PR Influences editor and Network PR Managing Director Grant Common wrote an article in the current issue of PR Influences, presenting three examples showing the impact of crisis and issues management on perception and reputation.
Case 1: MasterFoods
Common lauds New South Wales confectionery maker, MasterFoods, for turning a crisis into a major publicity and brand building opportunity.
Internet sources report that in July this year, MasterFoods received extortion letters threatening that seven poisoned Mars and Snickers bars were among those out in the market.
Common says the company “wrung every possible media angle out of the story,” inviting media to witness the recall of 3 million Mars and Snickers bars, their destruction in dump sites, and the reintroduction of safe bars to retail shelves, with every media newsroom in New South Wales receiving large complimentary boxes.
Although the company lost money in withdrawing stocks, Common points out that strengthened brand awareness more than made up for it, adding that sales shot up by 250 percent in the first week of the products’ return on retail shelves.
Case 2: Cisco
Common presents the Cisco case, which he finds as “disconcerting behavior for a company in such a dominant position in the enterprise sector,” and which he hopes to be a “momentary lapse which they should learn from.”
According to Common, Cisco tried to use legal measures “to prevent a former internet security systems analyst from discussing alleged security vulnerability in its software at a major industry conference.” Due to the uproar from the internet community and media attention, though, Cisco had to admit the existence of vulnerabilities which could have compromised passwords of customers. Common says the perception was that Cisco’s admission lacked full disclosure and the company was reluctant to admit mistakes.
Case 3: Australian Securities and Investment Commission (ASIC)
Common criticizes how the Australian Securities and Investment Commission (ASIC) handled “its explanation for its failure to pursue prominent businessman Steve Vizard over insider trading” as “a ham-fisted effort that will undermine everything they do (and say) for the foreseeable future.”
Although he concedes that “there may have been some mitigating circumstances beyond ASIC’s control” and “it may have been technically right in what it decided,” Common says it made a mess in failing to communicate, and the bad publicity it received from Australia’s business, financial and political commentators will henceforth mar its reputation and credibility as Australia’s corporate watchdog, inhibiting its “ability to fulfill its statutory function, which includes winning business and public confidence for the decisions it makes.”
In the final analysis, crisis management requires sincerity, transparency and, again, effective communication.