November 19, 2012
While I’m not usually a political or news junkie, in looking at the activity of the past few weeks, it’s been quite a few weeks! It ranged from the saga of David Petraeus to the absurdity of a famed Nascar driver intentionally crashing a competitor (resulting in fist fights between the crews), brands' use of Twitter during Hurricane Sandy (the good and the not so good), and finally the culmination of BP pleading guilty to 14 criminal charges and paying a record $4.5 billion in fines and penalties resulting from the 2010 oil rig explosion in the Gulf of Mexico. Each of these stories highlights how important it is to have a strategy in place to protect your brand in times of crisis. While every one of these examples is interesting, in this post, I’ll concentrate on the insights we can gain from the Petreaus and BP incidents to manage brands effectively through a crisis.
Watching a stellar career blow up overnight is a stark reminder of how a carefully-built brand reputation for honesty and integrity can disintegrate over one misstep. Over the past week or so, we watched the Petraeus scandal spiral out of control, fueled by the news media and the power of social media. And while the latest blow to BP delivers a hit to its bottom line, the negative impact on its brand may prove to be more costly in the long run. James S. O'Rourke, a professor at the University of Notre Dame and an expert in business communications and reputation management, commented in a recent Los Angeles Times article that "the real fallout [for BP] is not financial; the real fallout is one of trust.”
Both of these recent incidents should be a wake-up call to marketing leaders to be sure that there is a crisis management plan in place that can be activated at a moment’s notice to protect the core attributes and reputation of the brand that B2B companies have so carefully built up.
Why is this even more important to CMOs now? Customer expectations of brands have dramatically increased in the past few years. Empowered customers establish control of how they want to interact with and share their perception of brands with others. Forrester Research’s recent 21st Century Brand Marketing Playbook identifies these new consumer expectations as well as the importance of a brand being TRUE: 1) trusted; 2) remarkable; 3) unmistakable; and 4) essential. Specifically, trust is something we earn from our customers by delivering a transparent experience that builds and maintains brand preference and willingness to recommend, which are customer actions that are critical to our success in the connected and socially empowered world we live in today.
So, what lessons can the Petraeus and BP experiences teach you about managing your B2B brand?
- Your brand health — personal or corporate — depends on every circumstance and experience. While trust takes time to build, it can be destroyed in an instant by the way you respond to a crisis. Petraeus was one of the brightest, most accomplished, and trusted military leaders of our generation. His career was built on ethical and moral leadership, respect for his ability, and demonstrated success after success that fostered and reinforced his reputation as a trusted advisor. While his personal actions were less than wise and I am in no way defending them, those actions represented a relatively short period of time during his career. But the lack of transparency and the failure to deal with these actions appropriately not only ruined his career but also significantly damaged his personal brand. The impact on BP’s brand is starker. James O’Rourke sums it up well, “It will take some time for investors, employees, communities, business partners, regulators, and others to answer a fairly direct question for themselves: Do we trust this management team to deliver on the promises they have made?” As a CMO, this is an important lesson for you to learn. Living and demonstrating your brand values and attributes each and every day are critical to maintaining customer preference and loyalty.
- A strong action plan is essential to avoid a scramble. Could Petraeus have survived the crisis? We’ll never know since the news and social media activity took over and managed the message. If there was a crisis management plan in place at the CIA, it wasn’t evident and didn’t work effectively. And for BP, while the loss of life and impact on our environment from the oil spill were horrendous, what continues to have such a negative impact on its brand is the lack of transparency in the way BP responded to and handled the crisis. More transparency and empathy directed toward those affected would have undoubtedly been more effective.
- The plan needs to answer questions others might not ask. As a CMO, it is your responsibility to think through issues that could negatively impact your brand and, more importantly, respond to them quickly. But there also needs to be a clear line between responsiveness and resilience. What does “quickly” mean? Are you committed to being transparent? What messages are the most critical to deliver to the market overall? What messages need to go out immediately to your largest customers? What’s the sales talk track for prospects? What resources can be mobilized for action? What’s the time line for implementation? How would you implement the plan? Using what channels, what media? As a CMO, you are the one best equipped to provide leadership in this area, working to achieve strategy and planning alignment across the C-suite.
- Doing this correctly pays off, immediately and over time. Having a plan and then enacting the plan well can result in the difference between enhancing and diminishing your brand. As I discussed above, BP should have handled its response to the Gulf oil spill differently. The missteps and negative reaction started when the CEO of BP, Tony Hayward, wasted an early opportunity to enhance BP's brand perception by taking responsibility, showing empathy for those affected, and then committing to help the Gulf recover. Instead, he talked about wanting to have his life back, implying that his personal inconvenience was what mattered most. While this may have been unintentional, with the mouth working before the mind was engaged, the damage to the BP brand started and snowballed from that one event. Contrast this with a little-known but very effective crisis management plan than Lynn University put in place following the tragedy of losing students and faculty in the Haiti earthquake. While an unfathomable loss, the university community came together to grieve, celebrate the lives of those who were lost, and confirm that the university would stay true to its mission of being unusually devoted to preparing young persons for America’s and the world’s future. The university established the Global Citizenship Memorial Fund to honor the life and work of those who perished and has emerged stronger and more united than ever, securing the third 2012 presidential debate site.
How are you preparing to address potential brand crises in your organization? Are you ready? And most importantly, can you afford to not take this seriously?
I’m interested in your comments and feedback on these thoughts.