Review of XXXX’s contingency planning and responses

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 prompted by social and news media criticism of XXXX’s recycling of rejected clothing

Background

XXXX sent a two-year stockpile of rejected goods from a distribution centre to a recycling site in Johannesburg during the week 3-7 August 2015.  Someone photographed the containers with clothing and goods with XXXX labels attached and shared it on Facebook.  This sparked criticism on social media and in some news media.  The Managing Director (MD) issued a statement to staff and to the public.

After he was interviewed on radio, some callers voiced support and understanding for his view, others dismissed it and said it should be given to the poor or NGO’s that could channel it to them.

An internal team convened to prepare for the interview, to debrief on events and actions thus far.  A second media statement was issued where the MD undertook to review XXXX’s current recycling procedures for rejected stock and to meet with organisations who do relief work in needy communities.

An internal team and XXXX’s external social media agency met with the MD to debrief on events, to review both positive and negative aspects as well as learnings and, finally, to agree on action steps.

Positives:  What went RIGHT

1.     There was a quick response, the issue was not ignored.

2.     XXXX issued considered responses.

3.     There was a central communication coordinator.

4.     XXXX’s internal team and external service providers cooperated.

5.     The MD became involved and led.

6.     Unfolding events were tracked and monitored.

7.     The response team coordinated and cooperated.

8.     XXXX is reconsidering its operational procedures around reject stock, recycling and maximising potential public benefit.

9.     The matter has died down.

Negatives: What went WRONG:

1.     The MD received unprocessed information from too many sources.  This took up time to filter and assimilate.

2.     There is no structured response team for such events and no chairperson or team leader to coordinate.

3.     There are no information templates or checklists for such an event.

4.     After initial social media attention, things died down temporarily.  Instead of using the time to consider plans and responses, there was an internal lull until media pressure and criticism forced XXXX to respond.

5.     As proud XXXX employees, the response to the event was more an emotive brand response around dignity and respect, instead of a more factual response.

6.     The power and pace with which the issue unfolded on social media was underestimated

7.     Conventional and social media require different languages and styles.  XXXX responses were not differentiated accordingly.

8.     There was public criticism to XXXX’s action – rather than from customers –, but the criticism could make XXXX customers question their loyalty to the company.

9.     It is not clear how to establish a threshold/tipping point for concern and action.

10.  There is still no solution to the problem of the reject stock.

11.  Staff were responding on their private social media accounts.  Some of these responses, while driven by their loyalty to their employer, were more emotive than helpful and fragmented XXXX’s voice, adding to confusion.

12.  There was no immediate internal apology given.

13.  Some of the emotive arguments and criticism were met with an “intellectual” response.

14.  XXXX staff experienced the discomfort of sensing that somehow this recycling was “not right”.

15.  The criticism of XXXX could not be “limited” or “contained” on XXXX’s official communication channels.  It spread randomly to other social media platforms where XXXX’s response did not feature.

16.  The initial statement could have been delayed and it could have benefited from a reference to “the matter is under investigation”.

Reasons:  Why did some things go WRONG?

·       XXXX has limited experience of crises and disasters that resulted in a measure of naivety.

·       Communication functionaries had to execute a board decision without due consideration of communication impact, consequences and public responses.

The Apology spectrum

There is no doubt that, when the time and circumstances demand it, a company should issue a sincere and unqualified apology.  XXXX did not do so in this case.  Was it wrong?

An apology “spectrum” could look like this:

ß——————————————————————————————————–à

Insensitive      Scapegoat                   Apology                                              Grovel

Denial                                                 Sincerity                                              Overdone

Arrogance                                           Action                                                 Promises

XXXX could not apologise as no-one was intentionally or negligently wronged or harmed. No “culprit” who operated against company policy could be identified.  The recycling resulted from normal business procedures.

In its actions and statements XXXX did, however:

·       Display caring

·       Affirmed its values of dignity and respect as principles

·       Acknowledged poverty, inequality and criticism

·       Avoid arrogance

·       Announced an urgent review of its procedures.

ACTION POINTS

1.     Internal:

·       Staff are significant circles of influence, sources of information and brand ambassadors for XXXX amongst family and friends.

·       Tell staff first when something negative happens.  When they see it reported in the news and social media thereafter, it affirms the credibility of XXXX’s management.  If they read about a negative incident involving XXXX in the news and social media first before being told by their employer, management is on the back foot.

·       An internal apology – when needed – should be issued promptly.

·       Staff must be lauded for their loyalty to XXXX, but cautioned about speaking about XXXX and its actions on their private social media accounts.  However well intended, many XXXX voices, without a verified message or position sows confusion and make matters worse.

2.  Response team

Purpose

1.     To have a core team, as set out below who gain cumulative, collective experience in risk and reputation management, contingency planning and crisis management and can advise the MD.

2.     To collate and verify all relevant information, analyse the problem, offer action or solution options with risks to make an informed recommendation.

3.     To coordinate and integrate operational responses with the agreed communication strategy.

Composition

An internal response team is needed to deal with events such as this.  It should include:

·       An appropriate executive as team leader/chairperson (someone who knows the business, can integrate, coordinate, analyse with calm and balanced judgment)

·       Communication (how any communication will be received by target audiences, should be factored in at the source of decision-making, not after the fact)

·       Marketing (The website and other electronic platforms should reflect the communication strategy, consistent messages and tone)

·       The subject expert(s) dealing with the matter (they have core information and knowledge)

·       A legal expert (for any XXXX liability)

Information

1.     The response team should receive trustworthy information on what happened, when, where, how, why and what has been done.

2.     They need a reading on current news and social media coverage, requests and trends unfolding.

3.     They need to consider and formulate options for solutions or actions with risks, upsides and downsides.

Protocol

1.     The response team must have a contingency protocol.  This determines

who informs whom about what and when?

2.     Who speaks on what (internally and externally)

3.     In issues or crisis mode, a single spokesperson should be used for consistent messaging.

Review

1.     The Response Team should convene whenever a problem is brewing, otherwise quarterly to review events, responses, risks and learnings.

2.     The team should also monitor the industry to look at reputational risks, incidents and disasters suffered by competitors or related businesses.  This sensitizes XXXX to possible problems and helps to prepare for them.

Stakeholders

The response team should compile a list of key stakeholders who may be:

·       supporters, critics or partners in the quest of

·       maximising XXXX’s value to the community,

·       finding new ways of dealing with rejected stock and

·       who can up with an external perspective and possible solutions. 

·       It should engage those stakeholders on an ongoing basis.

·       Third party supporters or voices of reason are valuable allies in a crisis.

Social media

The social media debate could not be restricted to XXXX’s own sites.  The social media team need to present a social media analysis of the reject stock case study and

1.     Recommend a simple social media protocol with do’s and don’ts

2.     Suggest techniques, links, tags and other social media instruments to maximise XXXX’s voice and response and to present that to critics.

Threshold/ Tipping point

There was discussion about exactly what constitutes a problem, a serious problem and a crisis.  One possibility is to colour code stages – from green to amber to red.

Certain triggers or “nerve ends” were identified.  Singly or together these touch points could signal the degree of risk and priority of action.  They are:

1.     Staff – feeling angry, let down, compromised, unfairly treated (risk: leaks to media)

2.     Business or revenue impact (actual or possible losses)

3.     News and social media (negative reporting and growing public criticism can impact the business)

4.     Legal liability (risk of claims, lengthy litigation and adverse publicity)

5.     Crime, fraud, corruption (heightened public aversion to these)

6.     Any actions or statements that compromise XXXX’s brand values and position (erodes a priceless long term asset)

Observations, remarks by Pieter Cronjé

Given the lack of experience in handling issues and crises, by XXXX’s own admission and due to the nature of their business, the XXXX team responded well to unfolding and unpredictable social media criticism.

The XXXX team relied on their brand values, always a good and true compass, even if that default produced perhaps a more emotive, than factual response. The internal team met and coordinated responses, the MD led and was receptive to criticism and advice.  He gave a good, factual account of XXXX’s position in media interviews, gave clear answers and did not obfuscate.

A speedy public commitment to urgently review recycling procedures, maximise potential public benefit and to work with NGO partners and to acknowledge poverty and inequality, gave XXXX the moral high ground of a caring company.  That starves a critical campaign premised on perceptions and assumptions of random dumping with no regard for the needy.

XXXX’s willingness to debrief directly after the event, its commitment to set up company mechanisms to manage risk, contingency planning and crisis management, indicates the maturity of a learning company. 

Delivering on the agreed action points and taking staff along on the journey illustrates the possibility and need for positive steps to flow from from a negative experience.

*Recommendations to the MD

1.     Discuss the first action point about Staff and their role with staff at the appropriate forums.  Share the debriefing learning approach.

2.     Constitute the Response Team, give them their mandate.

3.     Ask for a report on their setting up process in one month.

4.     Review their functioning at quarterly intervals or when needed.

5.     Establish the principle that this overarching “corporate Response Team” does not absolve anyone from their line and job responsibilities.

6.     Consider incorporating other response teams in XXXX e.g. for strikes or labour unrest within the new body – given the resources, alignment, cumulative experience.

Extracts from an earlier, initial action plan

Purpose:  An operational checklist to assist with the composition, duties and functioning of the Response Team

“An early review revealed:

1.     Lack of precise information on the recycling process

2.     The emotive and simplistic nature of the debate around poverty, lost opportunity that drowned out XXXX’s reason and facts

3.     The need to interact with NGO’s and bodies with experience, expertise and capacity to help XXXX with practical plans to re-use/distribute reject goods safely, without risk to the end–user

4.     The need for an internal review of the whole reject process chain

5.     The need for a review on contingency planning, reputation management, internal and external communication.

A:  Internal action plan

1.     Legal

XXXX’s legal position, liability, ownership of rejected stock, exposure to substantive AND spurious claims from individual or collective litigants, insurance and third party cover, the legalities of channeling goods through intermediaries to end-users, contractual and procurement aspects.

2.     Procurement

Review procurement processes – conditions, incentives, disincentives, punitive clauses, reject mechanism, specifications, disclaimers, terms & conditions, element of social responsibility?

3.     Logistics

Quantities, selection, separation, location, frequency, labour intensity, bulk/volume/quantities, transport, recycling, re-working, re-purposing, partners, warehousing, transport, systems, costs

4.     Finance

Costing all the variables in the plan, individually and collectively, any effect on business model, bottom line, return on investment/objective/effort (ROI, ROO, ROE), funding CSI capacity in partner service providers, reducing CSI budget accordingly, measuring net gain, sustainability, and viability.

5.     CSI

Review current model, focus areas, beneficiaries, shifting operational budget, managing consequences/fall-out, any win-win solutions?

6.     BBBEE, ISO, King, other measures

Impact of any new model for reject process on governance/certification/legal requirements, any positive impacts, especially BBBEE, marketing and communication positives?

7.     Integration, risk management

Integrating process into normal business processes, avoiding silo planning and action, identifying risk, probability, impact, mitigation, action, response

8.     Communication, Marketing

Monitoring and analysis of news and social media, staff, customer and stakeholders responses, keeping staff informed, supportive, communication with stakeholders, responses, news angles, visual elements, contingency planning, reputation, crisis management, messaging, positioning, environmental scanning.

9.     XXXX Staff

Using this case study and experience, start internal review learning process on and after significant events and developments. What went right? What went wrong?  Why? What can we learn from this?  How could we improve our business in future?

B.  External action plan

1.     Potential partners, service providers

Starting with Clothing Bank discuss opportunities, constraints, risks, pitfalls, networks and partners. Meet with both general and niche NGO’s, organisations.  Devise possible solutions and workable plans.  Unlock existing strategic alliances with CSI partners, service providers, and suppliers. Develop value chains.

2.     Industry

Work with industry partners, relevant associations, expert bodies on case studies, opportunities, joint initiatives or ventures

3.     Recycling

Check on technology options, future development, service providers, partners, industry bodies – use expert advisor? Verify responsible, accountable process

4.     Stakeholders

Keep key stakeholders informed with spaced, brief updates.  Enlist their help, networks, suggestions?

5.  Staff

Keep staff informed of real gains and create a sense of pride, ownership

6.     Social media/News media

Inform, post, issue concrete news, progress.  Guideline: under promise, over deliver, find third party testimonials for credibility, use visuals.

C.  XXXX Team

·       Project team: composition, leader, sponsor

·       Inputs, outputs, outcomes

·       Scope

·       Mandate

·       Timeframes

·       Budget

·       Monitoring, reports, intervention

·       Success criteria

·       Alignment, integration, coordination.”

ANNEXURE D

 Media survival kit ©

Mindset

  •   You are the expert – It’s part of your job, not a burden
  •   An interview enables you talk to thousands, even millions. How long will this take you otherwise?
  •   You are shaping the image of your organization

DO’s

  •   Respond quickly, be available
  •   Know your facts and stick to them
  •   Use clear and simple language
  •   Stick to your area of responsibility and expertise
  •   Be courteous, professional.  Do NOT get angry.
  •   Clarify the deadline, angle of the story
  •   Keep commitments, meet deadlines
  •   Offer to review a draft, but the journalist is not obliged to supply it
  •   Correct factual errors only if the draft is sent to you – not the tone or style
  •   If the topic is controversial or technical, respond by e-mail
  •   Apologies, sincerity are in order
  •   In a crisis, stick to one spokesperson – tell the truth, tell it all, tell it fast
  •  

   Do NOT

  •   attack “the media”, “journalists”, or this journalist
  •   guess or speculate
  •   give “off the record” comment
  •   panic
  •   complicate
  •   threaten
  •   be arrogant

   Radio, Television

  •  What is the topic? Who is the audience?
  •   When? Where? How long?
  •  Is it live or recorded?
  •   Which programme? Who is the presenter/host?
  •  Who else is participating?
  •   Is this a telephonic or studio interview?
  •   Is this a phone-in, are you opening lines?
  •   What is the angle of the programme?
  •   Get all contact details – studio, producer
  •   Accept short deadlines, notice
  •   Learn the art of the “sound byte”  (telling your story in a short elevator ride)
  •   Avoid technical jargon and buzzwords.  Keep it short and simple
  •   Stay calm, focus, stay on message
  •   Stay informed, be available
  •   Answer the direct question first, then elaborate if necessary
  •   Talk to the presenter, not the listeners (except in a relaxed interview)

© Pieter Cronjé – 082 465 4965.  pieter@pietercronje.com