News International’s reputation crisis – numerous lessons in what not to do

News International’s fascinating reputation crisis has highlighted so many issues about crisis management it is hard to know which to focus on in a blog giving tips. Meanwhile, the story keeps developing faster than I can keep up – which is typical of crises that are mismanaged. And that is lesson one:

Take control from the start. News International lost the chance to be in control – by not taking it from the start and that’s the first crucial and critical aspect of good crisis management, when a crisis blows. You can only do that if you anticipate the worst and mitigate against it. From News International’s point of view, the worst must be what is happening now – a problem with one publication in its stable has ended up shaking the worldwide reputation of the whole of News Corp. News International has been dodging the worst since the issue of phone hacking first arose. It hoped a couple of seemingly dramatic steps (Clive Goodman’s arrest and imprisonment; Glenn Mulcaire’s arrest and imprisonment) would convince us that it had got rid of the causes of their misdeeds. The problem is that the public suspected that they were acting on higher orders; someone sanctioned their behaviour, and that someone is still somewhere in News Corp. And that leads to lesson two:

Token gestures do not work. The sacking of Clive Goodman and Glenn Mulcaire didn’t go far enough – and didn’t we all suspect that? The announcement of an internal inquiry didn’t go far enough – and didn’t we all suspect that? Rebekah Brooks, it has just been announced, is now not going to lead that internal enquiry – and didn’t we know all along that she shouldn’t? Closing the News of the World ends its 168-year history – but aren’t we all questioning the integrity of all Murdoch titles, indeed all Murdoch media businesses? And that leads to lesson three:

Take swift, decisive action. If the sackings of the wrongdoers had been followed by significant shifts in policy which were then put into action, this crisis might have been avoided. It looks, though, as if the corruption was so endemic that it was impossible to stop it without closing the title. If that had been done then, when the issues first arose, the damage to News International would have been much less. Yes, there would have been a media frenzy. Yes, politicians would have spoken out. But some voices would have been supportive – and the impact much less as a result. And that leads to lesson four:

Consider those you might affect: A crisis in any organisation or business will have an impact on others. Some will be friends and some foes; your aim must be to win public support from friends and to keep foes quiet. Well, didn’t the News of the World do well. It’s hard to find any friends who have not turned into foes and those who have spoken out have had an enormous impact including big brand advertisers, charity partners and shareholders; we have yet to see what effect it has had on its readers. But it has had a much wider impact on organisations that were already in a weak position: threatening the future of the Press Complaints Commission (long due a wholesale overhaul); dragging the integrity of the Metropolitan Police into the open, yet again (long due a wholesale overhaul); raising serious questions about political friendships and contributions (long due a wholesale overhaul). It has thrown doubt on the prime minister’s judgement (not just about appointing Andy Coulson but also about forging links with editors). It will undoubtedly raise questions about other tabloids and whether they always tell the truth (we know they don’t). It is not inconceivable that others of its newspapers – wherever they are published – could be at risk. We know that it has affected News Corp’s bid for BSkyB. It will affect the public’s view of James Murdoch (who has stepped in to try to shift the image of the crisis but been unconvincing). And it will make people question the business ethics of Murdoch’s daughter, Elisabeth Murdoch, her husband Matthew Freud and his business Freud Communications (whose approach to crisis management has not always been the best). Which leads to lesson five:

Be wary of forging alliances: Having the support of big names – celebrities, brands, decision-makers – is inevitable; it adds credibility and draws attention. But it has a flip side; it’s the reverse of considering those you might affect: it’s about how your allies might affect your reputation if they do something wrong or inappropriate. That’s why Ford, the Royal British Legion and others have withdrawn their support; they cannot afford to be dragged down by News International’s dodgy reputation. And that leads to lesson six:

It takes years to build a reputation – and a second to destroy it. Of course, you could argue that the News of the World’s 168 year reputation was always as a distributor of sleaze – but millions read it (including, for several years many years ago, me) and millions loved it (including, for several years many years ago, me). It punctured puffery – but it failed when it failed to puncture its own. And that leads to lesson seven:

Don’t get too big for your boots. We see it over and over again. Success, or being surrounded by yes-men or being courted by the great and the good, makes people feel invincible. Peter Mandelson, Gordon Ramsay, Tony Hayward, Hosni Mubarak, Fergie, the Pope, HMRC, British Airways, Tony Blair, Alastair Campbell, Rupert Murdoch, Rebekah Brooks … they all faced crises because they behaved as if they were above it all. And that leads to lesson eight:

It’s all about trust. For decades, dinner party chat has been about Murdoch, his approach and his publications – and not in a good way. The public does not trust Rupert Murdoch. We see politicians toadying up to him and his editors, and we don’t like it. We see a man consumed and convinced by his own self-importance, and we don’t like it. We see a business empire getting ever larger, with fewer controls from outside, and we don’t like it. We see him protecting editors and others even when there is evidence that they were implicated, and we don’t like it. Because, just as we all believe in the freedom of the press and their role to tell us what others are trying to hide, we don’t like having the wool pulled over our eyes by people whose role it is to expose the truth, but who lie themselves. We knew there was worse to come and that it extended well beyond the News of the World; we had little trust. Which leads to lesson nine:

Face the music. The most striking image of all throughout this saga was the one of Rupert Murdoch – a media man who knows the rules – when he said “no comment” – the biggest sin in media management – when door-stepped by journalists. When you say nothing, the only inference people will make is that you have something to hide. We all know that there must be more to come. Much more. We’ve had fudge, denial, pretence, lies. We’ve even had Rebekah Brooks claiming to be on holiday every time a problem arose (as if that means she is not ultimately responsible). They have not worked. They never work. They do not build trust. They will always be exposed. Which leads to lesson 10 which is, in reality and always, lesson one:

Be honest, open and transparent: It’s the only mitigation factor that works – and it works every time.

The question is: will we ever get the truth, the whole truth and nothing but the truth from News International?

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BP oil slick not so slick – Take advice from a duchess

Three crises are bubbling away at the moment: the BP oil slick that has incurred the wrath of a US president, the Duchess of York’s latest foot in mouth episode, and the continuing BA crisis.

It’s a mystery to me why people at the very top of their worlds (and you can’t get much higher up the oil world than BP) fail to see common sense. When a crisis happens, you cannot hope to survive it with your reputation intact if you use weasel words. Yes, there will be some circumstances in which it is genuinely unclear who is to blame. But if you are responsible you must put up your hands and fess up – immediately. If you are in a group or consortium (or whatever else, tightly bound or loosely formed), you must do this together. Passing the buck will never, ever work in your favour.

Those of us who can remember the first Mandelson episode will not need to be persuaded. He denied and denied and denied but, much later, had to own up – by which time he had lost all credibility. While he is perhaps our most successful come back kid, very few people take him seriously. He is seen as a bit of a rogue, perhaps with an endearing quality, but he’s not someone you would trust with the truth. When he recently pronounced on the importance of propriety in parliament, there can be very few of us who didn’t snigger at his bare-faced cheek.

So why do we keep on hoping that denying is the right way out? By putting the blame on Transocean, Tony Hayward of BP made a catastrophic error. He looked weak and untrustworthy and he made BP look weak and irresponsible. At the very least, he should have teamed up with Transocean to show that they would work together to stop the flow of oil, investigate the cause and deal with its symptoms. Instead, he chose equivocation and he passed the buck. He now has President Obama breathing down his neck (cleverly saying that the buck stops with him) and a damaged personal reputation that will affect his career prospects whenever he leaves BP, which may be sooner than he hoped given the consequence of his inactions and denials. As for BP’s reputation, that continues to be denigrated with families of the 11 people who died in BP’s other crisis (the explosion on the Deepwater Horizon rig which then sank, causing the oil leak) saying that today’s memorial service for those who died was no more than a show.

Fergie gets it right

Meanwhile, Fergie, for all her clumsiness and lack of business nous, knew exactly how to attempt to salvage whatever reputation she might have. And for her, the most important consequence of her foot-in-mouth proneness is her status with HM The Queen, her ex-husband The Duke of York and her daughters (all of whose good will she needs, not to mention their financial support). Also of importance, again for status and money, she needs to minimise the impact it might have on her future earning power among commercial sponsors.

So, apologising for a lapse of judgement was the right thing to do. And she did it swiftly. While you could argue that she had no choice (a recording of her grandiose claims was the strongest evidence possible) she could have argued she was duped or joshing or … it matters not. Her immediate apology and admission of failure minimised the size of the potential fuss that followed. The fact that she has done this before, following the same yes-I-did-it policy, and will no doubt do it again, has done her much less harm than if she had wriggled and fudged. In that sense, her behaviour is exemplary.

BA spin keeps spinning

As for BA, at last the media is beginning to look beyond the corporate spin. Until now, only The Guardian dared to see through the BA corporate comms department’s puffery, putting across the crew’s case in a considered and measured way. Others simply ignored it or paid lip service to it, perhaps publishing a batch of letters from crew without adding any editorial comment (as did the paper I read), as if to say “we have to publish this for balance but we think it’s a load of old rubbish”. If any rubbish is being strewn about, it is by BA.

With a corporate history that includes the raid on Virgin’s computers, as sanctioned by the BA board, BA’s reputation is becoming more and more tarnished. It’s a splendid example of what not to do. But don’t think you can get away with the same approach. It takes generations to build the sort of relationships BA has with the media – and if you betray those relationships, as BA has done, who knows what wrath might follow (when those journalists see they have been duped).

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The Catholic church and Ryan Air make more mistakes

I’ve deliberately avoided commenting on the Icelandic volcano crisis – because it would have kept me occupied 24 hours a day, and because so many commentators were having their say. It would have been impossible to know who to comment on and when.

As I see it, the authorities overseeing the situation and determining whether and when airlines could return to the skies had to take an exceptionally cautious view. They explained why they were so cautious and gave regular bulletins, giving airlines some chance to cancel flights and warn passengers of the implications. If they had been less cautious, and there had been a tragic incident, they would have been vilified for being reckless.

They were right to play safe; the reccies run by airlines were risky. The BA test flight, with Willie Walsh on board, stayed well below the normal flight path and well out of the way of the ash – but they kept quiet about that. It was a PR stunt designed to bolster Willie Walsh’s reputation and investor confidence. It may yet prove to have provided a false sense of security. Tonight, one plane bringing back stranded passengers has been affected by ash. The story is not over.

Meanwhile, today two organisations spoke about crises affecting them. Did they get it right?

The Catholic church continues to shirk its responsibilities

The Catholic church has come out with a fulsome apology to everyone who suffered sexual abuse by its priests. So that’s sorted that, then. Well, no. Apologising is essential, of course, but it is not enough. Organisations need to say what they will do to prevent whatever has happened from happening again. They then need to make sure they do what they say they will – and report on it. Did we have any indication today of what the Catholic church is going to do to mitigate the risks of it happening again? Not a squeak beyond a bland statement that they will do something.

The reality is that sexual abuse of children is highly likely to happen again – in the Catholic church, in any church – in any place where children gather together. People who are at risk of abusing children cannot help being drawn to children in situations where abuse could be possible, so drawn to them they will be. I am of the view that they are not evil; there are deep-seated psychological reasons for their behaviour and they need extensive professional treatment to understand and then overcome the impulses that drive them. Some may never be able to achieve this and they will need to be kept away from temptation. But others will – with the right professional support.  Of course I wish it were otherwise but the facts are the facts.

So the issue the Catholic church ought to have spoken about is what it is going to do to minimise the risks to children – and what it is going to do to help perpetrators, or indeed potential perpetrators, to stop. Saying sorry without backing it up with a plan of action is futile and fools no one.

Ryan Air retracts

Michael O’Leary of Ryan Air popped up on screen and radio to issue a new statement, desperately trying to rectify his earlier rigid stance about what the company would pay stranded passengers in compensation for cancelled flights due to volcanic ash. Having already annoyed passengers, and come across as mean-spirited to the rest of us, he now has an uphill battle to convince us that they will be fair if things go wrong when we travel.

It is essential to anticipate reactions, explore the what-ifs, look at all the angles. His first response – that financial compensation would be limited to the value of the ticket – was clearly made with only one thing in mind: the business’s bottom line. This is short termism of the worst kind.

It is a fact that the damage done to a business’s reputation in a crisis far outweighs the cost of recovering from it. Businesses need to spend their way out of crises.

O’Leary discovered this too late – and will now need to spend much more on rebuilding the company’s reputation than if he had simply taken a fair approach from the start. Even now, he has not been entirely clear, insisting that compensation claims will be looked at on a case by case basis. That sounds as if it has the potential to create even more bad feeling among already disgruntled passengers – and you can bet your sweet bippy that some of them will talk to the media, criticising the company publicly for months to come. This will prolong the crisis and damage the business even further.

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