Investments in Good Will Eventually Pay Dividends

I recall, after a major chemical spill at my company, an environmental reporter went door to door to find some dirt that would balance his article. He told me later he couldn't find a single neighbor who had anything critical to say about our chemical plant. Therein lies the value of investing in community relations.

Giant Eagle, a supermarket chain based in Pittsburgh, apparently has had similar success. "The online site Wallet Pop ranked Giant Eagle among the top 5 least favorite grocery stores, according to a report by WPXI last week. (http://www.wpxi.com/news/23910130/detail.html) Complaints from the survey stated that Giant Eagle's prices were high, sales weren't always recognized at the checkout, produce wasn't always fresh, and the quality of the meat was questioned.
A union group attempting to organize workers seized on the opportunity to its own advantage. "Representatives from the UFCW said the group is charging the company with squelching workers' right to free speech and threatening employees if they wear member stickers or talk about their contract. 'We should not lose our constitutional protections the minute we clock in,' said Derek Watson, an employee of Giant Eagle and union member. 'They are trying to take away our rights like they own us and that is not only unfair, it's not legal.'" The company accused union organizers of harassing customers after the release of the negative survey results.

At the Institute for Crisis Management, we regularly run into business leaders who claim, "No crisis will ever happen on my watch." Bull-oney! No CEO could prevent the release of negative survey results or mud slinging by union organizers. However, last week's negative news about Giant Eagle bounced off the company's back because of the good work it had invested to satisfy its customers. Even though the on-line survey was critical of the supermarket, when a reporter went looking for unhappy customers, she didn't find any because of the way the company treated its real customers. It could have been easy to find customers willing to bad-mouth Giant Eagle. Instead, all the TV station could find was happy customers glad to speak positively about the grocer.

"'I'm very shocked because it's great, very good to kids. Everything's great.'"

"'Their bakery is wonderful. I've gotten cakes from there for school, for my family. It's a wonderful place.'"

"'It's a real good grocery store. I'm in the grocery business as a salesman. It's one of the best.'"

"'Other stores in this area don't have as much natural food and organic food as Giant Eagle.'"

Giant Eagle issued a statement that claimed its own surveys showed favorable comments from its customers. People in the store backed that claim.

What would your customers and other stakeholders say about your organization? If you said you enjoyed a positive reputation, would your stakeholders back you up, as customers did for Giant Eagle? It's important to make regular deposits into your bank account of good will. If you fail to deposit enough into your account, there will be nothing there to withdraw when someone has negative things to say about your organization.

Hayward Out As Lead On BP Leak

He's out, then he's in. Then he's out again. I'm talking about Tony Hayward, CEO of BP. He has become a poster child for the Institute for Crisis Management's mantra that you don't use the top guy to be your spokesperson in a crisis. How can BP salvage credibility after its leader messes up in front of the news media?

Don't let your CEO, chairman, director, or head honcho be your spokesperson in a crisis. Let him or her express sympathy, state the company's commitment to returning the situation to normal, and then say, "I'm going to work on solving this problem. Joe Blow here can answer any questions you may have." You business leaders: put your egos aside. Hayward failed to do so with disastrous results.

Tony Hayward Making Defense Harder and Harder

I have defended BP and the job it is doing in communicating with its stakeholders. But that defense is getting harder to justify. The CEO last weekend said that Hayward was being relieved of his on-site responsibilities. But Hayward is still there. We're now being told his spokesperson role is ended, but his management role controlling the spill remains. Larry Smith has taken the words from my mouth in his blog, http://www.crisisconsultants.blogspot.com/.

Say what you want to say about Hayward and his management of the spill. I'm not up to speed technically. But I do have a strong opinion regarding his failure to communicate properly. The company has done a good job, as demonstrated by its website (http://www.bp.com/bodycopyarticle.do?categoryId=1&contentId=7052055). But Hayward has become a communications liability. Yacht races, anyone?

Ethics: "What Does This Have To Do With Our Election?" (Rand Paul, Kentucky)

For my blog, I decided to stay away from the two topics where you can't win: religion and politics. The post below dabbles in religion. This post deals with politics. I can't resist.

But I'm concerned about Rand Paul, a tea party darling and Republican candidate for the Senate representing Kentucky. He has made national news since his primary victory, accused of being anti-civil rights with his comments that businesses should be able to deny service to anyone they choose to dislike. It seems we are always in some political crisis, but this one is about to explode. It's the first time I remember watching a train go by and rooting for it to derail.

The Courier-Journal (Louisville, Kentucky) on page 1 of Sunday's edition carries a story that claims the American Board of Medical Specialties says Paul isn't a certified opthamologist, as he claims to be. Instead, he is certified by the National Board of Opthamology, a group he incorporated and leads. His group isn't recognized by the American Board of Specialties.

Shortly before his Republican primary win, Paul told The Courier-Journal he was certified by both the American Academy of Opthamology and the American Board of Opthamology, both recognized by the American Board of Medical Specialties. He was not. He allowed his American Board of Opthamology certification to expire in 2006. Since then, Paul has only been certified by his own organization.

I don't want to suggest that Paul is a bad doctor. I can't find any evidence of that. What I can suggest is that Paul would make a dishonest senator. The Courier-Journal claims it tried to interview Paul at two events yesterday. At the Great Eastern National Gun Show and JAG military show (perhaps the largest tea party gathering since Alice in Wonderland), he told a reporter, "I'm not going to go through all that right now." When asked when he would be willing to address the certification issue, he said, "Uh, you know, never.... What does this have to do with our election?"

I guess Paul may be right. What do honesty and integrity have to do with a Senate election? After all, he is replacing Jim Bunning. He was so bad that minority Senate leader Mitch McConnell of Kentucky urged Bunning not to run for re-election, as did the Republican Party. McConnell backed Paul's opponent in the primary, and now sheepishly supports Paul.

What does any of this have to do with crisis communications? It should teach us to be open and honest. Jesse Benton, Paul's campaign manager, said yesterday after reporters tried to interview Paul that the candidate would only answer questions if submitted in writing. That sounds like a reasonable approach for someone who wants to represent Kentucky in the U.S. Senate. Not! To deal with crises, we have to be transparent. Can you imagine BP's Tony Hayward requiring all reporters' questions be submitted in writing? President Obama? Mitch McConnell? I would love a chance to make some suggestions to Paul about how he could more effectively deal with the state's voting public, which includes reporters.

Definition of Irony: When Sheriffs Are Arrested and Clergy Abuse Children

Here's a riddle. What do the sheriff of Harrison County, Indiana, and the pope have in common?

Give up? Both have crises they think will go away if they ignore them long enough. We all have stakeholders who need reassured that a crisis is being dealt with appropriately, whether it's the tax payers in Harrison County or Catholics worldwide.

Let's look at Harrison County first. The county prosecutor has called in state police and the FBI to investigate an incident involving a corrections officer. It is alleged that he sat an 18-year-old inmate in a restraint chair and then placed a spit mask coated with pepper spray over his head. If you're like me and don't know what a spit mask looks like, see www.projo.com/.../shenews/archives/week155.htm. The county prosecutor claims the sheriff's department didn't investigate. (http://www.courier-journal.com/article/20100611/NEWS02/6110393/FBI++State+police+asked+to+review+new+incident+at+Harrison+jail+involving+Louisville+man)

Sheriff Mike Deatrick, however, claimed that he had investigated and "accounts about the matter have been overblown." Overblown? Judge Roger Davis ordered that the prisoner be released out of fear for the man's safety. The Courier-Journal in Louisville, just across the Ohio River from Harrison County, obtained incident reports of what happened after the prisoner, Tevin Michael Bald, overturned a mop bucket and refused orders to get off a table.Two incident reports written by the guards conflict. Neither report mentions pepper spray, as Bald alleges.

Two jail supervisors wrote that other employees had witnessed the spit mask being sprayed with pepper spray. Nothing happened. So one of those supervisors went to Deatrick, who said, "Do what you have to do." The supervisor fired the guard involved, but Deatrick reinstated him. His reason: "...because he didn't want any grief he might receive," according to a report. Deatrick told a reporter that he reinstated the guard because of conflicting information about the use of pepper spray and the time the spit mask was on Bald's face. In a phone interview with The Courier-Journal, the guard said he did use pepper spray but kept it on Bald for just 10 minutes. Bald claims it was an hour. (If Deatrick really did investigate as he claims, why would there be any doubt about the use of pepper spray when the guard admits it even to a reporter?)

There's more. Deatrick was arrested and indicted by a grand jury three months before all this for sexual battery, insurance fraud, and obstruction of justice. In Indiana, elected officials cannot be removed from office unless convicted of a felony, and so far, Deatrick hasn't been found guilty of anything. County Commissioner James Goldman said, "I'm counting the days" until Deatrick's term expires in December.

Perhaps Bald should just forgive Deatrick and the guards and forget about the civil suit that probably will follow. That's what Pope Benedict XVI thinks should happen for the priests accused of sexual abuse and the bishops who allegedly looked the other way. (http://www.kansas.com/2010/06/12/1356183/pope-asks-forgiveness-for-priests.) At a mass attended by 15,000 priests, Benedict promised to do everything possible to protect children. The victims of the abuse aren't convinced. They want a solid plan to identify pedophile priests, expose the bishops who protected the abusers, and change Vatican policies and culture that let the abuse go on for years.

According to Nicole Winfield of the Associated Press, the mass marked "the Vatican's Year of the Priests — a year marred by revelations of hundreds of new cases of clerical abuse in Europe, Latin America and elsewhere, as well as cover-ups by bishops and evidence of long-standing Vatican inaction." Rather than blame the priests and bishops who committed the atrocities, the pope chose instead to blame the devil, who surely was behind the timing of the scandal during the Year of the Priest, he said.

Winfield quotes Benedict as saying, "'It was to be expected that this new radiance of the priesthood would not be pleasing to the 'enemy;' he would have rather preferred to see it disappear, so that God would ultimately be driven from the world,' Benedict said in his homily, to applause from the priests.

"'And so it happened that in this very year of joy for the sacrament of the priesthood, the sins of priests came to light — particularly the abuse of little ones,' he said.

"'We, too, insistently beg forgiveness from God and from the persons involved, while promising to do everything possible to ensure that such abuse will never occur again,' he said." Other than saying candidates for priesthood would be screened more closely, Benedict hasn't offered any proposals to prevent child abuse by priests now and in the future. I wonder if his being accused of ignoring what the priests under him were doing has anything to do with his stance of prayer-and-forgiveness-will-fix-everything.

Many Catholics, at least in Italy, are okay with the pope's rhetoric and lack of concrete corrective actions. In mid-May, more than 100,000 people showed up at St. Peter's Square in support of Pope Benedict's stance on clerical sex abuse. (http://richarddawkins.net/articles/470988-thousands-flock-to-vatican-to-back-pope-over-abuse) Winfield's article about the huge turnout of support reported, "Benedict said he was comforted by such a 'beautiful and spontaneous show of faith and solidarity' and again denounced what he called the 'sin' that has infected the church and needs to be purified.... banners hung up on Bernini's colonnade encircling the piazza read 'Together with the pope,' and 'Don't be afraid, Jesus won out over evil.'"

He did? Tell that to the victims, whose attackers go free. Isn't the evil the priests who molested children without legal consequences? Nobody won, including Jesus.

What can we learn from this long dissertation? Don't fiddle while the Vatican burns. If you are in crisis or see signs you could be in a crisis later, deal with it. You're not a sheriff; don't count on politics and power and ego to keep you from finding out the truth and communicating it. You're not the pope; don't expect an outpouring of support for saying much and doing little. Keep the victims in mind when you communicate (Remember BP and "I want my life back."), develop a plan for correcting the problems, then communicate that plan with your stakeholders.

Countrywide Broken Up by Theft, Deception, Poor Crisis Response

Countrywide Financial Corp. no longer exists. Bank of America bought it two years ago -- lock, stock, and (over a) barrel. Now BOA has to pay for Countrywide's sins.

Picture this: Countrywide made bad loans in the boom years, foreclosed and made more money in the lean years, and then charged those former homeowners exorbitant fees for things like property inspections and landscaping. It's that last charge that brought a hefty fine to Bank of America. FTC Chairman Jon Leibowitz accused Countrywide of "callous conduct, which took advantage of consumers already at the end of their financial rope." (http://www.baltimoresun.com/business/sns-ap-us-bank-of-america-lending-settlement,0,2386268.story) BOA didn't own Countrywide at the time of the transgressions, but nevertheless is hit with $108 million fine, the largest ever levied against the mortgage industry. Some $200,000 of the settlement will go to those people who were cheated. But that may take a while; Leibowitz called Countrywide's record-keeping "beyond abysmal."

I haven't even gotten to the best part yet. Last year, the Securities and Exchange Commission charged three top executives, including the former CEO, with civil fraud and insider trading.

So the swindled foreclosure victims will get their money back. A badly run company has been swallowed up by one better run (most of the time). And the crooks are, or soon will be, serving time up the river. I guess sometimes bad companies can botch a crisis and get what they deserve. Communications wouldn't have helped unless Countrywide had cleaned up its house first. Business are full of such stories. Don't be the next.

No Silk Purses Exist in the Gulf

I want to draw your attention to an article that appeared in the New York Times last week. (http://www.msnbc.msn.com/id/37504172/ns/us_news-the_new_york_times//) It criticized the communications/public relations efforts of BP. If you'll read my post two items below,you'll see that I take a different view. I don't think anyone could be an effective BP spokesperson while only expressing hope, but never anything positive. The problem here is operational, not communication.

I do agree on at least one thing in the article I mentioned above: Tony Hayward is a liability when dealing with reporters. As I mentioned below, the CEO should rarely be your spokesperson, and this isn't a case of rarely. Some of his quotes from the New York Times: "The spill is not going to cause big problems because the gulf 'is a very big ocean' and 'the environmental impact of this disaster is likely to have been very, very modest.' And this week, he apologized to the families of 11 men who died on the rig for having said, “You know, I’d like my life back.”

BP has made some personnel changes to its communications staff. Hayward should be listening to them. The company brought in the Brunswick Group, a public relations and crisis management firm. BP hired a new head of media relations who is a former aide to Vice President Dick Cheney.

However, this mess can't be fixed through communications. It can be made worse through communications, but no communications are going to make this sow's ear anything except a sow's ear.

Actions Speak Louder Than Words, But the Words Are Important, Too

If your organization is going to have any credibility with its key stakeholders, your communications have to reflect what others are saying and writing about you.

One of he latest examples is a once-smoldering crisis at the Pendleton Juvenile Correction Facility 25 miles north of Indianapolis. It's an all-male maximum-security facility with 391 beds and is operated by the Indiana Department of Corrections. An AP story by Charles Wilson June 5 http://www.journalgazette.net/article/20100605/NEWS07/306059955/1006/NEWS) revealed the results of a study of sexual abuse by staff members and teenage inmates against other residents -- In fact, Pendleton had one of the highest rates of sexual abuse in the United States, Indiana’s corrections commissioner told a federal Review Panel on Prison Rape. Commissioner Edwin G. Buss vowed to take steps to prevent further abuse.

A January Bureau of Justice Statistics report said 36 percent of youths there reported being sexually assaulted by staff or other teens, a rate three times the national average.

The U.S. Department of Justice also is investigating four female staffers who were arrested this year on charges they exchanged explicit cell phone photos or engaged in sex acts with an 18-year-old male inmate. All four were fired.

Among the other steps being taken, according to Wilson's article:

• Emphasizing the policy of zero tolerance for sexual contact.

• Removing solid doors to coat closets and storage rooms to eliminate blind areas.

• Relocating cameras to provide a view of blind spots, installing cameras in laundry and kitchen areas, and creating a video monitoring room that is staffed 18 hours a day.

• Changing hiring to better select staff to work with youth, and considering staff psychological assessments.

It all sounds like good stuff. But I would quarrel with the communications strategy in two areas. First, Pendleton sat on the study for several months. That's okay, as long as the communications staff was prepared for if and when the news got out. There is nothing here to indicate that staff didn't move quickly to implement changes while it was waiting for the sudden crisis to occur. Who are the real stakeholders here? I would say the local board, the state detention board, the commissioner, and elected officials. I hope they all were notified personally before this hit the news.

A bigger issue is the website. Every news release is "bunnies and fluffy clouds." There's no bad news, no mention of the studies, no message from the Pendeton superintendent or the state commissioner about the abuse. That's why I started this post talking about credibility. If all your news releases do is describe wonderful programs, and creative-writing class, and awards, do you still have credibility?

If your smoldering crises go public, you should tell what you've done to correct the problems, sometimes in a news release and almost always on your website. Here is a chance to get out your side of the story. You (and Legal) have complete control over the message. Use it to your advantage. And don't shy away from negative news.

Opinions of BP's Crisis Communications Are Varied

I am disappointed -- but not surprised -- that the Obama administration has acted on public criticism over the BP oil leak. The White House, wanting to look like it's in control, appointed Coast Guard Admiral Thad Allen as national incident commander and spokesperson. He vowed to speak "very frankly to the American public."

I seem to be part of a shrinking minority that believes BP has been frank and open in its communications so far. I can't speak to the technical aspects of stopping the leak because I don't have expertise in stopping gushing oil a mile under the ocean's surface. I have been getting what information I need from CEO Tony Hayward and other company spokespeople. One criticism I would have is that Hayward is used too much. I think he should show a presence and concern. But using the CEO as your primary spokesperson means that if he messes up, BP has nowhere else to turn to regain credibility. At the Institute for Crisis Management, we recommend in most cases that your CEO shouldn't be the primary spokesperson.

If you think BP isn't communicating fully, check out its gulf website at
http://www.bp.com/bodycopyarticle.do?categoryId=1&contentId=7052055. I think it is thorough, informative, and well-done. Deepwater Horizon also has a useful site at http://www.deepwaterhorizonresponse.com/go/site/2931/. I believe the communication is good; it's just the messages that are always bad.

Some of my colleagues disagree with my assessment of BP communications. I belong to an IABC discussion group, which asked what members think of BP's crisis communications. In the interest of balance on this site, here are some excerpts from their reactions. Please tell me what you think.

"...I think that CEO Tony Hayward is doing a terrible job in his spokesman's role. Having the CEO act as spokesman usually lends credibility to crisis communications, so long as the CEO has some skill and comfort in communicating with the media. Hayward does not appear to be up to the job. Yesterday's unfortunate comment, 'I want my life back,' just reinforces the image of BP as an uncaring entity and not fully trustworthy."

"...several un-named employees are now being quoted in the media indicating that the company knew about and ignored a variety of safety concerns. So their main spokesperson is being undermined by undisclosed sources."

"Communication is no substitute for SOLVING THE PROBLEM. At the end of the day this is not about BP, it is about the future of our environment! Perhaps we should start a grass-roots effort to make enormous noise and bring some answers to the surface."

"What communications approach? Between the US government working 'with' BP, the communications focus is entirely lost. The CEO Tony Hayward appears as if he has refused all communications counsel; there is no one person providing the hourly, half-day or daily updates, and the company's voice seems to be entirely missing. Having worked in several crises, it makes me wonder what's going on within the company to lead to this breakdown in communications."

"The best PR can't save you when the internal house is NOT in order, and BP will continue to fail until it can achieve crisis response.... PR has a role to play to help assess risk, and work inside the company to mitigate such risks and prevent these disasters from happening in the first place -- rather than just helping corporations react to them after the fact. Now that the disaster has happened, PR should do its best to facilitate 'truth and reconciliation' on what went wrong, and how to make it right...."

Am I being too soft on BP communications? Are the PR practitioners quoted above being too critical? Where do you stand? Comment, please.

Ash Pile Stirs Community to Action

I proudly remember my company's effort to build a hazardous waste incinerator on Louisville plant property to deal with local and other company-generated hazardous waste. I joined the company after the initial announcement -- and before we announced we were pulling the plug. The company, Rohm and Haas, was smart enough to know it could never get the needed permits if it shoved the project down the community's throats. It would take public acquiescence or better. We wrangled speaking invitations from dozens of local groups, developed publications to explain the process and resulting emissions, and had a model of the incinerator built. We took the plant's Citizens Advisory Council to Germany, the only place in the world with an incinerator similar in design to the one we planned. The day of our first public hearing passed without any negative comments. That's what comes from anticipating and dealing with all the smoldering crises that are part of a controversial project.

That's not the case for E.On US, the parent company -- for now -- of Louisville Gas & Electric Company in Kentucky. It wants to create a storage area for fly ash from its Cane Run generating facility. The waste site will encompass 60 acres and eventually rise as high as a 14-story building. I keep my ear to the ground when it comes to issues in that part of town because I have some clients located there and I know many residents after my years in Rohm and Haas community relations. But I didn't hear anything about the ash dump until the morning before a public hearing when my friend called about it. He heard about it through an environmental group's handout, not from E.On or LG&E. It didn't surprise me at all that no one spoke in favor of nor took a neutral stance on this mountain of ash, which would pile up not far from the Riverside Gardens neighborhood. (http://www.courier-journal.com/article/20100525/NEWS01/5250378/Neighbors+of+proposed+LG&E+coal+combustion+landfill+voice+concerns+at+hearing)
Jim Bruggers, environmental writer for the Louisville Courier-Journal, wrote on his blog, "I'm not sure how much money E.On U.S. spokesman Brian Phillips makes, but he earned his keep last night at the public hearing for the power company's Cane Run coal combustion waste dump. Outnumbered by about 125 to one, you could hear people say, "Where's LG&E," or, "Where's the LG&E guy?" And Phillips, toward the end of the feisty and emotional hearing, found himself cornered in the school's hallway by two angry residents of Riverside Garden neighborhood." (http://watchdogearth.courier-journal.com/)

I've been ambushed at public meetings before, but never at my own meetings. I was always prepared to defuse hostile volleys if my company was host or subject of a meeting. Besides preparation, being known and well-liked in the community makes a huge difference. I once appeared on a controversial radio talk show. The host asked me questions about the company's environmental performance and safety record. Then he opened it up to callers. Not a single person wanted to talk about my company. I must have looked quizzical at the end of the program. He explained, "No one wants to call in to question you because you're too nice."

E.On and LG&E need to do much more front-end work before they can ever get acceptance of the fly ash pile, which it says it needs if it's gong to operate the electric-generating plant into the future. It may be too late now to build that kind of rapport with the neighborhood. But it's never too late to try, especially when millions of dollars in assets are on the line. I learned at Rohm and Haas to always cover my assets.

Lexington Faces Whistle Blower in Layoff

Every employee your organization lays off or terminates is a smoldering crisis and must be treated as such. Fired employees should be escorted to their offices to clean out their desks, and then walked to the street to ensure they aren't taking any sensitive company files with them. Layoffs are seldom in effect the day the employee is informed, so organizations in those cases are more vulnerable to revenge.

In addition to risking the loss of key documents, organizations may risk public or private extortion attempts. Whether the accusations have merit or are simply an effort to embarrass the organization, public finger-pointing is a crisis you may have to deal with. The most recent case of this I am following is taking place in Lexington, Kentucky.

Patrick Johnston, director of the city's Division of Risk Management, is a victim of reorganization. His position is due to be eliminated. Johnston made fraud allegations in 2008 and 2009, but apparently, there was no investigation and no action taken. Johnston has at last gotten the attention of city council members. A special investigative committee is being formed to look into the allegations. (http://www.kentucky.com/2010/06/01/1288279/council-forms-panel-to-probe-fraud.html#ixzz0pcw8lGNZ)

Johnston claims the city is losing money by using the Kentucky League of Cities as an insurance agent (I've written here several times about the exorbitant spending of that group's executives and the resulting crisis.). The city says it has saved money through KLC, but Johnston disputes those numbers. Whether that issue is behind Johnston's fraud allegations is something we don't know. The city is being highly secretive and won't even tell the council members what Johnston alleges. The Lexington Herald-Leader has filed an open-records request, which was denied and now is being appealed.

Meanwhile, Johston has successfully delayed the reorganization of his department until it can be determined if elimination of his position is retaliation for his fraud claims. This issue has the makings of an expensive mess for the city of Lexington. Why weren't the allegations investigated two years ago? And why isn't Mayor Jim Newberry being up front and open if he has nothing to hide? Of course, I don't have the inside scoop. But looking through the windows from the outside, this has the look of a smoldering crisis no one dealt with until it blew up in their faces.