Burlington/ACME, International Olympic Committee
When I was at Lotus Development in the 1980s, we went through a phase during which the media delighted in calling the company "arrogant." To combat that image, corporate communications proposed forcing anyone who contributed to our reputation for arrogance to wear an embroidered scarlet A on his or her chest. But since our CEO didn't look good in scarlet, the idea never got very far. Maybe some of you might have more luck with this concept.
If you're stuck with an arrogant CEO, I wish you luck, because sooner or later you will end up on the wrong end of this column. Unfortunately, that is what landed both Burlington Coat Factory and it's supplier, Acme International, in the headlines last month.
In case you missed the story, as part of a comprehensive investigation of world fur practices, the Humane Society of America discovered that a batch of Burlington Coat Factory parkas was trimmed with dog fur, not coyote fur as advertised. To no one's surprise, Burlington immediately pointed the finger at its supplier, Acme International, which just as quickly pointed the finger at its Chinese manufacturers.
To all of them I say: "Own the problem."
People have a natural tendency to think that blaming others will somehow diffuse an issue. Burlington gets kudos for at least expressing compassion and concern and taking immediate action. However, Stanley Mankin, Acme's CEO, deserves the scarlet "A" for repeatedly saying that he "did nothing wrong." The Chinese spokespeople were even worse, asserting only that it's commonplace to export dog and cat, rendering suspect any fur they now export to the U.S.
On another topic, what is it about sports this year? It seems that every time I sit down to write this column, there's another crisis involving an athletic organization. Now, the International Olympic Committee is embroiled in an enormous bribery scandal. Many people assume that just because you are a non-profit organization you are immune to crisis. Wrong!
At least the IOC's apologies and contrition were communicated up front. If anything, they may have done a little over-communicating. (Note: we realize this controversy is ongoing. This column is based on how the IOC responded when the crisis first hit.)
Burlington/Acme
Criteria:
Extent of coverage
Grade: D
Comments: ABC, NBC, CBS, CNN and other big-name news outlets jumped on this one. On an impression-per-coat basis, this story was amazing. The bottom line was that the pet fur was only found on about 480 coats out of the five million they sell each year, yet the story made headlines just about everywhere.
Advice: Publishers' statistics show that stories involving pets are always among the most read; therefore, journalists are always looking for the "man bites dog" story - and this one was just about perfect. If you have a problem involving animals, the chances of it developing into a well-exposed crisis are pretty darn good. There's usually not much you can do about the extent of coverage in this case, just be ready to handle it.
Criteria: Effectiveness of spokespeople
Grade: C+
Comments: Burlington may have preferred that someone other than Mankin represent the supply chain in this crisis, but since he was the one to actually supply the coats, he became the logical fall guy. Unfortunately, his arrogance and lack of media savvy were painfully apparent in the press coverage. This image was emphasized by his unbelievable comment that he assumed a Mongolian dog and a coyote were the same thing.
He reiterated that he "had done nothing wrong," which is the opposite of the compassion, concern and remedy formula that a crisis requires.
Still, Burlington appeared reasonably well-prepared to respond to the media. It effectively conveyed that it was revolted by the findings but appeared less prepared when asked to explain coat tags that clearly read "dog."
Advice: This is a great example of why you need to choose spokespeople very carefully as well as remember that when you point fingers, you are directing the media to your defacto spokesperson. The first rule is convey care, compassion, concern and remedy immediately. Only then worry about "spin."
Criteria: Communication of key messages
Grade: B-
Comments: In the beginning, Burlington managed to get the "we're-very-upset-about-this" message across. Signifying Burlington's preparedness, several concrete steps to be taken were well-communicated by the press. On the other hand, space for other Burlington messages became limited as media attention turned to Acme and China as the real source of the dog/cat fur debacle.
Advice: When you are targeted by a special interest group, assume that their PR people are more proficient and creative than those who work at the White House. Communicating messages is what they do-24 hours a day, 365 days a year. You can't beat them, you can only work with them to remedy the problem. Burlington benefited from working with the Humane Society, which helped position it as a victim, versus culprit.
Criteria: Management of negative messages
Grade: D
Comments: By pointing fingers at Acme and China, Burlington sent a message far and wide about the level of responsibility it was unwilling to live up to.
P.S. The Humane Society gets an "A" for ensuring that all negative messages about this practice received the widest possible dissemination.
Advice: Be careful what you wish for. You may really want the issue (and the media following it) to go away, but be sure it goes in the right direction. Let it go while leaving your image in the best shape.
Criteria: Impact on customers
Grade: B
Comments: The true impact won't be felt for awhile. Will pet-loving consumers now be suspicious of anything that comes from Burlington Coat Factory? The company recognized that giving people their money back may not be enough and took a role in backing fur import legislation and making charitable donations.
Advice: Make it easy for offended customers to remedy the problem. That's your first step, but more action will be needed to convince the public of your long-term sincerity. Taking a leadership role on legislation and charitable donations should be considered. But don't forget: company changes that prevent the crisis from happening again must also be demonstrated.
Criteria: Impact on investors
Grade: B-
Comments: The stock dropped 81 cents when the news broke. Clearly investors weren't overly concerned. The Internet chat was ferocious, however - potentially scaring away a few investors.
Advice: Savvy investors also analyze your supply chain. To the extent that you can influence suppliers, make sure they present to your investors a consistent image of the market. This is very much an issue to address up front.
Criteria: Impact on employees and prospective employees
Grade: B
Comments: I pity the poor store clerks dealing with upset pet lovers in the middle of the busy holiday season. As mentioned in my last column (12/21/98) concerning retail crises, keep those who create your public face informed. This is crucial to successful customer service interactions.
Advice: Research shows that the biggest impact on customer loyalty is employee attitude. Make sure your employees are thoroughly informed and educated about what's going on and that you proactively address their concerns.
Criteria: Overall score
Grade: B-
Comments: Burlington did the right thing by taking action and expressing concern. Its early work with the Humane Society helped a great deal. Its image was negatively effected by unpolished suppliers. And how the crisis could happen in the first place was not sufficiently explained or remedied.
Advice: Be careful with whom you partner. In this day and age of numerous interlocking partnerships and complex arrangements, the halo effect ensures that no link in the supply chain is immune to scandal. While you may not have much control over other links in the chain, you can at least check if your partners are media trained and know the crisis messages.
International Olympic Committee (IOC)
Criteria:
Extent of coverage
Grade: F
Comments: What do you expect when it relates to arguably the biggest international sporting event in the world? This story has the potential to eclipse Monica-gate in total worldwide coverage.
Advice: As you plan your crisis communications, remember that today, eveything is international. You are just as likely to get a call from the Sydney Morning Herald as you are from the Boston Herald.
Criteria: Effectiveness of spokespeople
Grade: B-
Comments: IOC's spokespeople are a mixed bag. Perhaps the most eloquent was IOC Executive Board Member Anita De Frantz, whose only comment was: "[The issue] is important enough for me not to opine about it." Unfortunately, other IOC members were not so reticent, and their comments even became the source of further controversy. IOC President finally muzzled long-time board member Marc Hodler, and to complicate matters, the Salt Lake City Organizing Committee, the American Olympic Committee and about a dozen other bodies were all being interviewed simultaneously. It was a scattered and ugly moment in Olympic history.
Advice: When you are a non-profit and dealing with volunteers, the job of crisis communications becomes 100 times harder. You have essentially no leverage. It's very hard to simply remove someone who isn't drawing a paycheck. The best advice is to set guidelines about who can speak to whom and when and to review the rules regularly.
Criteria: Communication of key messages
Grade: B
Comments: The IOC did a great job of expressing care and concern and of being forthright about who was or was not to blame. Unfortunately, everyone in the Olympic family was tainted by this scandal.
Advice: No matter how hard you try to control your messages, the overall impact will always be beyond your control. The best you can hope for is to be true to your mission, communicate your own position, influence what you can, and don't waste time, effort and energy on what you can't.
Criteria: Management of negative messages
Grade: F
Comments: The overriding message was one of widespread corruption. Marc Hodler's accusations of payments for votes, though as of this writing unproven, will be remembered longest.
Advice: The power of rumor and innuendo is astounding, and growing*just ask anyone in Washington, D.C. The only way to disprove it is with facts, figures and documentation. Words alone have little effect.
Criteria: Impact on attendees
Grade: C
Comments: It is as yet unclear whether the scandal will have any impact on attendance or involvement in either the Sydney or Salt Lake 2002 games. If investigations drag on, some impact will happen. But if the incident is wrapped up early in 1999, impact will be minimal.
Advice: Memories are short (at least that's what the IOC hopes!). But the only way they'll know is by asking customers. Keep in mind that after any crisis it is crucial to poll audiences to understand long-term impact and how to redeem your organization.
Criteria: Impact on sponsors
Grade: D
Comments: Already, US West is reconsidering its sponsorship. And who can blame this company? No corporation wants to be associated with a corrupt event.
Advice: If crisis hits a non-profit, your first call should be to your biggest sponsor. Keep them informed; in the loop; even ask for their input. The last thing you want is for them to hear it first in the media.
Criteria: Impact on volunteers and athletes
Grade: C
Comments: The essential prestige of the Olympics may have been seriously damaged. The outcome of the investigations will need to be assessed.
Advice: When overall reputation is involved, do not rely on gut feelings when making remarks or decisions. You must employ continuous "pulse checks" of your employees, volunteers, etc. to realize the extent of the damage and the impact it will have on producing a well-run event.
Criteria: Overall
Grade: C-
Comments: This was not a crisis that could be communicated away. The only answer is to provide the media access to all the facts as swiftly as possible.
Advice: Unequivocal facts are sometimes the only solution. If you don't have the data on hand, get it and get it fast. The faster you can communicate, the faster the crisis remains central to the issue, and not your communications efforts. If proven wrong, take the mea culpa approach. If proven right, tell the world.