See You In Court

"Never trust the British", tweeted American journalist, Kevin Roose, following the war of words and legal threats that has erupted battle between two of the biggest figures in the technology world.

Meg Whitman, American former boss of eBay and now CEO of computer hardware giant, Hewlett Packard (HP), whose share price has halved this year as it struggles to respond to smartphones and tablets.

Mike Lynch, founder and former CEO of acclaimed British software company, Autonomy plc, who stands accused of "a wilful effort" to cook the books to facilitate its $11bn sale last year to HP.

PwC has been called in to investigate; the matter has been referred to UK and US regulatory authorities. So who's message is winning out in the media?

That might depend on whether you are following the American or British media. In the UK, the BBC, FT, Sunday Times and even The Guardian have sympathised with Lynch who flatly denied the allegations. They observe that this year, HP has written down $19bn of the $26bn it has spent buying EDS, Palm, Compaq and Autonomy; fraud couldn't account for writing down Autonomy by $8.8bn; or such a huge figure remain undetected during an exhaustive due diligence process by bankers and auditors before the sale.

American media pointed out that analysts and Oracle's boss, Larry Ellison, had questioned Autonomy's accounting practices and honesty in the past. The Wall Street Journal committed a front page to detailing some of Autonomy's alleged scams. The New York Times highlighted how Lynch worked his engineers "remorselessly hard" and "wouldn't work with anyone" at HP.

Lynch released to the press a letter he wrote to HP's board demanding "immediate explanations" for its "highly damaging allegations" and challenged it to detail them. HP rebuffed him, stating that it looked forward to hearing Lynch "answer questions under penalty of perjury" in court. Ouch.

Why have both sides indulged in such a public PR battle? For Whitman, under investor pressure, she gets to blame her predecessor, take credit for confronting an issue head-on and create time for a new strategy as the investigations and any legal processes drag on.

Lynch, instead of hiding behind lawyers, has muddied the waters and established a narrative about HP while the allegations are so sketchy. With HP's shares at a decade low, a history of overvauing its acquisitions, a succession of failed strategies and a new CEO who praised her predecessor's Autonomy deal, it is easy to argue that HP is the author of its own misfortune and attempting to distract attention from it.

If Whitman is right, Lynch's reputation is toast and he's in jail. If she cannot prove a huge, deliberate fraud, she is out of a job. No wonder it's got so dirty so quick.

Andrew Caesar-Gordon

How KitchenAid Spun A Twitter Crisis Into A PR Coup

I think this article from Jonathan Rick, president of the Jonathan Rick Group - a digital communications firm in Washington DC - is worth reprinting to show how to manage a social media crisis when an employee gaffes from your corporate account.

 

KitchenAid's apology for an offensive tweet about President Obama's deceased grandmother amounts to a case study in digital damage control.

Everyone makes mistakes. It's whether you learn from them that separates the brands that retain your loyalty from the ones you now drive by.

In this context, consider last night's tweet from KitchenAid during the presidential debate:
”Obamas gma even knew it was going 2 b bad! ‘She died 3 days b4 he came president'. #nbcpolitics”
Sent from your personal account, where your like-minded friends make up the primary audience, the offending tweet may have slipped by relatively unnoticed. However, sent from a corporate channel, the tweet is no longer associated with a person but with a brand and its products.
Confronted with this crisis, the kitchen appliance-maker sprung into action, combining several smart ingredients into a response that was swift, serious, and sustained. As a result, the damage to its brand will be minimal. Indeed, the company's apology amounts to a case study in digital damage control.

Roll the Tape

Let's review the timeline. During the debate, 19 abbreviated and incendiary words flew forth from @KitchenAidUSA to 24,000 followers.

First, KitchenAid deleted the tweet--there's no sense in leaving your garbage out in front of your restaurant. Check.

Second, the company issued its “deepest apologies” for a tweet it termed “irresponsible.” It put out this apology, wisely, on the same medium--Twitter--where the transgression took place, and did so immediately and with a hashtag. Check, check, check.

Third, when Mashable reported on the incident, KitchenAid delivered a statement that the website appended to its story. Importantly, the statement didn't come from a PR person but from Cynthia Soledad, the marketer in charge of KitchenAid's Twitter channel.

Soledad reiterated the company's contrition, and made it specific (we are “deeply sorry to President, his family, and the Twitter community”). She condemned the tweet as “tasteless,” and again took full responsibility (“I take responsibility for the whole team”). And she implemented corrective action, promising that the jokester “won't be tweeting for us anymore.”

Finally, when the follow-up tweets came pouring in, KitchenAid didn't collapse into a crouch, but offered to talk on the record. Case closed.

A word to the wise

It's obvious that this was a mistake, a personal opinion accidentally broadcast on a company account. Indeed, Twitter has made these blunders an occupational hazard. Fortunately, many customers can imagine themselves committing the same screwup, and so are more forgiving than offended.
On the other hand, given Twitter's popularity and ease of use, this won't be the last time a brand has to eat bird. So what can your company do to avoid such a snafu?

One solution: Implement a review process for tweets. Yes, in a news cycle dominated by 140 characters and driven by Politico-type mini-scoops, seconds matter. But do they matter more than your job?

Alternatively, consider removing your personal account from your work computer. This goes double when live tweeting, as was the case last night, when it's so easy to get caught up in the moment and lose focus.

At the least, use one web browser or app for business and another for pleasure. Forewarned is forearmed.

Or, to employ another aphorism, to err is human. But to course-correct--to blend a crisis into a coup--is to be a PR pro of the highest order.

Poor People @ #WaitroseReasons

If you have time for some amusement, another example today of a PR department getting it wrong on Twitter:

http://www.dailymail.co.uk/news/article-2205975/Waitrose-Twitter-backlash-I-shop-Waitrose--I-dont-like-surrounded-poor-people.html


Andrew Caesar-Gordon

Atos On The Hop

For your message to play out successfully, you want to be able to focus attention on it. Until a few weeks ago, few in the UK would have heard of global IT firm, Atos. No matter. Through its Olympic sponsorship, it would garner headlines about its technological prowess and project management capabilities. Instead, in the words of Mark Borkowski “if people were not aware of Atos, they certainly are now. It is a brand under terrible pressure”.

They got media coverage alright but it wasn’t good and surely it devalued their sponsorship. And yes, this does matter for B2B organisations (for why, see my earlier blog entry of 10th April 2012 about Goldman Sachs).

Atos has a government contract to assess disability benefit claimants’ capacity to work. There have been a very high percentage of successful appeals against its assessments. The Guardian and a Labour MP have campaigned on the issue for months and a Commons Select Committee had lambasted Atos’ handling of the process.

So presumably it was not a surprise to Atos that disability campaigners would juxtapose this with its sponsorship of the Paralympics - and it would gain media traction at this time.

The week the Olympics opened, both Panorama and Dispatches ran undercover investigations that criticised Atos’ assessment process. But no Atos spokesperson. Just excerpts from a statement which could not adequately challenge the journalists’ multiple accusations. When national media covered a disabled protest outside Atos’ London offices, no spokesperson.

Print and online had to make do with quoting an anonymous ‘Atos spokesperson’. Really? When responding to emotional stories about the distress to disabled people caused by your assessments? And no mention or rebuttal on Atos’ websites or Twitter feed of any of this. Although I did find campaigners tweeting that ParalympicGB athletes had hidden the Atos branding on their passes.

And when the media is on to you, they’ll run with anything that supports the narrative about you. Therefore last month a "mistaken comment" in an Atos letter to a claimant with depression justified a BBC Online story repeating of the criticisms of the company. Labour MP Tom Greatrex’s inquiries caused the National Audit Office to criticise Atos’ performance and he secured a debate in the House of Commons that would have been less likely but for the timing connection of the Paralympics which had created the media buzz.

Atos’ statements appeared devoid of emotionally compelling messages for an audience to empathise with: “we meet our obligations in delivering a complex and challenging contract”; “we offer our customers good value for money alongside high standards of service, delivery and flexibility”.

And when others were asked about Atos, they grasped the opportunity to push their own key messages. The British Paralympic Association: "our role is to concentrate on promoting British Paralympians as positive role models rather than to comment on wider, non-sport related disability issues".

Craig Spence, communications director for the International Paralympics Committee, commented that: “I think the majority of people watching will be marvelling at the fantastic performances of our elite athletes as opposed to a small minority who will be protesting”.

No doubt Atos had internal reasons for not engaging on the issue – maybe they feared upsetting their government client. But the public and most politicians care more about fairness than they do about Atos sponsoring the games and showcasing its technology. Its communications failed to connect the two.

Key learning points:

• Acknowledge and address criticisms. Ignoring them makes you look evasive and audiences less likely to recall your positive key messages.
• Use example, imagery and anecdote to humanise your response. Journalists write about how products and services affect people.
• Watchdog, Dispatches, Panorama et al will go ahead with or without you. If you do not give an interview – and there will be occasions when you cannot – the audience will assume guilt. Give an interview and at least get free airtime to make your case. See if you can get an unedited ‘as live’ interview.

Andrew Caesar-Gordon

McDonalds (Part 2)

Last January we blogged about a Twitter initiative by McDonalds which ended badly. Well, to balance things up, have a look at this instructive article (courtesy of Brand Republic) showing how a viral video social media campaign by the company's Canadian operation worked very well for them.

http://wallblog.co.uk/2012/08/20/how-mcdonalds-created-a-social-media-success-with-questions-campaign/


Andrew Caesar-Gordon

O2 - The Fightback Begins

A nice piece of analysis by Caz Yetman at NixonMcInnes on how O2 struck the right tone online during its outage a couple of weeks ago, setting the bar very high for any brand using social to communicate in a crisis.

http://www.nixonmcinnes.co.uk/2012/07/23/social-crisis-comms-winners-vs-losers/



 Andrew Caesar-Gordon

Proof (almost) that swift and open crisis communication preserves business value

I’ve long been an admirer of the work of Oxford Metrica which focuses on the impact of a crisis on the value of a business.  It shows that the way in which a business responds to a crisis (not the fact of the crisis itself) defines the extent to which value is lost – or sometimes won – in the aftermath of a crisis.  They call it the “acid test” of management.

So I was fascinated to read its 2011 Reputation Review produced in partnership with AON’s risk management practice.  I was especially drawn to a section which focused on ethics violations in the healthcare sector, and the impact of crisis communication on value recovery or loss.

After analysing over fifty cases across a range of companies, Oxford Metrica was clear that the quality of communication had a direct effect on the financial impact to the business.  In particular, those that retained or grew their value following the incident:

• Disclosed promptly
• Demonstrated candour and transparency in their disclosure
• Took responsibility for their actions or those of their agents
• Demonstrated credible follow up behaviours

Those that lost the most value:

• Either delayed communication responses or failed to communicate at all
• Issued opaque or partial responses
• Failed to take responsibility or express contrition
• Attempted to shift blame

I suggest that these principles apply not just to ethics violations or healthcare companies, but to the vast majority of crises and businesses.

But if research doesn’t convince you, what about the experiences of those who have grappled with crises at the sharp end?  Research by IR (Investor Relations) Magazine asked managers who had endured a crisis for their main post-incident learnings.

The top four were almost a mirror image of Oxford Metrica’s findings:

1. Be communicative
2. Be fast
3. Be transparent
4. Be honest

I rest my case.

Jonathan Hemus