Crisis management and the need for CEO leadership

Commentators around the world commonly promote the CEO as Chief Communication Officer, or as Chief Environmental Officer, or occasionally even as Chief Reputation Officer.  But what best practice requires now is the CEO as Chief Crisis Management Officer, and that is much harder to “sell” along the mahogany-lined walls of the executive suite.

Issue and crisis management

Of course the role of CEO as spokesperson in a crisis is well known and well understood (including the fact that there are good reasons why the CEO is sometimes NOT the best spokesperson).   However that activity is purely responsive – it’s about what gets said when the crisis has already struck.

This is a guest post from Tony Jaques*, an internationally recognised consultant and authority on issue and crisis management.

Yet the true role of CEO leadership in crisis management should be much more, and public relations practitioners have a real opportunity to identify and help develop that broader responsibility.

Crisis management as executive responsibility

The concept of crisis management as an integrated executive responsibility is a key theme of my new book, Issue and Crisis Management (Oxford 2014).

It shows that comprehensive crisis management extends from long before the crisis with identifying issues and potential crises; through introducing and activating effective crisis prevention and response; and continues long after operational resumption to include post-crisis risk issues such as inquiries, inquests and adverse legal action.

It’s not surprising that a crisis situation turns the spotlight on leaders as the human face of any organisation.  As US reputation expert Leslie Gaines-Ross says:  “Just as CEOs receive most of the credit when things go right, they are also expected to accept the majority of the blame when things go wrong, particularly in times of crisis.”

Leslie Gaines-Ross research found. “when crisis strikes, nearly 60 per cent of the responsibility for the crisis is attributed to the CEO.”

CEO: more than a spokesperson in crisis management

One result of this attention on the CEO is that a lot of the available material concentrates on the role of the leader as spokesperson in a crisis. But I believe that if CEOs understood better how much blame they will get for the financial and reputational  damage when things go wrong, they just might be more willing to take a more active role in helping prevent the crisis happening at all.

If they need any further convincing, you need look no further than the seminal study by Les Coleman at Melbourne University, which examined Australian crises over a ten year period. It found that more than a quarter of those crises cost the organisations concerned in excess of $100 million, and about one in four of the organisations failed to survive.

In my own research interviewing Australian CEOs about crisis preparedness, it became obvious very quickly that top executives simply don’t see crisis management as their immediate priority.

As one CEO told me:  “People prioritise based on day-to-day issues and pressures. And, hopefully, on more than 99% of days, crisis management is not an issue or priority. Consequently, I think there is a tendency for people to put it off.

“When it’s time to do the crisis management stuff, there is always something else which is more important in the short term. It’s a matter of planning and priority setting and leadership.”

Accountability and opportunity in crisis management

Crisis (and issue) leadership is about much more than just speaking on behalf of the organisation—albeit a crucial responsibility.  Public relations practitioners are in fact ideally placed to help promote what I propose are basic criteria for true crisis leadership:

  • Leaders need to be able to help identify issue and crisis threats early and have the forethought to assign sufficient resources to make a difference.
  • They need to break down functional barriers to drive the integration of issue and crisis management systems.
  • They need to be able to recognise that issues and crisis may represent an opportunity as well as a threat.
  • Most critically, they need to provide an example to managers throughout the organisation to take personal responsibility for developing and implementing effective issue management plans to help prevent crises happening in the first place.

It might seem like a tall order, but it might also be the difference between organisational survival and extinction.

What role do you think CEOs should play in crisis management and why? What experience do you have of effectively undertaken proactive involvement in issues and crisis management from CEOs and executive leadership?

*Tony Jaques is an internationally recognised consultant and authority on issue and crisis management.  He writes Australia’s only specialist issue and crisis e-newsletter, Managing Outcomes, and is author of Issue and Crisis Management: Exploring issues, crises, risk and reputation (Oxford 2014)

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Saving the world – one cigarette at a time

It isn’t communication and public relations that will save the world; it’s what PR professionals have to work with – corporates’ social responsibility and business innovation.

Smoking kills

CVS Pharmacy is doing it by ditching cigarettes from their retail shelves. Chick-Fil-A and Starbucks are doing it through their stances on gay rights and sexual orientation. There are opportunities aplenty in the areas of resources (including energy) and waste.

Positive public relations from commercial and ethical foundations

On February 5, 2014, CVS Pharmacy (CVS Caremark), one of America’s largest pharma-retail companies, announced it will end the sale of tobacco products in its 7,600 stores come October, 2014.

This is a guest post by Adedamola Jayeola, who writes from Loyalist College in Ontario, Canada. Adedamola has written previously for this PR blog and brings a unique perspective and experiences to his observations, thanks in part to his Nigerian background, but also due to his global perspective.

Launching the move with the slogan “CVS quits for good,” company CEO, Larry J. Merlo said that “tobacco products have no place in a setting where healthcare is delivered and removing them from our pharmacies is the right thing to do.” This makes CVS the first pharmaceutical retailer of its size to chart such a course. As expected, the announcement received commendation from stakeholders such as the American Nurses Association, the American Medical Association and even the White House, to name a few.

This is not a step without consequences.

The company is projected to lose about two billion dollars in revenue (one percent of its estimated $120billion annual revenue) and significant ‘traffic’ from tobacco consumers, meaning further negative ‘knock on’ impact on the sale of other merchandise in the pharmacies.

Analyses will uncover different objectives for this decision, from the public health perspective proffered by the company, to business strategy (CVS Caremark plans to evolve from the retail model into a health care provider) or just “Great PR”, as described by Forbes.com and other industry watchers.

However, what is indisputable is that CVS is taking a stand, a definite one. Tobacco smoking is still dangerous to health and CVS wants to have nothing to do with it.

Taking a stand: fallacy or fact?

Do brands take stands now? Recently, some brands have brazenly expressed, or alluded to ,opinion on controversial issues, often dividing their audience into different schools of thought in the process.

The debate on gay rights and sexual orientation involving Chick-Fil-A, Starbucks and some brands in sports and entertainment come to mind. For-profit ventures now declare a corporate stand on sensitive topics, either as a matter of choice or in a move of strategy. Indifference as a business stance seems to be losing its appeal.

Not to be dismissive of socio-cultural or ethno-religious issues, I find CVS ending tobacco sale an action with greater impact. With consideration of health dynamics, morbidity as a sequel to tobacco usage will supersede individual orientations such as sexual preferences or proclivities. It is a matter of life first, before how you swing. No pun intended.

Applying conscience and commerciality to African enterprises

I had a chat with a colleague on the lesson(s) indigenous businesses (small, medium and large-scale) in Africa’s emerging economies can take from CVS. She gave me that “you cannot be serious” look which I (admittedly) saw coming.

The peculiarities of the business environments in some regions on the continent will make any brand think again before deciding to be a hero. According to the World Bank’s Doing Business Report of 2014, Nigeria and Kenya score 147 and 129 respectively (out of 189) in a ranking of “ease of doing business.” Suffice to say ,the regional average for Sub-Saharan Africa in this data is 142.

Behind any ‘sunny’ statistic positioning the continent as emergent are everyday challenges of infrastructure, finance and lately, security. For local businesses, these are real excuses to be indifferent and leave saving the world to super, cape-donning [and western-based? – Ed.] brands.

These handicaps notwithstanding, I believe Africa’s businesses can take a stand on some issues of global importance. Possible areas include:

  1. Energy: Nigeria (my home country) is still challenged in power production for domestic and industrial consumption. This forces many businesses to generate their own electricity, often through fossil-fuel powered engines. The downside of this is extreme air and noise pollution, especially in the commercial cities. Until power is fixed, brands that take a stand to Go Green on energy (solar, wind, etc.) either partially or totally, will reduce their own carbon footprint. The benefits for the society if there is industry-wide replication will be tremendous.
  2. Waste: Waste and energy share an interesting relationship. Public-Private-Partnerships (PPPs) on waste management are yielding success in cities such as Lagos and Accra. The progress can be made symmetrical if brands are active with sustainability initiatives (recycling, composting, etc.) or develop in-house eco-preservation projects that are strategically communicated.
  3. Resources: Specifically, raw materials that go into manufacturing or production. Issues and conflict from crude-oil exploration in Nigeria’s Niger Delta are legendary, but little attention is paid to other natural resources. For example, wood is an important raw material for industries such as art, tourism and furniture on the West African coast. Players in these industries can take a stand on preserving the earth through tree planting projects, or choose to adopt synthetic materials as substitutes for wood, if possible.

These suggestions are not unfamiliar and would fit somewhere in a corporate social responsibility (CSR) plan. Are they practical? Yes (though I admit this practicality is relative). For instance, in (1) and (3) three above, production costs may be involved, no matter how marginal.

So, here is the crux. Taking a stand will be a step beyond executing a CSR script. As earlier described, it will often come at an appreciable cost, even in the short-term. With pressure on Walgreen and other players in pharma-retail to tow the CVS line, credence is being lent to a radical, yet credible point of view:

the brand of the future cannot afford to only create value for profit, it must demonstrate values in itself. Strong values that may yet give our dying earth some hope.

Adedamola Jayeola writes from Loyalist College in Ontario, Canada. He’s online at www.adejay.com and@drjayecomms

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How thought leadership in PR can make companies money

As thought leadership is a central plank of many public relations strategies it, like PR in general, frequently has the challenge thrown at it of ‘can it make us money?’ The answer, it seem, is a very tangible and measurable yes. But let’s not forget the difficult to monetise value of an excellent reputation, either, which is a currency no organisation wants to do without.

Thought leadership in public relations

The question of thought leadership making money for an organisation is one of a number of topics which came up in a discussion I had with Craig Badings and Dr Liz Alexander, who recently published a compelling e-book entitled 140 Prompts for Designing and Executing an Effective Thought Leadership Campaign. Written as a series of tweetable insights, it works both as an inspiration for thinking about effective communication, as well as a practical ‘how-to’ handbook.

Other topics which came up in our discussion were methodologies which can be used to measure the impact of thought leadership and the challenge of carving out a thought leadership ‘space’ in an area already occupied by a rival organisation.

Increasing revenue through the practice of thought leadership

Craig gives three examples from the ebook: Thought Leadership: How to differentiate your company and stand out from the crowd, written by Mignon van Halderen, Kym Kettler-Paddock and himself (you should check it out as it is a substantial piece of work with many useful case studies):

According to IBM, its Smarter Planet campaign achieved the following:

  • Clients’ preference for IBM increased by 5%-10%
  • Brand value increased by 20% (11.3 billion dollars)
  • Stock price increased by 64%.

GE’s Ecomagination campaign achieved the following:

  • From 2005-2010, GE earned $85 billion in revenue on Ecomagination products
  • Ecomagination sales are expected to grow two times faster than the rest of the company
  • 22 percent reduction in greenhouse gas emissions, 30 percent reduction in water use and $130 million in energy efficiency savings.

According to Unilever, it’s Dove Campaign for Real Beauty achieved the following:

  • Within two months of the launch, sales rose in the US by 600%
  • within six months of the campaign launch, Dove’s sales rose by 700% in Europe
  • The brand is estimated to have had an 11% increase in revenues in Q1 2005 as well as double digit growth in Q2 2005
  • As of 2010, Dove sales total more than €2.5 billion
  • Sales have grown by more than $1.5 billion in revenue within five years after the campaign’s launch.

Reputation, marketing and stakeholder engagement driven by thought leadership

Craig and Liz also outlined additional business-relevant tangible outcomes thought leadership provides:

  1. Deeper engagement with existing and new clients/customers and converting prospects into customers.
  1. Establishing a relationship with clients and prospects based on your insights into their issues or challenges, not your products or services. This enables very different conversations and clearly differentiates your brand from the competition.
  1. A significant lift to brand reputation as evidenced by the GE figures.
  1. Opening up marketing opportunities the company would otherwise never had had. For example, Booz & Co’s Global Innovation 1000 thought leadership campaign’s study is cited each year in nearly 200 publications around the globe, spanning 27 countries. It receives numerous invitations to write by-lined or guest articles in other publications. Their employees are invited to speak at innovation conferences around the world. Their employees are invited to join advisory boards of clients and innovation-related associations.
  1. And, finally, one that is often overlooked: equipping your own employees – especially your sales team and new business team – with rich, valuable data/information which leapfrogs them in terms of the conversations they can have with clients and prospects compared to the competition.

Measurement of thought leadership impact

I asked Craig and Liz what methodology they recommend to measure the impact of thought leadership on achieving new revenue or other business outcomes. They came up with a range of ideas on this topic. Clearly, you need to customise these approaches to your campaign, how it is being rolled out (e.g. online only?) and your budget.

“The critical first step is to define, very clearly and to have it written down, your objectives,” said Craig and Liz. “Based on the organisation’s specific objectives, measurement criteria could include the following:

  • Visits to the content webpage
  • Email click through rates
  • Video views
  • Attendance at webinars
  • Twitter, LinkedIn, Facebook followers
  • The number of names who opt in to download e-books or white papers
  • Attendance at talks
  • Third party support (e.g., validation of your thought leadership by key influencers in the industry and/or research entities like think tanks etc.)
  • Media coverage across tier one (mainstream) and tier two media (trade)
  • Measurement of tone and the key messages
  • Speaking engagements
  • One-on-one client contact
  • New prospect engagement
  • Qualitative, researched client feedback – case studies and suchlike
  • Internal impact (i.e. how do employees view it, how do they use it, how useful it is in prompting conversations with clients?)
  • New business pipeline
  • Brand reputation (using research and then benchmarking tools)
  • Google rankings on agreed search terms
  • Klout score for your thought leadership champion.

“Depending on the tools you use for measurement,” continued Craig and Liz, “You can start becoming quite sophisticated in your measurement of things like: the segment of clients and prospects that respond best to your thought leadership content and why; seasonal impact; impact depending on the day and the time of day.

“The beauty of almost all of this is that it can be done automatically.”

Entering a competitive space with thought leadership

In Craig and Liz’s book, they mention undertaking research to ensure the thought leadership space an organisation might seek to inhabit is not already dominated by a competitor. Are there occasions, I asked them, when there is a benefit to seeking ‘dual occupancy’ of a thought leadership ‘space’ for a newcomer?

“Yes; there is something called the ‘long tail’, the concept introduced by Chris Anderson of Wired magazine (and formerly The Economist) to describe the shift away from a few mass markets to a much larger number of niche opportunities/markets,” asserted Craig and Liz.

“A good example of this would be innovation. The innovation space is pretty much owned by Booz & Co with their Global Innovation 1000 study which they have been conducting for seven years.

“However, innovation is a very broad topic and within that there may well be a niche market that a company or brand could own (e.g. the long tail). For example, a company specialising in manufacturing might find a niche they could own in manufacturing innovation or a plastics company may come up with a plastics innovation thought leadership platform. Moves are already underway on this niche with the Think Beyond Plastic innovation competition.

Have you implemented a thought leadership campaign and evaluated its effectiveness? What did you find? Were you able to determine a link to financial outcomes?

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