Archive for January, 2011

When personal crises impact on business

Four crises running in the news demonstrate the conflicts that can arise when the trigger is personal but the impact is on the business. Steve Jobs is taking a back seat at Apple because of his ill-health; Alan Johnson has resigned as shadow chancellor of the exchequer for personal reasons; Andy Coulson has at last resigned as the prime minister’s chief spokesperson; and David Cameron, whose disabled son Ivan died last year, has become embroiled in a local case of a mother who needs more help to look after her profoundly disabled child. Each of these raises different issues – and has different impacts – but the crisis is the same; it’s personal.

Can Apple remain rosy?

Any business that relies heavily on its chief executive, or any one individual, for its reputation is in a extremely dangerous position. As its business innovator, and charismatic spokesperson, Steve Jobs is inextricably tied to the Apple logo just as Richard Branson is synonymous with Virgin. When Jobs or Branson become the story, their brand and its reputation are bound to be implicated – for better or worse.

In the case of Jobs, with long-standing serious health problems, Apple has been lucky that the effect of his absences has been small and relatively short-lived dips in it share price. But what might happen if he can’t come back to the job? While Apple has said that its product line is secure for the next two to three years, what will happen after that? Will it cease to be as innovative – simply churning out the same products while others make advances?  Will it lose cachet – with Apple products no longer the must-haves people queue for even in countries not used to queueing? Will it become just another technology company, no longer ahead of the pack?

Every business needs to have an exit strategy. For small businesses, that might be to build a business that is strong enough to sell when the owner wants to retire and at a price that protects, or enhances, the owner’s lifestyle. For serial entrepreneurs, it might be to create a business ripe for takeover after a few years, leaving its owner free and well-funded enough to start up another venture to sell. For Apple, the need is for shareholders to continue to provide the cash it needs to innovate and grow so it can at least retain its market share – and for fans like me to continue to want to buy its new products. To do this it must have plans for how Steve Jobs will be replaced whenever he leaves, and it could be sooner than anyone wants.

The issue, for the moment, is whether Apple should have said what those plans are – to reassure investors. The rule book says yes – and I would counsel any business to follow best practice. But Apple has never played by the rules and, for the most part, investors and fans indulge it in its above-it-all approach. It is taking a gamble – but, provided it has a big announcement up its sleeve for when Steve Jobs disappears for good, saying nothing now could well pay off. Just don’t risk it yourself – unless your business is an international phenomenon in a class of its own.

Alan Johnson leaves in mist

Fortunately for Alan Johnson, the story of his resignation very quickly became the story of a potential clash, or rivalry, between Ed Balls and Ed Miliband. But, between his leaving and the political hacks rising, there was a gap long enough for the media to want to fill it.

By not explaining the reason for his resignation, Johnson has given the story longer legs. In the absence of authoritative information from him when he resigned, the media has dug around and found plenty to fill its empty pages (apparently an affair between his wife and his protection officer). And the pages might not read as Mr Johnson wishes.

He will, at some point, have to make a statement – whether to correct, clarify or confirm the speculation. He should have taken control of the story and told it like it is, getting it over and done with at the point of his resignation (not unreasonably, simultaneously asking the press to respect his and his wife’s privacy while they sort things out). Instead he is now on the back foot (and very lucky that Balls and Miliband are providing a distraction).

Andy Coulson exits under a cloud

“… when the spokesman needs a spokesman, it’s time to move on.” At last, some common sense from the supposedly media savvy Andy Coulson who has been under attack almost from the start of his sojourn at 10 Downing Street. Whether he did know about phone-hacking at the News of the World when he was its editor is not for me to say – though if he didn’t know, surely he wasn’t on the pulse of what was going on at his own paper. And, if he did know …

Regardless, this issue is about when to resign if you are under personal attack: almost always, it should be immediately and without equivocation – because it is almost impossible to carry on as normal with the media sniffing away, determined to uncover something. If it turns out you did nothing wrong, you can go back with your head held high and new respect from others. But while there is any doubt in the public’s mind – and especially if the media is gunning for you – going fast is the thing to do.

It is perfectly honourable to say something like “I have done nothing wrong but, while there is an investigation, I cannot give my full attention to the job so I am stepping down for the time being”. The truthful will be reinstated with added value; the untruthful will get what they deserve. The real sin is to hang on like grim … Andy Coulson.

David Cameron accused of being too close to the subject

Today’s PR Week carries a story, driven by a former colleague of mine, about David Cameron’s fitness to see an issue objectively. Cameron has been accused of being too close to a subject and getting it wrong.

During the general election campaign he met Riven Vincent, mother of a severely disabled child, after an exchange on Mumsnet. Very recently, Vincent posted a comment on Mumsnet saying that she was thinking of putting her daughter into care as she was finding it so hard to cope with so little respite care. The brouhaha that followed centred on the government’s cuts – though there has been no reduction in the level of support Vincent has received and nor is there any threat of a reduction. Cameron has written to Vincent. My former colleague thinks he should have resisted.

Cameron’s damned if he does and damned if doesn’t. On balance, he did the right thing – he’s spoken often about his personal experiences with his son Ivan and will always be associated with issues affecting families with profoundly disabled children. If he had said nothing he’d have been accused of callousness; criticism of his policies would have escalated and he’d have lost personal credibility. More importantly, he would not have been true to himself if he had failed to respond this time – and would have been wide open to personal and professional criticism.

Being authentic is essential – though I realise not everyone in the communications industry follows this golden rule.  Yes, Cameron needs to work out a way of dealing with similar cases so he can manage the situation if it arises again which it is bound to do given that it is so emotive, but he is undeniably personally associated with the issue and cannot duck it for political expediency.

Silence is never acceptable in a crisis. It implies there is something to hide – and that implication can only damage a reputation. Unless you are Apple.

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