Delegates left PRWeek's first crisis conference this Wednesday sure of two things: that trouble always lurks just around the corner; and blogs have made it near impossible to muffle damaging messages.
Conveniently, the PROs attending ‘Taking the Drama out of a Crisis' had these points illustrated to them by real events outside of the Dorchester Hotel venue. The allegations on 18 November that the account details of 11 million Nationwide Building Society customers were missing (after a laptop was stolen from an employee's home) were a timely reminder that when a crisis hits, it does so unexpectedly and with speed. Initially dominating the day's main news bulletins, the potentially reputation-busting story spread across the globe, from thedailyindia.com to The Washington Times.
According to the Daily Mail, Nationwide's ‘security lapse' put customers ‘at risk of ID theft'. Worse still, Radio 4's Money Box programme - which broke the story - reported that Nationwide was ignoring the seriousness of the situation. As delegates were told, crisis resolution is best found via immediate, honest and transparent dialogue.
Lessons from America
The timing and nature of Nationwide's crisis did not go unnoticed by Chris Shaw, director of research at Factiva Insight.
His presentation was based on research into the reputational damage inflicted on other companies by ‘data-loss stories'. US ID verification company ChoicePoint and Bank of America, which both lost customer information in 2004, were paid particular attention. ‘With these two cases, we found that data security was becoming a much more widely reported issue in America and Europe,' Shaw said. ‘The Nationwide case simply proves that all companies are under threat.'
Shaw explained how Factiva research from 2004 to 2006 used keywords by journalists and bloggers to calculate the ‘invasion rate' suffered by a company as a result of bad press. ‘ChoicePoint knew it had a crisis, yet it did the bare minimum in communicating the issue,' said Shaw. ‘This was to let consumers know about the leak in the one state where the law forced it to - California.
‘Bank of America, meanwhile, which had encountered similar data-loss problems, went over and above its
obligations. It succeeded in diffusing bad press, and stressed to customers and other stakeholders that new procedures were being implemented.'
Nationwide's handling of its own data-loss problem could be compared to that of ChoicePoint. At time of writing there are no press releases on the Nationwide website that even acknowledge the situation: there has been no official media response.
Rosemary Calendar, senior press manager at Nationwide, tells PRWeek that ‘because this story is about security, we do not want to go into any details with the press'. She adds: ‘I can confirm there was a story and that it has been followed up by trade and national media. But there is nothing more we want to say. Our priority is to talk to customers first rather than the media.'
Nationwide's stance, Shaw told delegates, is a prime example of poor crisis management in action. What's more, he claimed that Nationwide's failure to engage with media will have a negative knock-on effect for other organisations. ‘A single issue will now explode beyond the initial story - something that makes non-associated companies prone to scrutiny,' he said.
For instance, following the woes of ChoicePoint and Bank of America - which were largely confined to the US in terms of media interest - it emerged last year that Microsoft had detected security loopholes in some of its software packages. According to Shaw, the plight of such a high-profile company in this regard has contributed to data fraud becoming the most-reported crime in the US - which partly explains the scrutiny under which Nationwide now finds itself at home and abroad.
At the conference, Shaw reiterated his call to PROs to face crises head on and to have in place clear plans of action. And many other speakers recommended the same approach.
Philip Dewhurst, head of comms at British Nuclear Fuel, revealed: ‘When I first joined BNFL five years ago,
people thought I was bonkers. I joined at a time when the prevailing view was very different to that of today. Ten years ago, if we had any leaks [at a power plant] - and they have happened since I've been here - we would have hidden them. Nowadays, as a company that is increasingly in the spotlight, our approach is totally different. Our first response is to tell as many people as we can whenever something happens, even if it means we face immediate short-term reputational damage.'
In 2001, Dewhurst introduced BNFL's first Stakeholder Dialogue Process, which sees the firm develop bespoke comms strategies for groups as diverse as NGOs, government and even Norwegian fishermen. The latter were involved in 2003 when a chemical - T99 - was found to have discharged from Sellafield into the North Sea, potentially affecting Norwegian fish stocks.
‘Although we suffered initial bad press, we decided that reputation was all about the longer term,' says Dewhurst. ‘Last weekend's visit to Sellafield by Tony Blair, where he was beating the drum for nuclear, just shows the real turnaround the industry has achieved' (see ‘How nuclear got its groove back, PRWeek, 3 March).
Dewhurst's comments are supported by the International Energy Agency, which this month for the first time in 32 years urged governments around the world to build more nuclear power stations.
It could be argued that this shift in public opinion has been more a result of environmental concerns rising up the political agenda than any crisis comms efforts by BNFL.
Dewhurst strenuously refuted this: ‘If it wasn't for our dialogue programme, we could have been deflected off course by recent worries - that nuclear power stations are a terrorist target, for instance. Longer-term crisis procedures are difficult to measure, but that doesn't mean they are not important.'
PRWeek spoke to conference speakers prior to the event. Their presentations may have differed on the day.
CASE STUDY 1: BUNCEFIELD
At 6.02am on Sunday 11 December 2005, the Buncefield Oil Depot in Hertfordshire exploded with such force that it measured 2.4 on the Rickter Scale, and could be heard as far away as Holland. It was to become the largest fire in the UK since World War II.
By 6.04am, Hertfordshire police had been called, and by 6.08am the first press officers had been alerted. By 6.40am, Colin Connolly, head of corporate comms at Hertfordshire Constabulary, was at the scene. Ten minutes later, the first press release had been issued.
Connolly says the handling of the crisis went to plan because his ‘media template' worked. ‘We already had a plan in case there was an accident. We issued our first briefing at 8am and held our first press conference at 9am,' he reveals.
The efficacy of the response meant the team was able to deal with some of the less predictable elements - such as the fact that some media were reporting it to be a terror attack. Connolly says: ‘We mobilised the media in our canteen, and the 9am briefing diffused the terror rumour. This meant we could focus on other messages - not to call 999 and not to panic-buy petrol. On-the-day messages were that no deaths had been reported and that we were keeping an open mind as to the cause of the fire.'
TV and radio monitoring was the responsibility of one Hertfordshire Constabulary PRO, who fed the rest of the team information about what to rebut and likely press questions. The team also sent out email bulletins to brief town councillors. By the time the fire was put out, the force had arranged nine press conferences.
Connolly says it had learned from previous crises. ‘We learned from the Hatfield and Potters Bar train crashes; we moved our chief constable away from management duties so he could spend his time liaising with media.'
But was it a perfect response? ‘That never happens,' admits Connolly. ‘We didn't record press conferences and found we had no record of what had been said. We now have our own video equipment. Also, I was working 19-hour days, and expected PROs to come in the next morning to do the same. We now have a rota system in place.'
CASE STUDY 2: PS3 DELAY
Hell hath no fury like videogamers scorned. An announcement in March that Sony's long-awaited PlayStation 3 - positioned as a rival to Microsoft's Xbox 360 - had been postponed until November was bad enough. A later announcement, that the European launch would be further delayed until March 2007, was unacceptable.
‘All the king's horses and all the king's men couldn't put this disastrous mess back together again,' wrote one blogger.
Blog aggregator Tech's Message said the delay was ‘a hefty kick in the crotch for PlayStation fanboys' and was scathing about Sony breaking its promise for a simultaneous worldwide launch.
Worse still, author Philip Bain said on his blog: ‘If you want my advice, get a Wii [by Nintendo]. It will be out this year, cost about a third of the price of a PS3 and introduce real control innovation.'
The ability of the bloggers to pursue a crisis is illustrated in analysis by biz360, which tracked how bloggers responded to Sony's first official press announcement on 14 March. It found nearly a quarter of all mentions were negative, and only 14 per cent of blogs reporting the delay were favourable. It also found that some blogs were commentating on the delay two days before Sony's official announcement.
Battle with bloggers
Conference speaker Nick Sharples, director of corporate comms at Sony Computer Entertainment, says: ‘The nature of the PlayStation consumer - a net-savvy user of social media - means we have less straightforward crises to deal with. We have to deal with criticism and rumour. The latter is especially damaging, as it can quickly turn into perceived fact.'
Sharples has worked with Harvard PR to design a ‘real-time spider map'. It shows the keywords used by bloggers, and reveals the links to and from their blog sites. ‘One website in Spain - meristation.com - wrote that the PS3 would not be out until May 2007. This was wrong,' says Sharples. ‘It could have got to the BBC, but we were able to nip it in the bud before that happened.'
Sharples says the speed at which information - and disinformation - spreads is a problem. ‘There have been more than 100,000 mentions of PS3 in the past three months. While individual blog sites can be benign on their own, they have the power to disrupt through aggregation. The one good thing about the aggregators is that they are beginning to see themselves more as publishing houses, so they are concerned about accuracy.'
CASE STUDY 3: HATFIELD RAIL CRASH
The Hatfield rail disaster killed four people and injured more than 70 in October 2000. At this week's conference, Alan Hyde, corporate affairs manager at GNER, discussed Hatfield publicly for the first time, as well as the Selby train crash in February 2001, when a driver steered his Land Rover onto tracks, killing three GNER staff and ten passengers.
Hyde says that although GNER had crisis plans in place, no amount of planning can fully prepare staff for dealing with real incidents. ‘Our response guidelines were built around being quick, authoritative and caring, but only the first two can be planned,' he explains. ‘The third comes about not from any strategic plan, but by the culture of the organisation.'
Hyde says that after Hatfield, it ‘felt right' to fly CEO Christopher Garnett to the site of the incident within one hour. ‘Aerial footage was also supplied to media, because by then there was a press cordon,' he adds. ‘We had received 3,000 calls by this point. Garnett showed genuine compassion, something no briefing could have prepared him for. This proved to be important, because at this point the cause of the crash was not known.'
He says the greatest challenge of Hatfield was managing the changing nature of the story. ‘Initially, the media wanted to know three things: what exactly happened, why it happened, and who was to blame. We didn't want to get into the blame game early on, but the next day a broken rail was suspected, so we changed our response - we had to take a different tack very quickly.'
Choice of channel
At this stage, Hyde turned to trade press - specifically Modern Railways and Rail Magazine. He did this for two reasons: these magazines would write more authoritatively about the broken rail and the safety record of the railways; and their editors were being used by BBC and ITV as expert commentators for news bulletins.
It was through them, says Hyde, that he wanted to highlight the opinion that Railtrack, not GNER, was culpable. ‘We couldn't have said this ourselves,' he says. ‘Despite the awfulness of the accident, we couldn't have said "ten people die on the roads each day". But through others, it was possible to start this debate.'
Hyde says crisis management should be seen as a ‘marathon rather than a sprint'. He adds: ‘There will always be unexpected scenarios. One press officer was woken by a journalist at his door, convinced he was hiding the train driver, who media were desperate to talk to.'