09.01.04
ISSN:1528-3836
© 2004 Jonathan Bernstein
Circulation: 4,000+
Estimated Readership: 14,000+
JUST A THOUGHT
Don't gauge the impact of a crisis by the size, frequency and placement of news coverage. Measure, instead, how it is ACTUALLY impacting your stakeholders, internal and external. Yes, that means you need to ask your stakeholders to give you feedback, not just guess about their reactions based on a few calls, hostile or friendly.
Jonathan Bernstein
CRISIS MANAGER UNIVERSITY
Editor's Note: I have found right way/wrong way case histories to be particularly useful to my practice, so I was delighted when I tripped across this one by Bob Oltmanns, and even happier that he gave me permission to reprint it.
Puts & Calls: A Tale Of Two Vegetables (OK, A Veggie And Fruit)
Corporate Communications Key In Times Of Crisis
By Bob Oltmanns
This is a story of green onions and Roma tomatoes and how they brought out the worst in one company and the best in another. Both were the ingredients in prepared food products served by two local food service chains. Both were sold to these chains by outside suppliers. And both made the people who ate them terribly sick.
In the first instance, the purveyor of the green onions, the Chi-Chi's restaurant near Beaver Valley Mall, followed what surely must have been a public relations strategy developed before the Age of Enlightenment. Now, in Chi-Chi's defense, it must be noted that several critical steps were taken in the early stages of the now-infamous Hepatitis A outbreak.
Chi-Chi's immediately closed the Beaver Valley Mall restaurant, cooperated fully with the Pennsylvania Department of Health in a complete investigation of the situation and offered to make restitution to anyone who incurred medical costs from the effects of hepatitis caused by eating its green onions. But after that, its public relations strategy drove off a cliff.
From the beginning, Chi-Chi's officials were not available to the media. Any communications to reporters came through one-page statements, and when Chi-Chi's chief operating officer did finally arrive in Beaver more than two weeks after the initial outbreak, he addressed reporters briefly, took no questions and summarily left town.
And what has been the consequence of Chi-Chi's actions now that nine months have passed since the initial hepatitis outbreak? The company, already in bankruptcy when this incident occurred, recently agreed to pay $2 million in the 60 largest lawsuits to people who were sickened for no other reason than they had the misfortune to eat at a Chi-Chi's restaurant. Hundreds more claims are each expected to be settled for $35,000 or less.
In court documents, Chi-Chi's admitted to a "drastic decrease in business sales" at its Pennsylvania restaurants, as well as a significant drop in sales at virtually all Chi-Chi locations nationwide. And from the standpoint of image and perception, which is critical in the highly competitive family restaurant business, the Chi-Chi's brand will long be tainted with the mark of four deaths and 660 more cases of a terrible and frightening illness that occurred while the company stood by and remained silent. Now contrast the Chi-Chi's hepatitis outbreak, or more to the point, the corporate response to the outbreak, to the more recent salmonella outbreak that involves another local brand name, Sheetz.
To a certain extent, the similarities between the Chi-Chi's case and the Sheetz case are remarkable. Both companies were unwitting victims of defective food ingredients provided to them by third-party suppliers. Neither company was ever accused or blamed for having allowed these health risks to have occurred recklessly. That is, good hygiene and safe food handling practices were shown to be required and followed at both Chi-Chi's and Sheetz. Both companies acted quickly and responsibly to do what they reasonably could to cut off the health risk at the source. And Sheetz's offer of restitution to more than 300 affected customers was, by and large, identical to that of Chi-Chi's.
But that's where the similarities end.
Almost immediately after news of the salmonella outbreak reached Sheetz's offices, company executives sprang into action to share all information with the public. Within hours, Steve, Stan and Travis Sheetz were meeting with the local media to answer questions. Patiently and calmly, they accommodated every question, expressed their personal concern for the welfare of their customers and pledged their commitment to do what was right for those who were affected.
And what has been the result? No Sheetz stores have closed. And while it's still too soon to tell if sales will be affected, at least so far, every indication is that Sheetz customers will remain loyal. The few talk show callers threatening lawsuits against the company are being beaten back by -- are you ready? -- the news media.
Unless something seismic happens between now and when the Sheetz salmonella story is finally a thing of the past, history will eventually show that this company's future fortunes were ensured because of its public relations strategy in the early hours after the first reported case of salmonella. Too bad Chi-Chi's didn't order from the same menu.
The lesson for companies of every size and in every industry is that you must not only be prepared for a crisis, but you also have to be responsive and accommodating to the needs of the news media right from the start. Unfortunately, even today, with so many examples to learn from and emulate, most companies practice a "wait and see" approach to crisis communications.
Consequently, when a crisis does occur, they are so consumed with managing the crisis that they have no time and no clue for communicating with the people who matter most -- customers, affected victims, neighbors, local government officials and the news media -- when the need for timely and regular communications is essential.
What's more, too many companies allow their crisis response to be driven by a legal strategy aimed at minimizing their liability in a court of law, and fail to consider the long-term price to be paid in the all-important court of public opinion.
The Ashland Oil case in Pittsburgh (in which 750,000 gallons of oil spilled into the Monongahela River in 1988 when a storage tank ruptured), the Johnson & Johnson Tylenol case, the Diet Pepsi syringe case (in which a number of people falsely represented that they had found syringes in cans of Diet Pepsi in 1993) and countless others all illustrate the profound importance of planned, aggressive, and well-managed crisis communications practices.
Each of these cases has a common thread of planning and a commitment from company leadership to be ready for a crisis when it occurs, to communicate openly and frequently and to demonstrate responsible corporate stewardship of the public trust. And it seems clear that all of the companies at the heart of these successful cases knew and understood that the news media can, indeed, help you as easily as it can hurt you.
A crisis tells us a lot about a company. It tells you what kind of people are leading it, what kind of culture drives it, what its values are and how much it really cares about people, among other things. My guess is that many people have drawn their own conclusions about those in charge at Chi-Chi's and Sheetz based on their corporate response to these two crises.
But any company can be the unsuspecting victim of a crisis. What separates truly successful companies from others is that in times of crisis, the best companies control their destiny rather than being controlled by it -- a pretty simple recipe for keeping any business out of the soup.
Bob Oltmanns is the president of Skutski & Oltmanns, a public relations firm in Pittsburgh. He can be reached at oltmanns@skutski.com.
Double Takes On Martha
Editor's Note: Cary Pfeffer's article in the 8-1-04 issue of "Crisis Manager," entitled "Martha's Incredible Items," drew some interesting and diverse responses from two readers.
Comments by Richard Paulson, APR, Communications Counsel
Martha was playing to her audience. She had the right to refuse to accept the court's judgment. Martha was obviously playing to those who believed that she was charged purely for the publicity the government could attain, in lieu of charging those who had 'really' committed a crime.
For those who believed Martha to be an unfairly maligned 'good guy,' mentioning the company was totally appropriate. After all, she reasoned, an out-of-control government prosecutor (forgive the hyperbole) should not be allowed to further damage a wonderful company.
You gotta give her credit for consistency.
Comments by "Coach Bob" Aronson, Media Trainer, The Aronson Partnership
Martha Stewart's comments were incredibly self-serving. Take the issue of her employees (one that was totally ignored) She missed a marvelous opportunity to thank and support them. If she thought about anyone but herself she could have said, "It is the thousands of employees for whom I feel badly. They made this company successful and I want to express my gratitude to them and apologize for my bad judgment."
As to her admonishment to "buy her products" she could have said, "Please consider buying my products, not for me, but to save the jobs of these wonderful people who had nothing to do with any of this. They should not have to pay for my errors." At least she should have said something along those lines.
Her comments were so self-serving she deserves to go to jail and stay there. Did you get the feeling that the lawyers were in complete control of communications?
Bush Team Forgets A Lesson From Watergate
By Jonathan Bernstein
One of the greatest ironies about Watergate and Richard Nixon's obsession about doing whatever it took to get re-elected is that, according to many people more expert on this subject than I, President Nixon didn't NEED to engage in such activities in order to win based on his overall popularity prior to revelation of that crime.
Time has passed since Watergate, and the Bush Re-Election Team -- whoever was involved in supporting, encouraging, coaching and/or advising the "Swift Boat Veterans for Truth" gang - seems not to realize that with popularity polls running about 50-50 for the two candidates, the incumbent almost always has the advantage. He's the champ, the guy you have to out-score, not just tie with. So they engaged in another form of "dirty tricks," doing a National Enquirer-like look at Kerry's military history, and it backfired.
Did it sow any doubt amongst Kerry supporters? It doesn't appear so, and to the degree it did, it probably disgusted even more potential Bush supporters, particularly those who were already uncomfortable with having a war-time commander-in-chief who had never served in combat himself.
Do I believe that all combat medals were awarded for good cause? No. I do know, for an absolute fact, that military performance evaluations were (at least in that era, when I served from 1972-77) typically exaggerated. Anything less than the highest marks was almost a guarantee of no promotion at that time. But the fact remains that John Kerry served honorably in a combat zone and George Bush didn't. There is no contest.
If George Bush chose, instead, to focus on the courage simply required to BE president at a time when being the president of this country makes you the #1 target of terrorists everywhere, THAT would be something that people could favorably compare with the combat service of another candidate.
Clearly, the Bush campaign team tried to encourage some nasty mine-laying by the Swift Boat vets. But equally clearly, whoever was planting the "hearsay explosives" had never trained with Claymore mines, which were widely used in Vietnam. Y'see, Claymores are essentially uni-directional devices that spray a large amount of ball bearing-like objects in one direction. So you have to remember to turn the FRONT TOWARDS ENEMY label on the face of a Claymore in the right direction before arming the mine. Oh, and you also have to remember that, in Vietnam, Viet Cong sappers liked to creep in during the night and turn the Claymores around, so that it blew up GIs returning to reset or check them. But I suspect the Kerry team, metaphorically speaking, already knew about the latter trick.
CRISIS MANAGER BUSINESS ANNOUNCEMENTS
Attention PR Agencies, Media Trainers, And Professors!
Agencies and trainers: If you do not have your own media training manual, you might like the fact that you can add your own name to the cover of "Keeping the Wolves at Bay: A Media Training Manual" AND you can add material (e.g., company background info) inside. This customization is subject to ordering at least 20 copies of the manual (at a quantity discount).
Professors: The manual is now being used as a textbook in PR and related courses. Arrangements can be made to provide it at a discount price to your classes or for the publication to be sold through your campus bookstore.
Everyone else -- you can, of course, purchase the manual and other educational/training materials at www.thecrisismanager.com.
Second Opinion And Spot Consulting
While I love to have clients with a wide range of needs, I'm quite willing and happy to provide spot consulting on an hourly basis. It's not uncommon for organizations to want just a second opinion about a breaking issue, or a quick review of their existing crisis preparedness plans. I keep such consulting very simple from a business perspective -- hourly fees for engagements under 10 hours are paid by credit card. Call (626) 825-3838 or write to jonathan@bernsteincrisismanagement.com.
PLAIN ENGLISH DISCLOSURE
Bernstein Crisis Management, Inc. has formal or informal co-promotional and mutually beneficial business associations with a number of the services we mention periodically in this newsletter. No, we can't go into details because that's confidential, proprietary, etc. But our relationship is NOT "arm's distance" and you should know that, since we regularly write about these services as we use them for crisis and issues management or other purposes. That said, you should also know that Bernstein Crisis Management sought the relationships because its staff is convinced that these services are the best of their kind for Bernstein Crisis Management's needs and those of its clients. If you have any questions about these relationships, please contact Jonathan Bernstein, (626) 825-3838.
ABOUT THE EDITOR & PUBLISHER
Jonathan Bernstein is president of Bernstein Crisis Management, Inc., www.bernsteincrisismanagement.com, a national crisis management public relations agency providing 24/7 access to crisis response professionals. The agency engages in the full spectrum of crisis management services: crisis prevention, response, planning & training. He has been in the public relations field since 1982, following five-year stints in both military intelligence and investigative reporting. Write to jonathan@bernsteincrisismanagement.com.
Bernstein Crisis Management, Inc. is located at 1013 Orange Avenue, Monrovia, CA 91016. Telephone: (626) 825-3838.
GUEST AUTHORS
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LINKS
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