While companies are becoming increasingly skilled at managing modern crises, they nevertheless continue to face a losing battle. First, their opposition – labor unions,
environmental activists and others – are continuously reinventing the way they communicate. Second, science and technology continue to yield new types of crises that companies
have never handled before.
Taco Bell, a company that suffered through a horrendous meat contamination crisis a decade ago, has become a leading voice for new standards for meat safety. Not only did the
company learn from its earlier mistakes, it consistently worked to ensure that such a crisis would never occur again. So I can only imagine the groans in its PR department last
month when its store brand taco shells (which are licensed and distributed by Kraft Foods) were found to contain genetically modified corn that had not been approved for human
consumption. Just when you think you've gotten it right, technology comes along and bites you. Never mind that Taco Bell the restaurant doesn't even use the same taco shell
supplier as Kraft. In this "brand-centric" world, who knew the difference?
A similarly effective opposition was waged in the Screen Actors Guild (SAG) boycott of three Procter & Gamble brands. Granted, SAG has an unusual army of famous faces at
its command. (Nothing like having Eli Wallach refusing to brush with Crest.) But as the actors and management reached a settlement shortly after the threatened boycott, many
activists left with the impression that the tactic worked. Again, the issue at hand was a 21st century problem – union reps and advertisers were arguing over how actors will get
paid for commercials that air only on the Internet. To bring the theme home, SAG launched a massive email campaign to win support for its cause – including 2.5 million emailed
videos.
Katharine Delahaye Paine is president of Delahaye Medialink (603/431-0111).
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Criteria
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Comments
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Advice
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| Extent of coverage | D | Coverage of the recall was widespread, and had considerable legs - reaching local papers in farm belt towns, as well as international papers. Even worse: with each new discovery of more misappropriated corn, the story made headlines again. |
When it's a hot topic, there's little you can do to control media interest. The best you can hope for is that it will blow over quickly (in this case it didn't). Fast action to unearth all problems is the best defense. |
| Effectiveness of spokespeople | C | No specific Kraft spokespeople were quoted directly (Taco Bell took the biggest hit, given it's brand name took center stage). Nevertheless, Kraft managed to convey that it could be trusted to act responsibly and to take quick action in resolving the problem. |
Cooperation in crisis will be a cornerstone of the 21st century. The linchpin of the success behind this crisis response was how well the affected companies coordinated their messages. Kraft, Safeway and Mission Foods all expressed concern over consumer safety, and reiterated a collective commitment to swift action. Even Aventis, which produces the seeds for "StarLink" corn, was appropriately contrite, helpful and cooperative with authorities. " |
| Communication of key messages | B | Kraft's response on its Web site, listing recommendations to the FDA on how to handle genetically modified food in the future, helped position the company as a responsible industry leader. |
In this day and age a "crisis Web site" is not optional. It is an absolute necessity. |
| Management of negative messages | B- | "While swift actions and coordinated messages kept damage at a minimum for Kraft, the crisis was far more serious for the agricultural community. The fact that one strain of corn could find its way into so many products and geographic regions (despite restrictions on its sale) dramatically pointed up the hazards of introducing genetically modified foods into the food chain. |
As difficult as it might be to keep an eye on the bigger picture when reporters are calling non-stop, it makes sense to take step back and craft a broad messaging strategy. Activist groups suffered from myopia as much as the food companies did. By exploiting a situation that had relatively minor health risks, they damaged their long-term credibility with the media. " |
| Impact on customers | C | "Kraft did as well as it could, under the circumstances, to minimize reputational damage to its consumer brands. However, subsequent findings of StarLink corn (the non-FDA approved seed variety) in other non-Kraft products may prompt consumers to stay away from those types of foods in general. A key factor will be the degree to which the U.S. media follows the lead of its international counterparts in publicizing such hazards. |
Crisis communication is the PR equivalent of a high-pressure paint sprayer. At first you're amazed at how quickly and efficiently it works. Then your realize you've over-sprayed into the living room which is now an unintentional shade of chartreuse. Neither the media, nor consumers have very good understanding of where one brand or product stops and another one begins. Make it as easy as possible for your customers to understand. |
| Impact on stock price | A | Analysts clearly were better informed than the consumers, and Kraft's stock price barely moved. |
By the time a crisis hits, it's probably too late to inform financial analysts. Explain early and often any potential threat and any confusing brand issues. " |
| Impact on employees | B | "The fact that the recall was handled artfully should give employees a sense of pride. However, concerns about the long-term impact on the industry and about the availability of uncontaminated corn may hurt sales in the future and sour staff morale." |
Keep employees totally informed during every step of the crisis. Reassure them that their jobs are secure. |
| Overall score | B | Kraft's communications efforts were well orchestrated and professional. |
Learn from your mistakes. Know more about the topic that the government or the opposition. Become the expert source on safety in your industry. |
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Criteria
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Grade
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Comments
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Advice
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| Extent of coverage | D | "It's hard to resist tide-shifts driven by famous people. In this entertainment-driven, celebrity-obsessed culture, it wasn't hard for the Screen Actors Guild to attract heaps of media attention. Add to that the Internet element, and the result was exceptionally broad coverage. |
When your company's reputation clashes with pop culture, chances are pop culture will win. Unless you have exceptional spokespeople, the media will nearly always prefer to interview a celebrity. |
| Effectiveness of spokespeople | D | "P&G's messaging strategy made sense. The problem was that there was no personality behind it, so the personalities on the other side dominated the conversation. While the message was correct in pointing out that SAG had selected P&G as a scapegoat (SAG members actually had beefs with the entire advertising industry) the media didn't pick up on that angle. |
Use the highest-level spokesperson you can find. P&G had a new CEO and would have done well to use him as counter to outspoken celebrities. |
| Communication of key messages | B | P&G's message that it had been unfairly singled out came through loud and clear in almost every article. But the company appeared defensive. |
If possible, pre-test your messages with the most skeptical people you know. Saying ""everyone does it,"" or ""we're not that bad"" is always a mistake. The media will naturally take a dark view of just about anything a company has to say. Make sure your key points don't come across with a tone or attitude you don't intend. " |
| Containment of negative messages | C | "P&G's unintended entrée into the media spotlight proved to be a double whammy. The company was simultaneously hit with a number of negative statements about its financial health, as numerous reporters mentioned, in the context of SAG stories, that P&G was having a bad year in the markets. |
Beware of focusing on the immediate issue (in this case the strike) with tunnel vision precision. It is the media's job to put events into context and perspective. You need to be one step ahead of them. Always remember the last story a reporter wrote about you. It will inevitably color what he/she has to say this time. |
| Impact on customers | B | "The opposing parties sat down at the negotiating table shortly after the boycott was announced; it was over so quickly that the Internet campaign barely had time to get underway. Additionally, P&G has always distanced its corporate brand from its consumer brands, so customers barely connected the dots between the strike and their buying preferences. |
This case makes a strong argument for good brand management, and the separation of a corporate brand from consumer product brands. Consumers have a hard enough time remembering which products are politically correct to purchase, much less which ones fall under the P&G umbrella." |
| Impact on stock price | C+ | "While P&G's stock took a hit the day the boycott was announced, it soon recovered. |
Wall Street is far less impressed with boycotts than are the people who initiate them. Most boycotts have relatively little direct impact. Nevertheless, analysts are always concerned with the impact a boycott may exert on a company's overall brand reputation. " |
| Impact on employees | B | "No doubt, union members who work for P&G would have been affected by a boycott. As labor advocates, they might have felt inclined to sympathize with the union side of this debate (in this case, actors). But, in the end, they probably would have continued to support the products that yield their paychecks. |
Union members will always be sympathetic to the motivating factors behind strikes and boycotts. As such, it's critical to monitor internal morale during labor issues. |
| Overall | C+ | "In the end the boycott was short-lived, and the crisis dissipated quickly - a true sign of success. |
In this century, everything has an online component. When you're planning a crisis strategy, be prepared for assaults from all directions. " |