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Public Relations Reputation Management Crisis Management

Introduction to Crisis Communication

In the rapidly evolving landscape of modern business, organisations face a multitude of challenges that can quickly escalate into full-blown crises. From product recalls and data b...

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In the relatively small world of financial services, it can be easy to be ‘tarred by the same brush’ as your less scrupulous counterparts. Responding to an issue swiftly and appropriately can defuse and prevent damage not just to your own organisation, but to the reputation of your entire industry. Here’s a real life study in how not to go about it – and some tips for success.

It’s not altogether unlikely to see the words outsourcing and bank used in the same sentence. In fact, I would guess that the rate at which they have been used together has increased exponentially over the last four years, and indeed since the start of the financial crisis.

The reason for this is not a secret either – in a financial services world of shrinking margins and increasing liquidity standards for banks, tough business decisions have been made, and will continue to be made, to ensure compliance, maintain profits and boost efficiencies.

But that explanation offers a rather clinical view of what is often a very personal issue. Ultimately we are talking about people’s jobs, which can be referred to as people’s livelihoods, which can also be referred to as people’s lives. And when it comes to people, if you don’t show sensitivity and understanding you can find yourself bearing the brunt of the wrath of the people.

Which brings me to this blog. This month, the Royal Banks of Canada (RBC) announced that it would be replacing some local jobs through offshore outsourcing. The way that the bank handled its announcement and the subsequent social media uproar has made it a very real case study of how to avoid an issue becoming a crisis and what NOT to do if said crisis does occur.

The brief overview of events is as follows:

  • In February, the Bank announced that it would be replacing around 45 staff with offshore workers, to take effect by April.
  • Response to the announcement, especially in social media, was immediate and negative.
  • The RBC put forward its Chief Human Relations Officer to appear in an interview addressing the issue.
  • This approach led only to further social media backlash reaching levels that meant not only could the CEO no longer stay in the background, but the hiring (and other) practices of all Canadian banks became fair social media game and the Canadian government stepped in with an official enquiry (read: the issue tipped over into a crisis).
  • The RBC CEO this week issued a public apology in the form of an ‘Open Letter to Canadians’ and has assured the public and the affected 45 staff that they will be offered comparable job opportunities at the bank.

It is worth mentioning that despite the intense backlash the RBC received, a number of people came forward to present the view that offshore outsourcing is not always bad, and may be one of the only ways that Canadian businesses can survive.

While mine is not to debate the truth or otherwise of this view, I would like to flag a couple of key crisis communication pointers highlighted during the debacle.

1. Choose the right spokesperson

Your crisis comms spokesperson may not be the same as the one you use for other media interviews. His or her most important traits are leadership and empathy: ‘showing you care’. While the latter may not always be the forte of the CEO, remember that who delivers the message can be nearly as important as what they say and how they say it. Having a junior person respond publicly to your issue is not only risky, it does little to show you care. (Remember the universal condemnation the BP CEO Tony Hayward received when he went on a yachting holiday just after the Deepwater Horizon oil spill? This hardly conveyed the sense that the issue was a priority for the leader of the business and served only to inflame an already explosive situation.)

When RBC responded to an already agitated media it put forward chief human relations officer, Zabeen Hirji rather than the CEO, Gord Nixon. While Hirji may have been the right spokesperson for a ‘business as usual’ HR-related interview, a far stronger message about the seriousness with which the bank viewed the situation would have been sent if the CEO had spoken from the outset. For more on this, check out this crisis blog.

2. Have a crisis plan

When it comes to crisis and issues communication, most situations can be planned for. You won't be able to cover the details of every scenario but you can certainly map out and agree very clear processes that are transferable irrespective of the exact nature of the issue concerned.

This plan should outline your spokespeople (who should be media trained) and include a social media response plan and protocols. The RBC incident shows yet again that social media channels are where crises increasingly break and play out. If your company is not present on these channels you simply can’t effectively fulfill your role – which is to be the most accessible and up-to-date source of information on the issue.

And the final crisis management tip the RBC case illustrates – and perhaps one of the hardest for business leaders to understand – is the need to:

3. Address the outrage (the emotion) not the incident

It took too long for CEO Gord Nixon to offer an official apology to staff. The RBC allowed the conversation to be about the business reasons for the outsourcing. They did not recognise and address fast enough the core issues: Canadians were personally outraged because they were losing their jobs, their lives were significantly affected, and the jobs were going to people outside of Canada.

For best results in dealing with a crisis, listen and address what people are saying and feeling. Don’t conduct a theoretical conversation with no one, as the RBC did in its initial response. The nature of a crisis means anger and other emotions are likely and you need to connect and respond to the core of that. In this case, Nixon did say in the end: "I want to apologise to the employees affected by this outsourcing arrangement as we should have been more sensitive and helpful to them."

In the meantime, not just RBC but the entire Canadian banking sector had been through the wringer.

The question now being asked is, was that too little, too late?

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