Crisis Solutions - on tour throughout Europe

Crisis Solutions is currently on a tour of European financial capitals, running incident management workshops and exercises.

This week CEO Dennis Flynn was in Milan delivering a workshop at a major investment bank. Here is a comment from the client’s Deputy Chief Operating Officer:

Thank you very much for your guidance (during the) exercise for the Milan crisis community. I have only received very positive feedback from all attendees including (my boss) who was initially sceptical of the benefits. I understand they would appreciate a second round any time.

Next stop: Frankfurt and then Zurich

A failure of the imagination

The Irish banking crisis – a crisis management perspective

The final 9/11 report on why the US was so ill prepared for the attack on the Twin Towers said: ‘We do not believe leaders understood the gravity of the threat’ and that the most important failure was ‘one of imagination.’

In July of this year all Irish banks passed the so-called stress tests and were given a clean bill of health. We now know the banks are utterly broken and have brought Ireland to its knees.

The stress tests were worthless with the wrong questions being asked, but why? Was it simply so benign answers, the world wanted to hear, would be forthcoming?

Dennis Flynn, Crisis Solutions CEO, says, ‘The difference between business continuity and crisis management is that the former prepares for the expected while the latter focuses on the unexpected. One is mechanistic and quantitative, the other freewheeling and qualitative.

He believes that effective crisis handling only occurs when the two work in lock step, ‘Those involved in business continuity must take risk assessment seriously, be brutally honest about potential crises and not pose questions that provide comfort blanket answers.’

Reflecting on the stress tests and the Irish banking crisis Flynn says, ‘Yes again, poor crisis readiness is shown to be a failure of the imagination’.

Irish economic meltdown - a crisis communications perspective

Until recently the Irish economy was known as the Celtic Tiger – these days it looks more like a white or perhaps green elephant.

Everyone knew that Ireland was going to have a bailout foisted upon it, whether from the EU, the IMF, the ECB or all three. Irish banks, now known as zombie banks, are in tatters and the government in a state of collapse but still two days before the inevitable rescue package the Irish government continued to play down the level of crisis.

Prime Minister Brian Cowen said, ‘The strategy being pursued by Government has addressed the difficulties facing the banking system, is bringing sustainability to the public finances and is resulting in ongoing improvements in competitiveness.’

He went on to say that his government was not looking for immediate outside assistance. It seems two days is a long time in politics because yesterday he said, ‘The European authorities have agreed to our request’ and a bailout accepted.

So what happened in two days? Why was everything under control and a bailout not required and then 48 hours later the PM had to don the hair shirt and proffer the begging bowl?

Well of course nothing changed in two days - what we are looking at are two different views of the same narrative.

International financiers and EU policy makers feared that if Ireland wasn’t shored up, the contagion would spread to Portugal, Spain and beyond (it still could), while the Irish government were dead set on saving their skin and didn’t want to accept the inevitable austerity measures that would be a condition of any bailout.

Now the greens seem to have triggered an election that the government say will be held in January - that’s if it can hold on that long. So a bailout is being put in place and it looks likely the government will be booted out of office in short order.

The best crisis communications in the world couldn’t save the Irish government or the Irish economy but surely accepting the reality of the situation and not engaging in wilful obfuscation would have been a better way to go instead of saying ‘we have the situation under control’ to then hitting the brakes and executing a spectacular u-turn.

So perhaps it’s not that the Irish economy is a white elephant, it’s the elephant in the room that the government was unable or unwilling to acknowledge.

The social media revolution

Are you ready for this?

Qantas crisis

It is interesting to note that Qantas are keeping the name of the engine manufacturer, Rolls-Royce, firmly in the frame.

Similarly a press release on the Airbus website states, ‘With aviation safety being of paramount importance to Airbus and following the engine failure of Qantas A380 flight QF32 on 4th November 2010 Airbus has issued an All Operators Telex asking A380 operators with Rolls-Royce engines for power plant inspections to ensure continuous safe operations of the fleet. The document supports the requirements issued previously by engine manufacturer Rolls-Royce. Operators with Engine Alliance engines are not concerned.’

This contrasts with BP’s handling of the Gulf of Mexico oil spill where at least initially they took full responsibility for the accident. Latterly they tried, largely unsuccessfully, to bring Halliburton and others into the picture.

Crisis Solutions in Marketing Week

Crisis Solutions has coverage in the opinion section of Marketing Week. Go here.

Marketingweek.co.uk has 218,766 monthly unique users and provides news and information for marketing, advertising and media professionals.

Brand and reputation

The Lizard has been reading an interesting article in The Marketer magazine on brand and reputation. It can be found here.

The article attempts, with some degree of success, to conflate many different marketing and brand ideas. One, which I would dispute, is that the Internet has changed everything when it comes to the consumer’s relationship with a product.

When Perrier had a problem with their bottled water in the 80s (benzene was found in the drink and the recall was handled very poorly) the consumer knew all about it and when Perrier brought their water back on sale, the bottles were smaller and the price higher. The customer appeared to be paying for Perrier’s mistakes and they weren’t happy. As a result Perrier was soon gulped down by Nestle. What’s different now, and it is largely a product of the Internet, is just the speed with which consumers can gather information and voice their opinion.

The other issue the article raises is M&A. Particularly when a corporate giant buys a boutique brand well liked by the public. It’s a tricky move for all sides to pull off as Green and Black and Innocent have found. As Ben and Jerry’s point out, when a small brand is gobbled up it must protect its own identity.

One example would be Pret a Manger. It’s an expensive but generally well-liked lunchtime grab and gobble food store that makes much of its green image. This is on the front page of it’s website: ‘Pret creates handmade, natural food avoiding the obscure chemicals, additives and preservatives common to so much of the 'prepared' and 'fast' food on the market today.’

In 2001 it was snapped up by McDonald’s the very antithesis of all that is ‘Pret’ and in 2008 it was bought by private equity house Bridgepoint – capitalists red in tooth and claw and very far from a small boutique brand. However because Pret have managed to keep clear blue water between their owners and their brand they haven’t suffered. A lesson for any corporate giant that wants to swallow a small but much loved minnow.

Maldives PR nightmare

I suppose couples who have just returned from getting married at the Vilu Reef Beach & Spa Resort on the Maldives must be wondering what was actually said at their ceremony.

Thousands have now watched the shaky YouTube video of the Swiss couple renewing their wedding vows at the resort where the celebrant calls them ‘swine’ and ‘infidels’ and much worse.

Opinion on the Internet seems to be equally split between those condemning the locals appalling rudeness and the foolish westerners wanting to attach some sort of faux spirituality to their marriage.

I suppose it’s the equivalent of a chef spitting in the soup at a posh restaurant, something we’ve all thought about but don’t want to dwell on.

Locals working for tourists the world over come to resent the incomers, but of course if the tourists don’t come the locals have no work.

This is particularly true of the Maldives, which contains many very poor people who as a matter of course rub shoulders with the super rich. These disparities have produced an ugly response.

The Maldives government is now engaged in damage limitation and the two local people seen on the video have been arrested. On the official Maldives’ website a government spokesperson says, ‘No stone will be left unturned to ensure that an incident like this never happens again.’

Well, they had better make sure it doesn’t because the Maldives have no natural resources outside of fish and banks of sand and no other industry except tourism. If the tourists stop coming then they really have nothing.

My bet is that the rich and those on a once in a lifetime trip wont be put off, but in future many will want their wedding vows in English or a language they can understand.