Mar 23, 2009
Crisis Management and Transpromo
By Scott Gerschwer
Golden lads and girls all must As chimney-sweepers, come to dust. ---W. Shakespeare, Cymbeline
Two completely unrelated stories struck me this week as being worthy of mention: the AIG bonus flap and the untimely death of Natasha Richardson.
In the latter, a beautiful and successful young actress from a prominent theater and film family tragically died after a skiing accident on the beginner slope at a ski resort in Canada.
Here’s the statement from Mont Tremblant Ski Resort:
MONT-TREMBLANT, QC, March 17 /CNW Telbec/ - Yesterday, March 16, actress Natasha Richardson fell in a beginners trail while taking a ski lesson at Station Mont Tremblant.
She was accompanied by an experienced ski instructor who immediately called the ski patrol. She did not show any visible sign of injury but the ski patrol followed strict procedures and brought her back to the bottom of the slope and insisted she should see a doctor.
As an additional precautionary measure, the ski instructor as well as the ski patrol accompanied Mrs Richardson to her hotel. They again recommended she should be seen by a doctor. The ski instructor stayed with her at her hotel. Approximately an hour after the incident Mrs. Richardson was not feeling good.
An ambulance was called and Mrs. Richardson was brought to the Centre Hospitalier Laurentien in Ste-Agathe and was later transferred to Hôpital du Sacre-Coeur.
Most of the meta-media coverage has focused on the ghoulish media outlets that rushed to proclaim the young actress dead. (Time Out New York provided the Shakespeare quote above as part of their premature eulogy). But what struck me was how well the ski resort positioned themselves vis-à-vis their culpability in the tragedy.
Later reports have surfaced about paramedics being turned away and it’s anyone’s guess how it will all turn out, but their PR people were Johnny-on-the-spot when it comes to getting their story out quickly, firmly stating that they followed correct, established procedure and were not at fault in any way.
In contrast, both the US government and AIG blew it bigtime when talking about the Bailout Bonus debacle.
During a financial crisis of this magnitude, at a time when millions are out of work and the taxpayer-financed bank bailouts are a tough enough pill to swallow, the idea that taxpayer money is being used for bonuses for these banksters--the very people who caused the recession to begin with by selling phantom financial vehicles….well, it’s an outrage. Edward M. Liddy, AIG’s chief executive officer, claimed that the bonuses were necessary to attract and retain the best talent. Say what? These people aren’t just lucky to keep their jobs, they should have to pay back their salaries; they are fortunate that the guillotine is out of fashion.
Next, Liddy claimed that the bonuses were a contractual obligation. Then, after more outrage, he claimed that he was asking them to return half of the money (as if bank robbers only leaving with half the loot were on solid moral footing). With typical perversity, Rush Limbaugh defended the bonuses as peanuts and claimed that the recipients—all Democrats—would be kicking a share of it back to Obama. Look up Strawman in the dictionary and you’ll see a photo of Rush.
The incompetence of AIG’s message meisters at handling messages allowed Congressman Paul Hodes (NH) quipped that AIG stands for “Arrogance, Incompetence and Greed.” They allowed Senator Chuck Grassley to say that AIG. execs should follow the Japanese model and “resign or go commit suicide.” (since retracted, but communication is irreversible). They allowed Congress to do what Congress does best—create a new tax (this one taxing only on the bonus babies)—which is actually more scary than the crisis itself. Even with the populist sermonizing, Congress could use better message management and those responsible for the language that allowed this to happen should be called before the voters. My own state’s Senator, Christopher Dodd, is going to be first on the hit parade. Mike Critelli, your state needs to you run for US Senate.
The Obama Administration also could have done better. On a Sunday morning talk show, Treasury Secretary Timothy Geithner said that, based on lawyers’ advice, he could not stop the $165 million in bonuses. On Monday morning, the president said he had directed Mr. Geithner to find a legal way “to block these bonuses and make the American taxpayers whole.” Talk about not being on the same page…Once again, Geithner looked incompetent and in over his head.
Crisis communication should be clear, consistent, concise, timely and simply stated so it can be easily understood by all stakeholders. When a crisis occurs, full and timely disclosure is essential. The drip method often favored by steroid-pumped athletes and Washington insiders only prolongs the agony and undermines credibility.
Part and parcel with consistency is the idea that ALL stakeholders should be informed simultaneously. Bad, and sometimes inaccurate, news moves fast. Best get out a message that is a clear statement outlining what has happened, what your role in it was, and what you plan to do about it. If you know what it means for various stakeholders, make it clear and make it short. Use the same message consistently, even if it feels overly repetitive. When you feel you can’t possibly say the thing one more time, they are just beginning to get it. And when the press calls, talk them through it slowly and clearly, answer all their questions and email them a copy of the PR.
On this last point, there is some good news. PR professionals have long understood that the press is not your friend, regardless of how friendly it may act. The reporters job is to get a story on page one. Luckily, although you do need the press, you can reach out to more and more people directly these days (without, as Sarah Palin would say, the filter of the mainstream press). Social networks, blogs and other forums are available to disseminate news directly to the people without a two-step flow.
Which brings us to Transpromo.
One of the vehicles available to companies seeking a fair hearing outside the mainstream media are sent out everyday. Bills, statements and other transactional statements can be used for the Big Mea Culpa, and not enough companies take advantage of this.
Crisis communication management is critical; it can mean the survival of your business.
The PR giant Waggener Edstrom conducted a survey that indicates that financial-service institutions are not communicating — or are not communicating well — with stakeholders.
Waggener polled 1,000 consumers and found that “many said they are not even hearing from their own banks.” Here are some key numbers.
- 44% said they heard something from their financial-service institutions, but felt more negative about the industry afterward.
- 38% said they heard nothing at all.
- 11% said that had heard from their financial institution and felt better as a result.
Transpromo messaging with candor, timeliness and clear explanations is one of the financial service industries best and least-used options; by thoroughly addressing key issues, no matter how painful; by effectively communicating corporate positions candidly to each stakeholder, by presenting a thoughtful, thorough, and continuing communications program, the company will more likely weather the crisis without becoming what AIG is—a late-night punchline that has lost all credibility.
People are looking to hear from the financial services industry and they are not; the silence is deafening. The economic turmoil we are undergoing presents a number of opportunities for firms to communicate better; the smart ones will do so and Transpromo can be one very useful way to get that story out.