COSTA CONCORDIA: A CRISIS WAITING TO HAPPEN

Posted in cruise industry, sinking ship on January 18th, 2012 by mnayor

“The public has a short memory. We might have some concerns for a few weeks. But so far, we have had no fallout.” So says Neil Gorfain CEO of the Cruise Outlet a booking agent, commenting to the New York Times about the reaction to the partial sinking of the cruise liner, Costa Concordia, off the coast ofItalylast week.

How is the world ever going to become a better place, how are companies going to become more responsible, how are the lives of individuals going to improve if this observation is true? Have we become so immune to tragedy that, after the initial shock waves, we all just go back to our normal routines and in time we forget? The short answer is yes, we do forget. The BP explosion in the Gulf of Mexico, the tsunami inJapanare already only vague recollections. Are there people now diligently working on better drilling safety? On better nuclear plant safety? Let’s hope so. After all, people died.

 Carnival Lines, parent of the Costa Lines, has felt the backlash. Its shares dropped significantly in theU.S.on the first day of trading after the partial sinking. Crisis management on the part of Costa Lines has been weak, amounting basically to shrill accusations of negligence against the ship’s captain, Francesco Schettino, in guiding the ship too close to shore. While the blame game does take some of the heat off of the company, it underscores the weakness of management control and loose cruise industry regulations. A more intelligent and responsible reaction would have been for Carnival and Costa to both hammer home the need to thoroughly investigate every aspect of the tragic accident, including human error, in order to identify every possible cause; and to pledge to take whatever steps necessary to ensure that nothing like this is ever repeated. Expressions of deep regret, which are not automatically interpreted as admissions of guilt, are in order as well.

 As an immediate step, the public needs to know that a company recognizes itself as the major player, willing to undertake that role for the public good. Expensive? Perhaps. Worth it? Most often a resounding yes, in terms of public perception and goodwill. As a responsible corporate citizen, act sensitively, investigate and devote whatever resources available to help fix the problem and keep the public informed regularly along the way.

 Preserving reputation and directing efforts to problem-solving are the first order of business. Assessing blame comes later and is best left to third parties. No one ever looks good saying it is someone else’s fault. An insurance investigation, a public hearing, a regulatory investigation, a private investigation that is made public are just some of the opportunities you have to provide input to show the root causes of a crisis. Let a neutral source absolve you of blame. In the end it carries far more weight, and is more persuasive and acceptable.

 Could Carnival and Costa avoid tragedies like this? Could the industry do something about it? Yes, on both counts. With sophisticated GPS navigational systems available, every cruise line can and should monitor its ships on the water as closely as planes are monitored in the sky. 

The cruise industry has over 12 million passengers a year and deals with many issues such as health and environment matters, safety, security, and employee conduct. The industry has far to go to achieve a high level of public acceptance and respect.

 Recent public concerns reached a point that The Cruise Vessel Security & Safety Act of 2010 (sponsored by Representative Doris Matsui D-CA and Senator John Kerry D-MA) was passed and signed into law by president Obama. The legislation primarily covered passenger safety from assaults. Cruise Lines International Association (CLIA) the industry’s trade association, devoted significant resources to unsuccessfully counter the legislation, and believes the industry can better handle matters by voluntary compliance. Yet the public has seen only attempts to stone-wall needed improvements. Because of Costa Concordia there is renewed call for stricter regulation. CLIA, dedicated to promoting and growing the cruise industry, will certainly be very active in countering future regulatory and policy developments.

 As responsible corporate citizens companies themselves need to do more to enhance their own reputations. They must become more proactive to sustain and augment their “brands” and corporate reputations. The public perception is that cruise lines are not transparent. Even after a crisis event has passed, a company is more apt to stay mum than to discuss its actions, thereby fomenting the idea that secrecy is the order of the day.

 Major efforts by the industry and individual companies to ensure all aspects of passenger safety, are vital to instill public confidence and customer loyalty, and to grow. Unquestionably, proactive management needs to implement continual training, accountability and monitoring.  Otherwise the call for renewed government regulation will rightly escalate.

 

 

 

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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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CRISIS MANAGEMENT AND THE BLAME GAME

Posted in Business Crisis Management, Crisis Communication Implementation, Crisis Communication Response, Crisis Communication Strategy, The Blame Game on October 5th, 2010 by mnayor

Over time, crisis management pundits have considered many types of responses to a crisis and have sometimes recommended actions and reactions that today seem out of step with effective solutions for most crisis situations. These out-of-step solutions fall into two categories: 1) stonewall the media and the issue will eventually die without you fueling the topic; and 2) a strong defense is a good offense, namely attack the accuser, deny the issue or point the finger elsewhere.

In today’s media jungle, stories don’t die. If something doesn’t pass the smell test, someone in the media is going to pursue it. Ignoring a crisis by ignoring the media doesn’t cut it. And if the media doesn’t pick up on an issue, the public certainly will, via Facebook, U-Tube, Twitter or some other yet to be invented faster-than-light communications vehicle.

In times of crisis most corporate managements would prefer to avoid the limelight, deal with its issues, solve its problems and escape negative publicity. Understandable, but dealing with a major crisis like an ostrich is terribly risky and makes a company look like it’s not owning up when the crisis is exposed.  

So let’s assume you are willing and able to deal head-on with the public. Most senior executives are used to being in control. They pull the levers, call the shots and aren’t used to being told what to do. There is a tendency to be defensive. “I nurtured this baby, I grew it and I know how to defend it”.  The reaction often lacks finesse. Instead of appearing open, the reaction is authoritarian. Instead of appearing honest, the reaction is defensive and oftentimes gravitates towards the blame game or, just as bad, the rationalization or justification game. 

All of these “public” reactions can hurt your organization, because you will have missed the point. There is a problem. Acknowledge it. The problem has ramifications. Acknowledge them. No one is interested in finger-pointing or excuses, even if you are correct. There is time for that.  Don’t act like the whiney school kid or the weasel that can’t or won’t take responsibility. The public expects companies and organizations to man-up. Period. Man-up and get moving so the problem can be fixed. The public respects organizations (and their spokespersons) that emanate competence and authority.

When BP went to Capital Hill to testify back in May, 2010 they were joined by Halliburton and Transocean, Ltd., two of BP’s subcontractors. All three looked foolish because of the finger pointing and denial that ensued. What to do?  Act like a responsible citizen whether you are at fault or not.  A responsible citizen acknowledges the problem and positions itself to take whatever action it can to help fix it. It investigates and determines the best course of action based on its expertise. The public needs to know you are responsible citizen. You convey that when you take immediate, competent action.

But what if you are not to blame? If you aren’t, good for you. It will come out in the end but as an immediate step the public needs to know that you recognize yourself as a player with a role, and that you willingly undertake that role for the public good. Expensive? Perhaps. Worth it. Most often a resounding yes, in terms of public perception and goodwill. If you are to blame the same holds true. Your legal team and your insurance advisors may have made it clear that you cannot say anything that admits culpability. Even so you can act as the same responsible corporate citizen as you would if you were not to blame. You can act sensitively, you can investigate and you can devote whatever resources you have to help fix the problem and keep the public informed regularly along the way.

Preserving your reputation and directing your efforts to problem-solving are the first order of business. Assessing blame comes later and is best left to third parties. No one ever looks good saying it is someone else’s fault. An insurance investigation, a public hearing, a regulatory investigation, a private investigation that is made public are just some of the opportunities you have to provide input to show the root causes of a crisis. Let a neutral source absolve you of blame. In the end it carries far more weight, and is more persuasive and acceptable.

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