Corporate Crisis Communication Spring 201 4

1. Corporate Crisis Communication Spring 2014 Georgetown University Faculty Judith Muhlberg & Bruce Harrison Class #1 As Presented to Class January 9, 2014 Georgetown University Corporate Crisis Communication

2. What we’re here to learn about Georgetown University Corporate Crisis Communication

3. Who are we? We’re two former CCOs in Fortune 500 companies, now counseling CCOs…and enjoying linking them to Georgetown students… • Judith Muhlberg, CCO, Boeing, Ford. On Board of Directors for State Farm. Now a Consultant to Fortune 500s • Bruce Harrison, VP, Freeport McMoran, Freeport Indonesia. CEO, EnviroComm (counseling firm) 25 years • Both working, both active in the Arthur W. Page Society, which focuses on CCO advancement Georgetown University Corporate Crisis Communication

4. What’s our POV • Our overall concept: We believe there are two powerful and collaborative forces ofleadership in large, global companies: • How leaders communicate • How communicators lead • Our book on leadership communication focuses on • The Chief Communication Officer (CCO): her or his purpose and performance in the C-suite, collaborating with other officers, leading toward Best Achievable Outcomes (BAO) in information flow, stakeholder perception, and high-performance culture. (Book available to you on website.) Georgetown University Corporate Crisis Communication

5. What’s OUR leadership strategy? • We believe ‘teaching’ is not about telling…we will work with you to make learning happen. • We will learn from you how to make it real and relevant, seeing you as a potential corporate thought leader. • From us, you will need to learn and earn: • The BAOs for grading in four assignments—which begin tonight! Georgetown University Corporate Crisis Communication

6. What we’re here with you to learn more about Georgetown University Corporate Crisis Communication

7. Know Your Interests Why Are You Here? Georgetown University Corporate Crisis Communication

8. If you’ve had a crisis situation, would you just give us the highlights? Georgetown University Corporate Crisis Communication

9. Our Website corporatecrisiscommunications2014.wordpress.com/2014/01/04/welcome/ Volunteers for Webmasters?  Georgetown University Corporate Crisis Communication

10. Crisis Situations How do you know it when you see it? Georgetown University Corporate Crisis Communication

11. Have you ever had a crisis situation? Here are some clues: • It stopped you in your tracks. • It changed what you were doing • It made other things less relevant • It was something you didn’t quickly understand • It was something you couldn’t quickly handle • It disrupted your routine and your plans • It put at risk the trust of your friends and other stakeholders • It was something you needed help with Georgetown University Corporate Crisis Communication

12. Q’s for you……in Calm and Crisis Situations • Why am I here? • What must I learn? • How do I add value? Georgetown University Corporate Crisis Communication

13. You as CCO: Constant QuestionsYou ask these in Calm or in Crisis • What? (What are the facts? What’s happening? What do we know? ) • So what? (What does this mean to us? What are the prospects now?) • Now what? (What’s our next move? What’s our Best Achievable Outcome?) Georgetown University Corporate Crisis Communication

14. Think with the end in mind Georgetown University Corporate Crisis Communication

15. What’s it all about…? • Is it a nuisance? • Is it a problem? • Is it a crisis? • How do we determine? “Marketplace assaults are different from pure crisis.”(Eric Dezenhall, in DAMAGE CONTROL) Georgetown University Corporate Crisis Communication

16. Cases: Precedents, Lessons Georgetown University Corporate Crisis Communication

17. Corporate Crisis: Basic Truths One undeniable truth: Crises are built into the fabric of business -- risks, variables, change • Some are—apparently—unavoidable • Others are rooted in creeping-crisis conditions • Some cast the corporation as villain • Others cast the corporation as victim • Some crises can shadow a company for years • Others can lift or transform the company Georgetown University Corporate Crisis Communication

18. Whatis the crisis impact on… • Our business? • Our stakeholders? • Customers, employees, investors et al • Our reputation? • Our culture? • Our vision, missions, strategies…our BAOs? • Our LEADERSHIP? Georgetown University Corporate Crisis Communication

19. Business Crisis Defined • Opinions and Perspectives From Various Sources • …a major occurrence with a potentially negative outcome affecting the company as well as its publics, products, services and good name (Kathleen Fearn-Banks, Crisis Communications) • …an opportunity to get your message out (Eric Dezenhall, Damage Control) • …a tipping point—the moment at which change’s momentum becomes unstoppable (Argenti, Barnes, Digital Strategies) • …something not to be wasted: “Never waste the opportunities offered by a good crisis”(Machiavelli, The Prince) • …a unique opportunity for transformative change (Bill George, Seven Lessons) • ...when you say, “You’re gonna need a bigger boat”(Dezenhall, quoting “Jaws” in Damage Control) Georgetown University Corporate Crisis Communication

20. Business Crisis Defined • Opinions and Perspectives From Various Sources • …an unstable time or state of affairs in which a decisive change is impending. (Steven Fink, Crisis Management) • …a non-routine event that creates uncertainty about the company’s long-range goals. (Robert Ulmer, Moving from Crisis to Opportunity) • …disclosure that threatens to shatter the firm’s hard-won franchise and reputation…and strike at the heart of the firm’s character and identity. (Charles Fombrun, Reputation) Georgetown University Corporate Crisis Communication

21. Recent Examples of … Georgetown University Corporate Crisis Communication

22. 2013 Corporate Crisis: “Goodbye” Aubrey McClendon, Chesapeake Energy • After a string of conflicts of interest came to light, including that fact that he was running a secret $200 million hedge fund that traded oil and gas, McClendon finally stepped down as CEO in January, 2013. He left with a reported $35 million exit package. Georgetown University Corporate Crisis Communication

23. 2013 Corporate Crisis, “Goodbye” Ron Johnson, J.C. Penney • Amid losses and a floundering stock price, J.C. Penney announced in April 2013 that it was replacing Johnson (hired from Apple) after just 17 months on the job. • Myron Ullman, who had been CEO before Johnson, returned to the post. Georgetown University Corporate Crisis Communication

24. 2013 Corporate Crisis, “Goodbye” • Zynga, maker of online games Farmville and Words With Friends, struggled to adapt to the shift from desktop to online gaming. • The company's shares plummeted from their IPO price of $10 to a low of $2.42. • In July 2013, founder Pincus quit the CEO job though he's staying on as chairman & chief product officer. Mark Pincus, Zynga Georgetown University Corporate Crisis Communication

25. Georgetown University Corporate Crisis Communication

26. Understanding a Corporate Crisis Georgetown University Corporate Crisis Communication

27. Exercise (15 Minutes):Is this a corporate crisis? • Your group reads story (handout), charts it on our ANATOMY OF CORPORATE CRISIS (handout). Keyword search: Justine Sacco • Discuss. Answer these 3 questions: • Is/was this a crisis for the company? • If it’s a crisis, where is it in our ‘anatomy’? • What’s your view of company action and communication ? Georgetown University Corporate Crisis Communication

28. CCO FIRED AFTER TWEET • IAC, an internet company, fired its senior corporate communications executive on Dec. 21 after she posted a racially tinged Twitter remark about AIDS and Africa. • The corporation owns the Daily Beast, About.com, CollegeHumor.com and Match.com. [Keyword search: Justine Sacco] • Crisis for the company? Did it disrupt business focus, shake up stakeholders, negatively impact company reputation…? Georgetown University Corporate Crisis Communication

29. Good Crisis Communicators Georgetown University Corporate Crisis Communication

30. Poor Crisis Communicators Georgetown University Corporate Crisis Communication

31. Content, Context, ToneEspecially in difficult times The CCO role in each aspect: CONTENT:The provider CONTEXT: The interpreter TONE: The connector Georgetown University Corporate Crisis Communication

32. Contexts Influence Your Communication How will others read what you send? The CCO must read the signs – the state of energy, the temperament and relevant flow of information among others, the reactions of stakeholders and critics, the announcement of status of competitors, politicians, on and on – that surround your information. Georgetown University Corporate Crisis Communication

33. The Assignments Georgetown University Corporate Crisis Communication

34. Graded Assignments • PIP: Due 3 times: 1/30, 2/27, 3/27 • BAO paper: Due 2/13 • 2 Crisis’paper: 4/10 • Final: 5/8 Georgetown University Corporate Crisis Communication

35. PIP Georgetown University Corporate Crisis Communication

36. Your PIP Assignment Due January 30 (and re-dos) Using electronic/print media sources, follow your assigned company for the next 90 days. Scan, log negative business crisis symptoms • Categorize and zero-in on a business target • Analyze: Results over (approximately) 30 days • Write: Use findings to forecast crisis trend line (Communication strategies are optional now; but you can use this in your final presentation) Georgetown University Corporate Crisis Communication

37. What are red flags or “prodromes”? • Steven Fink…any “prodromal “ (symptom of possible crisis) situation that runs the risk of: • Escalating in intensity • Falling under close media or government scrutiny • Interfering with the normal operations of business • Jeopardizing the company’s positive public image • Damaging the company’s bottom line Georgetown University Corporate Crisis Communication

38. The communicator’s protection, red-flag alert question How do I know when there is a conflict, nuisance, pre-crisis or breaking crisis? Georgetown University Corporate Crisis Communication

39. You are the connector, the stakeholder perception expert because you… Listen to your stakeholders! Georgetown University Corporate Crisis Communication

40. Business communication starts with a listening strategy Georgetown University Corporate Crisis Communication

41. Why you as CCO need to listen • Transparency rules: the company is naked, exposed, ‘Everyone Knows Everything’ • 24/7 information flow is a wild river • Companies can’t rely on (hide behind?) branding, marketing, advertising campaigns • Every stakeholder is one internet search away from anti-company information • Eyes are on you as CCO: counselor at the top, expert in perception, often considered in charge of reputation, first call when there’s a crisis Georgetown University Corporate Crisis Communication

42. Listening strategy…use the CCO question: What’s it all about? • What do our stakeholders think? • What are they saying? • What are they doing? • Who else are they hearing from? • What do they need to hear from us? • And…THEREFORE…how do we communicate? Georgetown University Corporate Crisis Communication

43. 1,2,3: Listen, Understand, Deliver • How do we engage (listen)? • What do we learn(understand)? • What (and how) do we communicate (deliver)? Georgetown University Corporate Crisis Communication

44. PIP step one: Build a listening station Georgetown University Corporate Crisis Communication

45. One way to build a “listening station” • Set up a G-mail account at www.gmail.com to allow you to access Google applications. • Go to www.google.com/reader -- this will become your first listening station. • Go to www.technorati.com – type your name, in quotes, into the search bar. • When the results page comes up, right-click the RSS but button. Georgetown University Corporate Crisis Communication

46. …build a ‘listening station’ (continued) • Select Copy-Link Location. • Go back to Google Reader, click the blue ‘plus’ (+) button, and paste what you copied. [Use right-click paste, or (Windows) Control-V; or (Mac) CMD-V.] • Repeat these steps for terms as you want to search…examples: • Industry: Pharmaceutical, Technology, Automotive, Financial, Food/Beverage • Company: ’ABC’company… • Product: ‘MightyHappy’… • Issues: automotive recalls…technology lawsuits • OR whatever relates to your company Georgetown University Corporate Crisis Communication

47. How to build a ‘listening station’ (continued) NOW: Plug into blogs, tweets, other conversations • Go to http://blogsearch.google.com and do the same searches. • Go to http://search.twitter.com and do same. • (And, new: Google Search Plus Your World) • YouTube • Gawker • Etc. • Etc. • Etc. Georgetown University Corporate Crisis Communication

48. Next steps: Research, Analysis • Organize • You can use Google Reader to build folders. • Analyze • First level might be two folders: • Our perspective (or Us) • Their perspective (or Them) • Second level might be: • Possible red flags • Report Georgetown University Corporate Crisis Communication

49. Outline to use in your PIP papers • Context: Describe the conditions surrounding your company (see slide #32 CONTEXT) • Prodromes: List3 or 4 ‘red flags’ (negative perceptions/risks to Best Achievable Outcomes) • Stakeholders: Identify those raising/affected by red flags • Analysis: Brief summary of what it’s all about • Citations: List sources (publications/sites),dates • AND IMPORTANT: THE QUALITY OF YOUR WRITING WILL SUSTAIN OR LOWER YOUR PAPER’S GRADE Georgetown University Corporate Crisis Communication

50. The End in Mind – SCORE on PIP! Georgetown University Corporate Crisis Communication