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What Tiger Woods and other scandals really tell us about crisis management

PR and media types over-analyze the Tiger Woods mess.  There are only a couple of lessons here.  But they’re big ones.

Here’s the first: The threat of discovery doesn’t stop some people from behaving badly.

Tiger’s melt-down isn't the failure of a crisis plan. There wasn’t one. None of Tiger Inc.'s image handlers prepared memos outlining what to do if it came out that Mr. Woods enjoyed extramarital affairs like some people collect snow globes.  Damage control strategies started after the truth.  Not before.

Today’s Internet-driven reality TV culture means we’re following scandals more than ever.  We’re very familiar with the “PR angle” of every story.  This has created a belief that PR is the end result of itself.  For example: Say a professional sports star gets caught illegally playing partybingo online. The public debate over how the athelete responds to being found out will quickly become as big a headline as the issue of whether what he or she was doing online had any undue influence.

We assume that image is a universally valued currency to be saved or squandered.  But this confuses how we rationalize self-destructive behavior by prominent people.

Take for example a recent Harvard Business Review article on responding to scandals.  In it two researchers argue that Chinese executives who added melamine to milk sold in the U.S. might have acted differently had they only anticipated people's emotional reaction people to media coverage about dead infants.

The world doesn’t work that way.  Businessmen who poison food to increase profits are criminals.  And criminals are psychopaths that by definition don’t care what happens to others. They’re bad people, not bad public relations planners.

True story.  Many years ago I was in my hotel room watching the local news when suddenly the TV showed a mug shot of my client.  The government official at the center of our at-risk youth campaign had been arrested for soliciting a teenage prostitute. 

We had nothing prepared for this.  What we did have, however, was an appreciation of how things would get worse if people thought we were treating the scandal as primarily a PR problem to be resolved with spin and posturing.  That got us through it.

In the same way, Tiger’s self-destruction also reminds us of the second lesson: That effective crisis planning is having the ability to respond to situations nobody sees coming. 

In the real world, that has to include people in charge being caught doing very bad things.

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Getting caught is the new transparency and other realities of the coming year

Five truths for 2010:

The age of transparency is mostly about getting caught.

Ten years into the new media era, the institutions we love to hate – government, banks, big business, media – aren’t any more willing to tell us what they’d rather keep to themselves. The constant outing of reality TV frauds, tax-supported executive bonuses, front groups and scumbag celebrities is still a function of how Americans use the Internet to inform and entertain themselves.  Not the other way around.

Social media is getting less social.

Over time, millions of people will stop using social media sites because 1) their bosses lock them out during working hours, 2) they tire of all the commercial clutter or 3) they learn how those revenue-hungry companies are sharing their profiles, posts and friends lists.

The Rocky Mountain News is still dead.

For all the outraged hang-wringing and new ventures, media consumers in Denver and many other American cities are still only willing to support one local daily newspaper.  Barely.

Journalism, however, isn’t dead.  It’s just changing.

So-called “advocacy” media will flourish as more formerly ad-supported news outlets – or individual journalists and commentators -- become funded by interest groups, politically leaning foundations, single corporations and even government.  Whether you think it’s biased or not will depend on your point of view.

No company will ever hide its identity again.  Har.  Kidding.

Getting nabbed isn’t as certain as, say, driving through a DWI checkpoint with an open bottle of cream de menthe in your lap.  But some well-known brand out there is going to have a major PR problem when it draws the first high-profile enforcement of the Federal Trade Commission’s new transparency in marketing rules.
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Bad News Friday usually makes things worse

Even in the always-on Internet era, many companies and government offices still rely on the old trick of waiting until late Friday afternoon to release bad news.

In most cases they're just making things worse come Monday. Here's why:

You stop nothing.  People who care most have news alerts, stock tickers and other Internet tracking gizmos to get your stuff the second it hits the fan. Your stock will still move in after-hours trading guided by speculation and negative expectations.  Media outlets will still run breaking news, except this time you’ll be covered either by reporters who know to dig for whatever you’re trying to hide or by inexperienced weekend reporters who don’t know the situation.

You create a new credibility issue.   Maybe ten people on the planet won’t perceive that you tried to bury bad news on Friday afternoon. You risk creating a whole new PR problem with stakeholders and media for thinking they don’t see you trying to sneak out the back.

You dig a deeper hole.    Friday-night announcements don’t make bad news go away.  They create a 48-hour vacuum for people to assume the worst. Some will interpret your move as a signal that there’s still another shoe to drop. You could be in a worse defensive position on Monday morning as you reopen the doors to angry shareholders, anxious employees and reporters working on follow-up pieces about your company mishandled a crisis.

You still announce on Monday anyway.  Assuming you’re somewhat successful in burying your bad news over the weekend, you’ll have to deal with the response on Monday from people seeing the news for the first time. Now you’re dealing with two sets of responses: the people who are just hearing it, and the people who saw and reacted to it over the weekend.

Bad News Friday isn’t a secret, it’s bad public relations.

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Associated Press story says media hoaxes work

AP television writer David Bauder expands on the “frightening message” that media hoaxes like Balloon Boy and the fake press conference in which activists reversed the U.S. Chamber’s position on global warming are increasingly successful publicity tools.

At least, we think it’s AP television writer David Bauder.
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A business primer on the new FTC transparency rules

Representing its most sweeping action in 30 years, the Federal Trade Commission’s new rules governing endorsements and testimonials will change how marketing is done.

Here’s what the Guides Concerning the Use of Endorsements and Testimonials in Advertising say:

ACCOUNTABLE FOR BLOGS AND SOCIAL MEDIA.

The FTC already directs online reviewers to disclose if they’re being paid by advertisers. Under the new rules, however, every blogger, Twitter user or social network member must disclose any “material connection” with a company, product or service.

Taken literally, this connection could result in fines for bloggers who fail to disclose anything from getting a sample can of chili in the mail to having a spouse who owns company stock. While consumer advocates support the guidelines, some prominent bloggers argue that the rules in effect force them to disclose every business relationship they’ve ever had.

Enforcement is another matter. The FTC says it will primarily go after the advertisers rather than individual bloggers, though it will take into account how companies encourage transparency in their paid reviews and freebies. Beyond that, the agency will decide matters on a case-by-case basis – which basically means they’ll know deceptive advertising when they see it. What makes things even more convoluted is that the agency doesn’t say by what means it will handle these situations.

Given that the new transparency standards for bloggers are higher than what’s required of commercial news media and politicians, the FTC rules are generating considerable debate among marketers and social media proponents alike. Stay tuned.

ACCOUNTABLE FOR TYPICAL RESULTS.

Ads that feature individual consumer experiences with a product will have to state clearly what kind of results everybody else can expect. Soon to be history are those ubiquitous ads that whisper “results not typical” while showing some guy who lost 300 pounds drinking vitamin shakes.

ACCOUNTABLE FOR EMPLOYEES.

Employees that promote their company or its products online must “clearly and conspicuously” disclose who they work for.

The FTC urges that companies have social media policies as one way to avoid fines or other actions when employees pretend to be someone else – say, a happy customer or invigorated shareholder.

Keep in mind, however, that a recent Deloitte study found that a third of all employees don’t even consider what their boss might think before posting something online.

ACCOUNTABLE FOR CELEBRITIES AND RESEARCH.

A warning to every company that uses movie stars, retired quarterbacks and 70’s sitcom actors for promotional tours. Under the new FTC guidelines, both advertisers and their celebrity spokespeople can be held liable for making false claims as part of a commercial endorsement.

The ramifications are huge. Celebrities making the rounds of late-night talk shows, state fairs and Twitter feeds must disclose their business relationship with any company or agency that’s paying them to pump movies, books, products or even charities.

Companies that quote research must also disclose if they paid for the studies, or if they have any business relationship with the organization that did the research.

These standards go way beyond front groups and hidden clients. From now on, any failure to disclose corporate affiliations could be considered deceptive advertising. That’s going to hit a lot of marketing PR campaigns.
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Download a PDF of the revised FTC rules here.

Industry expert asks if Toyota's image is getting a free ride

Auto industry veteran Frank Sherosky asks if Toyota’s stellar reputation for quality is more a result of good image management than what really happens on the road.

CBS News reported that a former Toyota lawyer has filed a federal racketeering suit against the company for “ruthlessly” conspiring to hide evidence about hundreds of roll-over accidents in which the roof caved in.  The potentially damming case was filed in late July but took more than two months to make the news.

“In that respect,” Sherosky writes in the Detroit Auto Examiner, “it's hard not to at least question the media for bias. Does Toyota own a free-pass card in the press, when American companies like GM, Ford and Chrysler get slammed all the time?”

Toyota denies the allegations and says its former in-house counsel violated attorney-client privilege with his lawsuit and in the consulting work he did after leaving his job with a $3.7 million severance package.

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More and more job applicants rejected because of what they've posted on social media sites

CareerBuilder reports that 35 percent of 2,600 hiring managers surveyed decided not to employ someone specifically because of what that person posted on Facebook, LinkedIn, MySpace, Twitter or blogs.

When I first wrote about the “The Transparent Generation” in 2006, only a small percentage of employers made it a point to research job candidates on social media sites.  Today almost half do so.

It’s bound to be standard practice before long. 

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What's behind The Twitter of Babble

A new study finds that 40.55 percent of all Twitter messages are “pointless babble.”

Of course, that percentage goes way higher if you also include babble that is irrelevant, incoherent or inane. 

But what’s driving this share-your-nothingness phenomenon?  Why are there so many millions of people who feel compelled to tell strangers on the Internet that their feet are cold or that they’re going to lunch?

Some experts say we live in the most narcissistic age ever.  But others think the babblers are filling a void.

“Twittering stems from a lack of identity,” one clinical psychologist told the London Times.  “It’s a constant update of who you are, what you are, where you are. Nobody would Twitter if they had a strong sense of identity.”
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Six standards for employee use of social media

PR lawyer Michael Lasky summarizes four key principals to include in company policies for how employees may use blogs, Facebook, YouTube, Twitter and other social media:

• Respect for intellectual property … Avoiding plagiarism and copyright infringement.
  
• Standards of truth … Attributing information, knowing the difference between fact and opinion.
  
• Confidentiality … Knowing what can be made public via the Internet, and what should be protected.
  
• Common sense … Using the same rules that apply to memos, emails, press releases, web sites and other company communication.

While these are broad enough to cover most concerns, I would also make sure that your social media standards address these two important areas:

• Transparency … That official communications will not be misleading, disguised or anonymous.
  
• Accountability … That the company will protect stakeholder interests by tracking social media use and content, and that employees will be held responsible for misrepresenting or maligning the company on the Internet, even if they do so on their own time.

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Managing the unmanageable: Employees talking about your company on the Internet

Here's one of the questions I hear most:

"How are we supposed to manage what our employees say about us when they're on Twitter and Facebook all the time?"

Executives worry about social media in relation to two things: risk to the company and loss of productivity.  Both are legitimate concerns. Yet many of those same executives are downright tepid about bringing up the productivity issue. It's as if they're worried about sounding ridiculous, like the old dolt who doesn't get this World Wide Web hullabaloo.

Or perhaps they've seen studies like the one claiming that employees who use the Internet for personal reasons are nine percent more productive. Researchers in Australia report that "workplace Internet leisure browsing, or WILB, helped to sharpened workers' concentration."

There you go. Can't argue with an acronym.

But even CEOs who buy it are concerned about how social-networking employees might be representing the company. And they dang well should be.

Deloitte's 2009 Ethics & Workplace Survey found that 75 percent of working Americans think it's easy to damage a brand's reputation via Facebook, YouTube, Twitter and other social media services. Yet a third of all employees say they never even consider what their boss might think before posting something online.

This is scary stuff.  It means that a good chunk of any company's workforce could include people with the same kind of mental disposition as the two Domino's employees, aged 31 and 32, who posted a video of themselves spitting on food and stuffing cheese up their nose -- all while laughing that "somebody will be eating them, yes eating them... Now that's how we roll at Domino's!"

In the first 48 hours, more than a million people watched the gross-out video just on YouTube.  Internet exposure and news coverage hit like a hurricane. And in only four days of tracking, consumer perceptions toward one of the nation's most popular brands went from great to rotten.

Domino's responded comprehensively and is even being credited with being the "Tylenol crisis" of the new media era.  But winning a PR trophy doesn't come close to accounting for what that little video prank cost the company in lost sales, bad publicity and ridicule, penalties paid for health-code violations, costs associated with managing the crisis and the expenses of investigations and litigation.

And unlike the Tylenol crisis, the image of a smirking Domino's employee sticking cheese up his nose will keep showing up on the Internet forever.

In a New York Times story, a Domino's spokesman underscored the real bottom-line risk of social media:

"We got blindsided by two idiots with a video camera and an awful idea. Even people who've been with us as loyal customers for 10, 15, 20 years, people are second-guessing their relationship with Domino's, and that's not fair."

Companies must have comprehensive social media policies in place, and many do. But rules alone won't change how many people behave online. In a world where so many employees (and bosses) could give your brand a black eye, it will take considerable internal culture-building and communications programs to ensure they don't.

Technology savvy or not, that gives every CEO good reason to wonder how much time their people are spending on social media.  And what exactly they're doing there.
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Links & Resources

• Deloitte | 2009 Ethics & Workplace Survey Results
• New York Times | Video prank at Domino's taints brand
• USA Today  | Domino's nightmare holds lessons for marketers
• Domino's | CEO YouTube response: "Disgusting Dominos people"
  
• Scatterbox | Transparent generation realizes downside to growing up online