SIGNET BANK ON THE MONEY WITH HANDLING OF FRAUD CASE

In this issue, the Image Patrol examines how McDonald's handled the McLibel trial in England and how Signet Bank handled a major bank fraud. If you'd like to submit your crisis to the Image Patrol, please contact us via e-mail at [email protected] or by fax at 1-603-431-0669.

McDonald's:

The facts: In 1994 McDonald's U.K. sued two impoverished protesters for libel over a six page factsheet entitled "What's Wrong With McDonald's -- Everything They Don't Want You To Know" that they were distributing in front of a London McDonald's restaurant. It has since become the longest trial in U.K. history - lasting some 313 days and costing millions of dollars.

Worse still for the company's image, the trial - dubbed McLibel - spawned hundreds of articles lampooning and lambasting the company. In addition, an entire Web site has been created to focus further attention on the case. A spokeswoman claims that the site has been visited four million times.

And while the decision to pursue the case was entirely that of McDonald's U.K. there is no question that deleterious effects on McDonald's image have found their way across the pond and around the world. Coverage of the trial appeared in everything from Food and Drink Daily to the New York Times, Melbourne Age and the Jakarta Post.

Criteria	Grade	Comments	Advice
Extent of coverage	F	They could have made whole thing go away, but instead promoted the defendant's cause by making it an international incident.	When the situation is clearly lose/lose it's time to fold up the tent.
Effectiveness of spokespeople	C	Available, but had little opportunity to come across as anything but arrogant	Remember, Goliath lost.
Communication of messages	B	The point of going to court was to get out the message that McDonald's food was not bad for you. Initial press reports communicated that message, but subsequent coverage has done a better job communicating for opposition and has positioned McDonald's as the bully.	Quit while you're ahead.
Management of negative issues	F	By pursuing the case, McDonald's created a perfect forum for the other side to broadcast all their negative messages.	Do whatever it takes to keep those negative messages out of print, including dropping a lawsuit.
Impact on customers	D	Many people all over the world who never questioned the health implications of eating at McDonald's may now do so as a result of the broad communication of the allegations.	Convey to customers around the world that McDonald's is committed to providing nutritious meals.
Impact on employees, prospective employees	C	Employees presumably have a better understanding of the case and thus won't see the negative impact.	Employees will no doubt be questioned ad nauseum when the decision is announced, if they haven't already been. Be forthcoming and provide them with as much information as possible.
Overall Score	D+	McDonald's may not have created the crisis but it has done everything possible to prolong it, and in doing so erased any gains it made. It is now perceived as the bully in this classic "David & Goliath" struggle. It has also given tremendous exposure to issues of nutrition and food safety, that didn't exist amongst the general public before this case.	Make nutrition and food safety a major strategic initiative. Also, make sure that concern for customers' health and welfare comes across more strongly than messages about expansion or marketing hype.

Signet Bank:

The facts: On March 19, 1996, the FBI arrested Edward J. Reiners and Judy Rose Bachiman on charges of bank fraud.

The two individuals had completed fraudulent loan transactions totaling $254 million to finance computer equipment leases.

Signet Bank was one of eight financial institutions involved in the fraud case.

The investigation, with which Signet Bank officials had cooperated, had been going for some time and was one of the largest in banking history.

Criteria	Grade	Comments	Advice
Extent of coverage	B	Coverage was widespread but focused mostly on the wrongdoing and not on the banks who made the loans. It also dropped off dramatically after the initial news story broke.	Acknowledge the problem, cooperate with authorities, and reassure investors that it won't break the bank, so to speak.
Effectiveness of spokespeople	B+	In an unusual move, the CEO was almost invisible in most of the coverage. The company spokesperson PR Director Teri Shrettenbrunner handled most of the interviews. She did an excellent job, but may have left some people wondering where the top guy during in all of this.	At least initially, make sure that the CEO is at least visible if not necessarily in front of the media. A missing CEO to a reporter is a red flag that someone is hiding from something.
Communication of key messages	A	Signet consistently got its message across that they were not the only bank involved and that the fraud would not damage the bank.	Articulate one message, over and over and over again.
Management of negative messages	A	Minimal amount of negative coverage.	Be so accessible to reporters that there's no way to get the story wrong.
Impact on customers	A	Essentially the incident had little impact on consumers, even business customers were unaffected.	Most coverage was limited to the business sections of the newspapers.
Impact on employees, and prospective employees	B	Much of the coverage was local, which meant that employees may have gotten a significant amount of their information from local papers. If any one audience could have been negatively impacted, employees were probably most vulnerable.	Make sure employees get all their news from the most credible sources -- top management or supervisors.
Overall Score	A	An exceptional job of handling a crisis.	Assuming there really aren't any negative implications, make sure you go back to the reporters, investors and customers and tell them that. Image Patrol

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