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Communication During a Corporate Scandal

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Every corporate scandal has it’s own permutations. Most companies facing a corporate scandal are reputable and respected companies that generally work hard to develop a brand synonymous with reliability and trust. Getting hit by a scandal can have far-reaching implications for a company's brand, customer loyalty, and product/service sales. Rarely do management or staff seek to cover up errors. Occurrences of such are rare. However, quality assurance system inconsistency, indecision, blame and confusion can all combine to give an impression of incompetence or dishonesty.

The larger the company and more complex the supply chain and the longer it can take to identify the exact nature and location of risk. A delay of days as staff frantically try to identify all details, confirm them, act on them, and shape them in a manner that can be communicated and understood will rarely take less than several days. These are days over which confusion can reign, fear can take hold, and trust can subside. Discussions over the harm to the economy, the share value, the demand for product, and the credibility of Fonterra will fill many newspaper articles, blog sites, and talk back radio comment for some time to come. Critical at a time like this is the capability of a company to communicate key issues with speed, accuracy, honesty, and humanity. No communication effort will be perfect but some basic guidelines based on communication psychology will assist the rebuilding of trust and confidence among all those affected.

  1. Spokespeople must have the ability to emotionally engage, empathise, admit errors, answer questions put to them succinctly (no waffle, explanation is fine, but no waffle) and genuinely want to keep people informed. They must be comfortable in front of a camera, be able to speak in sound bites, have excellent emotional intelligence (understand the need behind a question asked), be calm, and be empathic to the concerns an interviewer expresses on behalf of members of the community.

  2. Spokespeople must be well briefed on confirmed facts. Speculation creates confusion. A few known facts at this time, are better than lots of maybes. Criticism of not providing enough information is better than criticism for providing incorrect or misleading information.

  3. A company’s leadership must have firm plans for managing the issue that has generated the crisis in partnership with stakeholders (customers, suppliers, regulatory agencies, the wider community). This means a plan for ensuring accurate information flow, genuine opportunity for engagement, and genuine openness to assistance and support. Dealing with everything ‘in-house’ my be desirable and possible given the likelihood of existing expertise within a company, but risks an impression of lack of accountability. External scrutiny and involvement promotes trust and transparency – key ingredients for a successful brand.

  4. The company’s leadership must be highly visible as spokespeople. While leadership is often busy managing the crisis, with considerable justification, this must be balanced with access to the media.

  5. Fill information vacuums and make access to the latest information easy to obtain – radio advertising, web sites, free calling telephone lines for the latest information and advice, cell phone updates by text etc. The purpose of these is for information that ensures safety and accuracy.

  6. Set the tone of communications as soon as possible. While the media will set the tone initially it is important that a company’s communication strategy quickly changes from being reactive to proactive. This can be done through seeking media contact to communicate the latest information, steps taken, information uncovered, and progress made. If the media continue to set the pace of communication over time this will give the impression that without media involvement the issue would not be managed – a No No for any company reputation.

  7. Apologise, take responsibility, and focus on recovery and what the company is doing now that is different from before. At the end of the day people understand mistakes are made, even horrific ones. But no brand will ever recover from the perception that no lessons were learned.