No matter how many preventative measures are taken, things go wrong in every company at some point. How your company responds in a crisis has a direct bearing on how quickly it will recover consumer confidence and sales.
A couple of posts back I listed the steps to follow when the yoghurt hits the fan. Here is a little more about each of the steps.
1) Investigate immediately
Hopefully you will have cultivated an environment in which employees at all levels are motivated to alert supervisors to problems as soon as they arise.
As soon as the whistle blows, assess the magnitude and specific nature of the problem. Try to determine why the problem has occurred/is occurring, and who is/what departments are responsible so that you can determine the most appropriate remedial action. You need to think “stop the problem, contain the damage and start making things right”. This is not the time to assess blame or point fingers in any way shape or form.
If the problem is a serious one, or has the potential to have a significant impact on the company, ensure that senior execs are alerted immediately. They need to be involved in “next steps”.
2) Activate your response plan according to what has happened (if you don’t have one, read the previous post)
If you did a good job of anticipating what could go wrong, your current problem is likely listed in the Problem Resolution Binder, along with a recommended course of action. Follow the plan… but be flexible enough to make adjustments based on the actual set of circumstances.
There should be contact numbers for key decision makers and department heads in the book. Even when the course to follow is well laid out, make sure seasoned, senior employees are involved in the implementation of "next steps" to ensure that they are indeed the correct ones for the specific problem at hand.
Although you need to respond immediately, do not confuse responding with reacting. Take the time to assess the ramifications of your solution steps before proceeding – those extra minutes of reflection, or extra calculations and discussions, can make the difference between an effective resolution and an escalation of the problem.
3) Be – and be seen to be – sympathetic and pro-active
Nothing annoys customers and average consumers more than corporate executives who appear indifferent to a problem and how it is affecting customers, employees and other stakeholders.
According to research we conducted from March - June 2010, 55% of the general adult population in North America appears to be angered by executives who treat a crisis simply as a problem to be solved, without being cognizant of, or sympathetic to, the personal toll exacted by whatever has transpired. For customers, the figure rises to 87%. The figures were consistent for all types of problems ranging from corporate missteps to more serious problems that resulted in loss of life, across all types of industries.
Of more significance to the bottom line, nearly 40% of people said they would be less likely, or far less likely, to do business in future with companies whose executives appear indifferent to employees and public opinion, especially in times of crisis.
Even though they understand that things go wrong at some point in every company, respondents explained that the way a company responds in times of trouble is a reflection of its ethics and customer service values. As one business buyer put it, “If they can’t be compassionate and caring in times of trouble, I can only imagine how my business is valued and how my people would be treated during the good time. I suspect it would not be with respect.”
Maple Leaf Foods retained its credibility along with the confidence and goodwill of the Canadian consumer when it faced the listeria outbreak in 2008 because it pro actively let people know what was going on and publicly expressed concern for the families involved and its own employees, too.
From long before the time of the Tylenol package tampering though to the BP oil well disaster, there are clear examples that show a correlation between how compassionate and concerned executives appear in the face of a crisis and how future sales have fared.
The message: Be – and be seen to be – sympathetic to the challenges faced by the people affected by the problem at hand.
4) Get the press and social media on your side
Have your media rep let the press know what has happened as soon as possible – and keep them informed about the steps you are taking to resolve matters.
Do not try to cover anything up. Tell them “the good, the bad and the ugly”. The more transparent you are, the more credible you will appear – and the less likely you are to be crucified in the press.
Make sure you keep your employees up to speed on what is happening, too. This is a good time to make use of internal newsletters, discussion boards and other communication forums. If your company employs union members, you will need to keep their reps up-to-date, too.
Don’t forget about social networking sites either. If you don’t already have a social media manager, now would be a good time to bring one in on contract to work with your PR people to monitor and shape the cyber-chat.
Make sure you add a section to your company’s homepage that lets people click though to learn more about the problem and what you are doing to solve it. The addition of video messages from the CEO can be helpful in some cases – and puts a personal face on the solution, which is important for many consumer segments.
5) Apologize as appropriate; be sorry for what happened, even if it’s not your fault.
Don’t think there’s much that needs to be said here, except “Be sincere.”
6) Do not deny culpability at the outset when it is not your fault; get a 3rd party to exonerate you.
According to consumer research expert J. Armstrong, “30% - 55% of North Americans aged 18 – 65 would be less likely to do business with a company in the future if the company’s first response to a problem is denial of culpability.”
Even if the problem is not one your company caused, your response should be something along the lines of, “We are truly sorry that this has occurred and we are doing everything we can to determine exactly what happened and how to make it right.”
With this kind of a response, you appear responsive and caring, yet have neither accepted nor denied responsibility for what transpired. In essence, you have bought your company the time it needs to investigate.
When it turns out that the problem was created by another entity, let the press report this. Disseminate reports from the police, trade associations, government agencies or whoever is appropriate for the situation ,using social media and traditional PR channels.
Add the information to the front page of your website in the same spot where you have been keeping consumers informed about the problem resolution progress.
7) Go the extra yard to make things right… be perceived to be doing the “right thing”
Avoid getting into long, drawn-out lawsuits. Settle up fairly and quickly – and do whatever it takes to make it right. In the long run it will cost you less money, use less time and will help your reputation from being tarnished.
8) Use the ‘incident’ to make improvements, and even become an industry leader in some areas – but do not use this as a PR tool!
Maple Leaf used the knowledge it gained during its eradication of listeria from its plants to improve food handling safety procedures and now willingly shares this intelligence with others in similar industries.
Johnson & Johnson used the Tylenol tamperings as the catalyst for the introduction of tamperproof packaging.
Hotels regularly use “service incidents” as teaching tools and opportunities to put new processes in place – some of which are shared between properties and chains.
As important as it is for the next steps in problem resolution to be future avoidance of similar situations, it is even more important that you not use this to pat yourself on the back. The likelihood of public backlash is huge because most consumers will believe that the processes should already have been in place to have prevented the problem from occurring in the first place.
I hope you found this information useful, but more so, I hope you never have to put any of these suggestions into play.
If you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until next time, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michèle Clark
Thursday, July 29, 2010
Thursday, July 22, 2010
4 Simple Steps for Preventing Problems – Planning for the “Unexpected”
Hi. I promised last time that I would fill in some of the details on the process to follow when the yoghurt hits the fan. I will do that the next, but realized that it makes more sense to first talk about you should be doing long before things go off the rails.
1) Ensure that your company has processes in place for all regularly-performed jobs…
and that people are trained in the right way to do things. There must also be checks and balances in place to ensure that the correct process is followed... and there need to be consequences for not following the established routines or employees tend to get lazy and develop their own short cuts.
This may sound obvious, but it’s surprising just how many companies fall short in this area.
Most manufacturing and processing companies, especially those dealing with food and hazardous material, are pretty vigilant, but other types of companies are often too lax. Or think that there is no real need.
Even in a marketing communications company we need to have processes. For instance…
• A contact report must be written for every client contact made. That way nothing gets forgotten, agency and client are clear about any changes in direction given, etc.
• Recruiting specs for any type of research must be vetted against the research objectives and by the people who will be using the research findings – and signed off on by the client. You also need to double-check the profiles of the people recruited prior to starting the work to make sure that your specs were followed accurately.
• You never go to press without getting client sign-off on a “size as” printer’s proof.
• You must always include seed names in your mail files of people living in the target area – and these names must be given to the data processing firm for insertion, not to the lettershop company.
• etc.
Seemingly little things, but I’ve learned that things only go wrong “the one time” we don’t follow a set procedure.
We conducted research with +100 other firms in multiple industries to confirm what we suspected – that no company can operate without established ways of doing things. We spoke with all kinds of companies from bakeries to hairdressing salons to automotive repair shops to data processing firms to research labs to architect firms to convenience stores to... well, let’s just say there was a good cross-section of companies.
Before the investigation we asked a panel of business students which of the targetted firms needed to have processes (other than financial) in place to success. They believed that less than half of the firms needed to be process-driven. They were wrong.
Here’s what we found. Companies fell into one of two categories: 1) Process-oriented companies that function relatively smoothly and 2) Ones that fly by the seat of their pants and spend as much time putting out fires as they do performing revenue generating tasks.
The ones with processes in place
Each and every company that fell into this category – without exception – echoed the sentiment expressed by this one entrepreneur from a consulting firm:
“We have rules for how things should be done. Whenever we take a shortcut and skip a step, that laziness usually comes back to bite us in the butt.”
A caterer said: “Whenever we deviate from our established processes, it’s only dumb luck that keeps the wheel from coming off the bus.”
In many cases, the establishing of set procedures followed a series of small setbacks – or was implemented after a really major screw-up that threatened the very survival of the business.
Interestingly, each of these firms was profitable – and reported increases in both revenue and profitability of anywhere from 10% to 30% in the first year in which process were introduced and actually followed.
The ones without set procedures
Each of the companies that operated without established practices for everyday tasks had the following in common:
• They spent anywhere from 25% – 50% of their work week solving problems - most of which were a result of employee error.
• Their profitability was lower than the average for similar-sized firms in their industry – sometimes as much as 60% lower.
• The business did not have a written business plan and was growing like an unpruned bush – out in every direction but up.
2) Create contingency plans
Gather people from all areas of the company. Ask them to think about all the things that could possibly go wrong in their work day. Encourage employees to submit ideas for solving the identified problems as well as for improving safety and productivity in their work area.
From this input, create a written game plan of the process to follow when the yoghurt starts dripping on the proverbial fan.
Make sure that there are at least two copies of this binder – and if the operation is a large one, that there are a couple of copies in each key functional area of the company. Employees should all know about the binder and be taught that when things go wrong they need to...
• Call 911 (in cases of physical injury, fire, etc.)
• Alert their supervisor
• Get the binder and follow the recommended steps as appropriate
3) Cultivate a Culture of Trust and Open Communication
This is just good business practice – but can prove invaluable in times of company crisis.
If there is already good dialogue between senior executives and the rank and file, it makes it easier to communicate with employees if there is a serious problem.
When Maple Leaf Foods experienced its listeria outbreak, CEO and President Michael H. McCain was able to inform his employees about the steps being taken through an internal communication tool. Prior to the incident he updated employees weekly through a personal e-mail message. Employees had come to know and trust him and, as a result, were reassured by the postings during the crisis.
More importantly, in this kind of environment employees will be quick to alert colleague and/or supervisors to potential problems, rather than covering things up because of fear of reprisal.
4) Court the Press
Companies that maintain cordial relations with members of the press are more apt to be portrayed in a more sympathetic light when things go wrong – provided they do the right things to address the problem, of course.
And as for the details on the process to follow (see below), I really will fill in the details with my next post. In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until then, remember to have fun and be prepared to "go out on a limb because that is where the fruit is."
Jane-Michele Clark
1) Ensure that your company has processes in place for all regularly-performed jobs…
and that people are trained in the right way to do things. There must also be checks and balances in place to ensure that the correct process is followed... and there need to be consequences for not following the established routines or employees tend to get lazy and develop their own short cuts.
This may sound obvious, but it’s surprising just how many companies fall short in this area.
Most manufacturing and processing companies, especially those dealing with food and hazardous material, are pretty vigilant, but other types of companies are often too lax. Or think that there is no real need.
Even in a marketing communications company we need to have processes. For instance…
• A contact report must be written for every client contact made. That way nothing gets forgotten, agency and client are clear about any changes in direction given, etc.
• Recruiting specs for any type of research must be vetted against the research objectives and by the people who will be using the research findings – and signed off on by the client. You also need to double-check the profiles of the people recruited prior to starting the work to make sure that your specs were followed accurately.
• You never go to press without getting client sign-off on a “size as” printer’s proof.
• You must always include seed names in your mail files of people living in the target area – and these names must be given to the data processing firm for insertion, not to the lettershop company.
• etc.
Seemingly little things, but I’ve learned that things only go wrong “the one time” we don’t follow a set procedure.
We conducted research with +100 other firms in multiple industries to confirm what we suspected – that no company can operate without established ways of doing things. We spoke with all kinds of companies from bakeries to hairdressing salons to automotive repair shops to data processing firms to research labs to architect firms to convenience stores to... well, let’s just say there was a good cross-section of companies.
Before the investigation we asked a panel of business students which of the targetted firms needed to have processes (other than financial) in place to success. They believed that less than half of the firms needed to be process-driven. They were wrong.
Here’s what we found. Companies fell into one of two categories: 1) Process-oriented companies that function relatively smoothly and 2) Ones that fly by the seat of their pants and spend as much time putting out fires as they do performing revenue generating tasks.
The ones with processes in place
Each and every company that fell into this category – without exception – echoed the sentiment expressed by this one entrepreneur from a consulting firm:
“We have rules for how things should be done. Whenever we take a shortcut and skip a step, that laziness usually comes back to bite us in the butt.”
A caterer said: “Whenever we deviate from our established processes, it’s only dumb luck that keeps the wheel from coming off the bus.”
In many cases, the establishing of set procedures followed a series of small setbacks – or was implemented after a really major screw-up that threatened the very survival of the business.
Interestingly, each of these firms was profitable – and reported increases in both revenue and profitability of anywhere from 10% to 30% in the first year in which process were introduced and actually followed.
The ones without set procedures
Each of the companies that operated without established practices for everyday tasks had the following in common:
• They spent anywhere from 25% – 50% of their work week solving problems - most of which were a result of employee error.
• Their profitability was lower than the average for similar-sized firms in their industry – sometimes as much as 60% lower.
• The business did not have a written business plan and was growing like an unpruned bush – out in every direction but up.
2) Create contingency plans
Gather people from all areas of the company. Ask them to think about all the things that could possibly go wrong in their work day. Encourage employees to submit ideas for solving the identified problems as well as for improving safety and productivity in their work area.
From this input, create a written game plan of the process to follow when the yoghurt starts dripping on the proverbial fan.
Make sure that there are at least two copies of this binder – and if the operation is a large one, that there are a couple of copies in each key functional area of the company. Employees should all know about the binder and be taught that when things go wrong they need to...
• Call 911 (in cases of physical injury, fire, etc.)
• Alert their supervisor
• Get the binder and follow the recommended steps as appropriate
3) Cultivate a Culture of Trust and Open Communication
This is just good business practice – but can prove invaluable in times of company crisis.
If there is already good dialogue between senior executives and the rank and file, it makes it easier to communicate with employees if there is a serious problem.
When Maple Leaf Foods experienced its listeria outbreak, CEO and President Michael H. McCain was able to inform his employees about the steps being taken through an internal communication tool. Prior to the incident he updated employees weekly through a personal e-mail message. Employees had come to know and trust him and, as a result, were reassured by the postings during the crisis.
More importantly, in this kind of environment employees will be quick to alert colleague and/or supervisors to potential problems, rather than covering things up because of fear of reprisal.
4) Court the Press
Companies that maintain cordial relations with members of the press are more apt to be portrayed in a more sympathetic light when things go wrong – provided they do the right things to address the problem, of course.
And as for the details on the process to follow (see below), I really will fill in the details with my next post. In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until then, remember to have fun and be prepared to "go out on a limb because that is where the fruit is."
Jane-Michele Clark
Monday, July 12, 2010
If you mess up, ‘fess up
When things go off the rails (and face it, they often do in business), I believe in telling the truth...and taking accountability. When I said this once, someone added (more than half seriously), “or as much as you can without jeopardizing your relationship with the client”. Not a good idea.
My advice: Always tells the truth – especially to your clients. In my experience, if you’ve been doing a good job, then you will never get into trouble by saying, “We made a mistake. These are the ramifications and this is what we are going to do to make it right.”
This includes accepting responsibility for an error made by any member of your team – from a more junior employee to a third party “supplier/ subcontractor/ vendor” (I avoid all these terms as I find that by treating people as members of the same team, that the working relationships are better and the work more effective, but that is grist for another article mill). After all, you hired them. The client doesn’t care whose fault it is; they just want it to be fixed, and fixed properly. Now.
This will include paying whatever charges are necessary to make it right. It is important to let the client know what is being done to solve the problem, and to keep them informed along the way. Once you’ve explained how you will correct matters, it’s important to ask, “Is there anything else you would like us to do to make this right?” I have yet to have a client come back and add anything unreasonable to the mix. More often than not they have offered to contribute financially to the solution, or have suggested ways in which we can correct the problem more quickly and/or less expensively.
The only exception: When your client is partly to blame, you need to have a heart-to-heart with them and figure out an appropriate way to share related costs from the get-go.
Once the matter has been resolved, apologize one last time and move on. Do NOT bring it up again in the hopes of getting kudos for how you handled the problem. After all, you or your team made the mess; it’s only right that you were the one to sort it out.
The same advice holds true when you are the one who had screwed up at work. Own up to it, apologize and fix the problem and manage the fallout.
I was once asked if there is a process to follow when the yoghurt hits the fan. There is. The fleshed out version of this will be the subject of another blog, but here are the bare bone basics:
• Investigate immediately.
• Activate your response plan according to what has happened (and yes, this means you must have one!).
• Be – and be seen to be – sympathetic and pro-active.
• Get the press and social media on your side.
• Apologize as appropriate; be sorry for what happened, even if it’s not your fault.
• Do not deny culpability at the outset when it is not your fault; get a 3rd party to exonerate you.
• Go the extra yard to make things right… be perceived to be doing the “right thing”.
• Use the ‘incident’ to make improvements, and even become an industry leader in some areas – but do not use this as a PR tool!
I’ll fill in the details with my next post. In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until then, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michele Clark
My advice: Always tells the truth – especially to your clients. In my experience, if you’ve been doing a good job, then you will never get into trouble by saying, “We made a mistake. These are the ramifications and this is what we are going to do to make it right.”
This includes accepting responsibility for an error made by any member of your team – from a more junior employee to a third party “supplier/ subcontractor/ vendor” (I avoid all these terms as I find that by treating people as members of the same team, that the working relationships are better and the work more effective, but that is grist for another article mill). After all, you hired them. The client doesn’t care whose fault it is; they just want it to be fixed, and fixed properly. Now.
This will include paying whatever charges are necessary to make it right. It is important to let the client know what is being done to solve the problem, and to keep them informed along the way. Once you’ve explained how you will correct matters, it’s important to ask, “Is there anything else you would like us to do to make this right?” I have yet to have a client come back and add anything unreasonable to the mix. More often than not they have offered to contribute financially to the solution, or have suggested ways in which we can correct the problem more quickly and/or less expensively.
The only exception: When your client is partly to blame, you need to have a heart-to-heart with them and figure out an appropriate way to share related costs from the get-go.
Once the matter has been resolved, apologize one last time and move on. Do NOT bring it up again in the hopes of getting kudos for how you handled the problem. After all, you or your team made the mess; it’s only right that you were the one to sort it out.
The same advice holds true when you are the one who had screwed up at work. Own up to it, apologize and fix the problem and manage the fallout.
I was once asked if there is a process to follow when the yoghurt hits the fan. There is. The fleshed out version of this will be the subject of another blog, but here are the bare bone basics:
• Investigate immediately.
• Activate your response plan according to what has happened (and yes, this means you must have one!).
• Be – and be seen to be – sympathetic and pro-active.
• Get the press and social media on your side.
• Apologize as appropriate; be sorry for what happened, even if it’s not your fault.
• Do not deny culpability at the outset when it is not your fault; get a 3rd party to exonerate you.
• Go the extra yard to make things right… be perceived to be doing the “right thing”.
• Use the ‘incident’ to make improvements, and even become an industry leader in some areas – but do not use this as a PR tool!
I’ll fill in the details with my next post. In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until then, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michele Clark
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