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How do you stop the boss flying into a PR storm?

Mon, 04/10/2017 - 14:56

Photo: United Airlines CEO Oscar Munoz via www.fortune.com

The Weekend Word - 10th April 2017

Personal reputations are just as important as corporate reputations. And the former can dramatically impact on the latter. Just ask Oscar Munoz and Jes Staley, respective CEOs of United Airlines and Barclays, after what has been a week to forget for both - Munoz for his handling of the violent treatment of one of the airline's customers who was forcibly removed from an overbooked flight; and Staley for his actions in hunting down a whistleblower which has led to him and the bank being investigated by financial regulators in the UK and America.

 

Whilst it is bewildering that bosses of two major international brands can make such significant errors of judgement, both could have been avoided with much better reputational risk planning. So what can business leaders and boards learn from the fiascos at United Airlines and Barclays:

 

  • Review search and selection processes for company leaders, ensuring that those appointed are a safe pair of hands, with a strong track record  in handling reputational risks

 

  • Appoint a strong communications leader who will stand up to business leaders, flagging up any reputational risks before they take them

 

  • Have the communications function represented on the board so they are part of decision making at the highest level ensuring that crises with the potential to escalate can be nipped in the bud before they do or can be acted upon decisively when they arise

 

  • Identify your reputational risks and how you will respond, leaving no stone unturned, so you're prepared for every eventuality

 

  • Don't say different things to different audiences - communication from Munoz is a case in point externally saying: "I apologise for having to re-accommodate these customers" but reportedly emailing employees calling the passenger "disruptive and belligerent."

 

  • Ensure the company's leader  lives up to what they have set out to do for the good of the business, otherwise  trust will be lost at the highest level of the organisation - Staley for example  pledged to overhaul the bank's culture following its involvement in rigging the Libor interest rate but the whistleblowing events strongly suggest otherwise.

 

  • Never underestimate the power of social media - in the case of United Airlines all passengers were potential citizen journalists and that's why the shocking scenes went viral. Scenes from the airplane have also been re enacted via mediums such as Facebook, the airline has become the laughing stock of comedians online, and customers have posted pictures that have shown customers cutting up their loyalty cards.   Harness social media to issue apologies or set the record straight as the case may be but decisiveness is critical in real time communications, otherwise you're leaving yourself open to trial by online media.

 

  • Ensure heartfelt apologies are issued from the top of the organisation where appropriate and don't dither - companies need to demonstrate strong leadership and show that they care a damn without lawyers being seen to govern the way they communicate.

 

  • Get on the front foot and take control. Say that you will be undertaking a full scale investigation/ review of what went wrong -  in time, for example, on the back of any investigation United Airlines could look at taking a lead in calling for a review on how the airline industry can better manage passenger bookings to avoid a repeat performance.

 

Hits on reputations hit businesses in the pocket - shares in United Airlines fell up to 4% in the aftermath of the saga. And in the case of Staley it’s reported that he could lose his bonus amounting to more than $1m. And it would be no surprise if both CEOs also paid with their jobs.

Personal reputations are just as important as corporate reputations. And the former can dramatically impact on the latter. Just ask Oscar Munoz and Jess Staley, respective CEOs of United Airlines and Barclays, after what has been a week to forget for both - Munoz for his handling of the violent treatment of one of the airline's customers who was forcibly removed from an overbooked flight; and Staley for his actions in hunting down a whistleblower which has led to him and the bank being investigated by financial regulators in the UK and America.

 

Whilst it is bewildering that bosses of two major international brands can make such significant errors of judgement, both could have been avoided with much better reputational risk planning. So what can business leaders and boards learn from the fiascos at United Airlines and Barclays:

 

  • Review search and selection processes for company leaders, ensuring that those appointed are a safe pair of hands, with a strong track record  in handling reputational risks

 

  • Appoint a strong communications leader who will stand up to business leaders, flagging up any reputational risks before they take them

 

  • Have the communications function represented on the board so they are part of decision making at the highest level ensuring that crises with the potential to escalate can be nipped in the bud before they do or can be acted upon decisively when they arise

 

  • Identify your reputational risks and how you will respond, leaving no stone unturned, so you're prepared for every eventuality

 

  • Don't say different things to different audiences - communication from Munoz is a case in point externally saying: "I apologise for having to re-accommodate these customers" but reportedly emailing employees calling the passenger "disruptive and belligerent."

 

  • Ensure the company's leader  lives up to what they have set out to do for the good of the business, otherwise  trust will be lost at the highest level of the organisation - Staley for example  pledged to overhaul the bank's culture following its involvement in rigging the Libor interest rate but the whistleblowing events strongly suggest otherwise.

 

  • Never underestimate the power of social media - in the case of United Airlines all passengers were potential citizen journalists and that's why the shocking scenes went viral. Scenes from the airplane have also been re enacted via mediums such as Facebook, the airline has become the laughing stock of comedians online, and customers have posted pictures that have shown customers cutting up their loyalty cards.   Harness social media to issue apologies or set the record straight as the case may be but decisiveness is critical in real time communications, otherwise you're leaving yourself open to trial by online media.

 

 

  • Ensure heartfelt apologies are issued from the top of the organisation where appropriate and don't dither - companies need to demonstrate strong leadership and show that they care a damn without lawyers being seen to govern the way they communicate.

 

  • Get on the front foot and take control. Say that you will be undertaking a full scale investigation/ review of what went wrong -  in time, for example, on the back of any investigation United Airlines could look at taking a lead in calling for a review on how the airline industry can better manage passenger bookings to avoid a repeat performance.

 

Hits on reputations hit businesses in the pocket - shares in United Airlines fell up to 4% in the aftermath of the saga. And in the case of Staley it’s reported that he could lose his bonus amounting to more than $1m. And it would be no surprise if both CEOs also paid with their jobs.