliver twice as much estrogen to the body as regular birth control pills. J&J has received years of bad press about this subject. No claim has ever gone to trial and J&J continues settlements that total many tens of millions of dollars.

 The Today show reported that it had recently uncovered a 2005 resignation letter from a former J&J vice president saying that he could not remain in his position knowing the high levels of estrogen delivered by the product. The show also reported that another former vice president was suing the Company for wrongful termination based on his whistle-blowing efforts even before the product was introduced to the public.

 Now switch gears to J&J’s non-prescription products. Over the last year, the Company has gone through a slew of product recalls, including infants’ and children’s Tylenol, for reasons including contamination and the presence of foreign matter. The Company also conducted what is termed a “phantom” recall of Motrin by hiring a third party to buy up the product on store shelves in order to avoid adverse publicity. J&J maintains that it did so under an agreement with the Food and Drug Administration. The House of Representatives investigated the recalls, and questioned the alleged agreement with FDA when it heard CEO William Weldon at the end of September. Weldon acknowledged at the hearing that J&J had let the public down by not maintaining its high standards. An F.D.A. official testified that the Company had an inadequate quality system at a number of its facilities. One lawmaker declared that J&J’s failures would mar its reputation for years.

 J&J’s 1982 handling of the Tylenol scare is often cited as the quintessential example of crisis management in modern corporate history. Back then cyanide had been found in bottles of Tylenol in the Chicago area. J&J immediately issued public warnings, called a product recall, created tamper-proof packaging, and before long was fully back in business. The Company was up-front and willing to bite the bullet in the best interests of the public. Unfortunately that does not appear to be the philosophy today.

J&J’s website states that “The values that guide our decision making are spelled out in Our Credo. Put simply, Our Credo challenges us to put the needs and well-being of the people we serve first.” Maybe so, but it appears as if a new breed of management has taken the reins at J&J – new cutting -edge types whose sole concentration is on the bottom line. Yet it might be this competence and cool business efficiency that will have the effect of undermining the extraordinary 120 year old reputation of this venerable institution. The abilities of current management must be tempered with sensitivity and responsibility to the public in order to salvage and maintain the invaluable good will of one of America’s great corporations. Hopefully the lessons learned will again set management on the right course.

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BP’s TROUBLES

Posted in Anticipating A Crisis, Corporate Crisis Management, Crisis Communication Failures, Crisis Communication Implementation, Crisis Management, Crisis Management Planning on May 18th, 2010 by admin

When it rains, it pours. So many crises involving nature. Volcanic ash. Bubbling oil. I have very strong hopes that the earth doesn’t crack open. Disasters of this nature make one feel that protecting a corporate reputation is not all that important in the total scheme of things. But protecting a reputation is very important – as long as the entity being protected is worthy of the effort.

BP in general has manned-up. It has acknowledged its responsibility (at least in part). It has gone before the public almost daily it seems in order to give status reports. It is trying many different schemes to cap the oil gushing into the Gulf. Yet, it is the butt of jokes and is not coming off as a responsible corporate citizen. Something is lacking. Read more »

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GOLDMAN SACHS PART II

Posted in Crisis Communication Failures, Crisis Communication Strategy, Crisis Litigation, Legislative Advocacy, Liability Communications, Litigation Communications on April 29th, 2010 by admin

Being sued is one thing. Hopefully you can defend yourself. Proving your or your company’s innocence can be a full-time job. A good defense not only saves you money – damages, including punitive damages – it also saves your reputation. In fact, the costs of litigation, as high as they are, can, in part, be chalked up to the cost of good public relations. Guilty parties, however, pay the price.

Read more »

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GOLDMAN SACHS PINSTRIPES TO PRISON STRIPES

Posted in Crisis Communication Failures, Crisis Communication Response, Crisis Litigation, Liability Communications, Litigation Communications on April 29th, 2010 by admin

I’m only kidding. I don’t think any of them will go to jail. They are smart. And they are wily. They did terrible things, low down and scurrilous, greedy, selfish, un-American, with the best interests of themselves at heart – but NOT ILLEGAL.

Years ago capitalism meant something. Something constructive and creative. Today the meaning has been reduced to “getting yours”, no matter what the cost is to others. Getting yours often means selling thin air, creating nothing and selling it for a premium. And that is what Wall Street often does. It creates “products” – financial products that create nothing. The products are nothing more than new casino games people can bet on. And Goldman created many, especially ones that let some of their clients bet against the U.S.A. Now Goldman says it gave its clients what they wanted. I doubt it. It’s hard to envision clients coming up with these schemes and asking Goldman to create the vehicles. Easier to envision is a group of Goldman players sitting around a conference table kicking ideas back and forth about what they think they can sell.

But, I digress. The point is that Goldman is in crisis mode. The players have been severely criticized for bobbing and weaving before the Senate and not being forthright and not admitting their culpability. But hold on. Individual members of the firm and the firm itself have been sued. This situation perfectly demonstrates the conflict that often arises between a company’s legal counsel and its PR people.

Wouldn’t it be nice and perhaps even productive if Goldman threw itself on the mercy of public opinion. We are a forgiving nation. We love it when someone or some thing is brought to its knees. We then go on to the next biggest thing on the national agenda. We have short memories. But what’s a company, individual or non-profit to do when litigation or administrative sanctions are staring them in the face. There are a few things: deny outright, regret the situation but make no admission, blame someone else, plead ignorance, admit some unintentional mistakes were made, etc. None of the options are particularly pleasing. Two were in plain sight at the Goldman hearings: outright denial that anything wrong was done, and secondly, admit fuzzily that some mistakes may have been made. But certainly no one wanted to get his you-know-what caught in the wringer, or be responsible for the downfall of his employer or former employer.

The moral of the story for crisis management is that, depending on the circumstances, one must be very careful. Legal advice that is tantamount to “No Comment” or “I can’t discuss this because it is in the courts” may at times have its place in crisis management. P.R. and marketing types are not always right and neither are the lawyers who are protecting a client’s interests. But there are often ways to take advantage of situations – to explain, to be contrite, to regret situations, all without admitting liability. It’s up to you, the individual client, to weigh the advise and find the intelligent path that both protects you and your company’s interests and at the same time deals constructively with the crisis and public perception.

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