dca recognizing the cmos role in crisis

Recognizing the CMO's Role When It Comes

to Crisis How to Protect Your Brand

By Dean Crutchfield Associates

Dean Crutchfield Associates

Crises are particle accelerators for brands that reveal their fragility, as we've recently witnessed with bankrupt banks, tampered-with pizzas, poisoned pistachios, dodgy cookie dough and lethal drugs. While there are impressive tomes on crisis management, we still are littered with embarrassing reminders of the recurring gap between preparation and accomplishment. It's time to stop repeating the same mistakes when it comes to crisis management.

That's because CMOs are more in tune with consumers; they are using social-media tools to interact with them, and they can harness those tools in a time of crisis, turning those most loyal consumers into brand ambassadors. Here, then, are the four cardinal rules organizations must adhere to when protecting their brands – rules CMOs can and should help deploy through PR and marketing.

It’s what? It's time to recognize the CMO's role in negotiating crises. As social media has enabled consumers to more actively participate in brands, the CMO arguably now has an even greater role to play in activating customer support or other mechanisms necessary at a time of crisis.

Many claim it, but few deliver: Johnson & Johnson's $100 million rapid response to the storied contaminated Tylenol crisis in 1982 should have prepared J&J for the recent string of major problems from acetaminophen overdosing to faulty heart parts, so (what) did we learn? Failing to prepare is preparing to fail. Capt. Chesley Sullenberger's preparedness for the "Miracle on the Hudson" was a far cry from the sludge bank of stoic corporate puff supplied in the (delayed) response of US Airways CEO Doug Parker.

1. Expect the best; plan for the worst. When crisis strikes, news and social media burst and formal statements are rendered useless. Stocks don't have a memory-‐recall buZon, but the public do. The problem isn't resources; it's about managing the crisis with a can-‐do culture and strong values of trust.

The same rang true for Merck's smoking gun with Vioxx that demonstrated how much the company's leadership was in disarray. Merck communicated greater interest in maintaining their $2.5 billion brand than their vision "to preserve and improve human life." Their disdain for the facts resulted in them taking four weeks to withdraw Vioxx. Consumers may be forgiving, but a crisis can cost a brand's reputation in a single battering. Novartis now is reeling from inefficiency in its quality assurance; migraine sufferers count on Excedrin and the supply has been broken.

2. Decentralize decision-‐making. Crises are too quick for lengthy procedures; you can't be fearful and hide in bureaucracy. Mississippi Power's success in restoring power in 12 days in the a]ermath of Hurricane Katrina was the result of 20 "storm directors" with crystal-‐clear assignments and a phone directory of people who could get things done, something LIPA (Long Island Power Authority) clearly overlooked and ConEd lacked. As Katrina Storm Director Robert Powell said, "If you don't know what you're supposed to do, the manual is not going to help you now."

A similarly integrated, multiplatform response strategy resulted in favorable customer opinion to Nestlé's immediate action to withdraw its Toll House cookie-dough brand following a contamination several years ago, but that two way street disappeared with Nestlé's foolish foray into defending a bad policy over the fairness of its Palm supply chain. As that case demonstrated, the Fortune 100 favor Twitter (with caution) as a key communication tool, according to a study by Burson Marsteller.

Mattel had experienced 28 product recalls prior to its lead-paint scare in 2007. When that news broke, a team of 16 opened all lines of communication with 300 media channels, and its CEO, Robert Eckert, made 14 TV appearances and 20 calls to journalists in one day – a model for decentralized decision making.

As social media becomes ubiquitous and customers participate more, the role of the CMO is crucial in crisis as they're able to inculcate social media to empower customers to play a key role. Take some airlines, for example immediately posting updates on Twitter as a delayed planes landed or Jet Blue waiving cancellation fees during Hurricane Sandy illustrating the ability to handle the urgency of crisis communication.

Many claim it, but few deliver: Johnson & Johnson's $100 million rapid response to the storied contaminated Tylenol crisis in 1982 should have prepared J&J for the recent string of major problems from acetaminophen overdosing to faulty heart parts, so (what) did we learn? Failing to prepare is preparing to fail. Capt. Chesley Sullenberger's preparedness for the "Miracle on the Hudson" was a far cry from the sludge bank of stoic corporate puff supplied in the (delayed) response of US Airways CEO Doug Parker.

1. Expect the best; plan for the worst. When crisis strikes, news and social media burst and formal statements are rendered useless. Stocks don't have a memory-‐recall buZon, but the public do. The problem isn't resources; it's about managing the crisis with a can-‐do culture and strong values of trust.

3. Respond Boldly Marshalling a crisis team and a response plan are critical, including weighing the need for autonomy over the preferred unified leadership approach. Citigroup was the largest U.S. bank prior to the meltdown – it’s number 3 today and its fall from grace along Vikram Pandit was accelerated by Director Robert Rubin's "probabilistic" approach to decision-making that clearly misrepresented the severity of Citi's exposure to the crisis that broke the brand and the bank.

However, rest assured, when you need an ambitious, audacious and imaginative response, being forced on ineffective policies by some species of corporate bureaucrat creates a morass.

3. Respond Boldly During Katrina, with the cash economy broken, Mississippi Power's head of marketing helped instigate a bartering system: electricity for fuel supplies with Chevron, consequently supplying the Eastern United States and Gulf coast with fuel. Evidently, the more you want to achieve, the more you achieve as was the case during Sandy - many a proud hand lifted in tear jerking relief as fuel trucks from across the land rolled into NJ and NYC.

meager 20 minutes and then swiftly moved on to discuss their image and the hiring of a brand consultant! Bad news is good news to the prepared. When you need to be big, strong and fast and mobilize a massive, sweeping redistribution of information to the public, hide nothing and tell all – you don’t need a brand consultant to tell you that, just ask Chris Christie, New Jersey’s Governor.

4. Check, test, check, test. Brand integrity is compromised through fear. Studies show that companies that handled a catastrophe well have recovered and even exceeded pre-catastrophe stock price. In a crisis, fear is often the company's first reaction and it culminates in either a lack of compassion and/or stubborn refusal of the facts. Whether it’s stubbornness over the running of the NYC Marathon or “Don’t fiddle with things when Rome is burning” – for which LIPA are the new text book case; holding a ‘special’ 2 hour hurricane meeting, but only ‘talk’ about Sandy for a

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dca recognizing the cmos role in crisis

Business

faulty heart

chesley sullenbergers

storied media

social rapid

major problems

acetaminophen

recent string

rendered useless