Rebuilding trust is a long, hard chore. When it comes to crisis management, the way companies re-build customer shareholder trust is what differentiates a well-respected, trusted organization from one that is just well-known.
After a crisis, buying risk appetites drop and sensitivities are elevated. Everyday operations will be scrutinized in the upcoming months, if not years, following. And serious corporate mistakes create a lens through which many stakeholders will continue to view the company regardless of the sincerest attempts to “make good.”.
And while each crisis response plan is a little different depending on the company, there are some common milestones.
Here are a few tough questions to expect:
- Here are a few tough questions to expect:
- Who’s at fault? Who’s taking responsibility?
- When will the situation be resolved?
- What are you doing for those affected by the crisis?
- How does this affect me?
- Why/how did this happen?
- What are you doing to fix the problem?
- How can you guarantee this kind of thing won’t happen again?
Other considerations:
- Who are your primary stakeholders?
- How will you reach them?
- What information will they want and need?
- What are your short and long-term goals?
- What are the financial and legal considerations?
Six actions you can do when addressing the above questions:
- Demonstrate leadership
- Lead with facts
- Keep business goals and vision in focus
- Make amends
- Be prepared to put practices in place to reaffirm your commitments
- Communicate progress and roadblocks
The road to reputational recovery is a place where there exists an opportunity to re-evaluate and reinforce your company’s promise.
After all, this is how your customers and other stakeholders identify your company; it’s what sets your brand apart from the competition. It may even be a time to re-examine the ethics behind your company’s business practices.
One timely, and textbook example, stems from the arrest of the two black men in the Philadelphia Starbucks. The two men were arrested after asking to use the restroom - while they waited for the third person in their party. The trio was going to use the Starbucks as “the second office” as many people do. An employee refused the request as the men had not ordered anything yet. The pair sat down to wait – but were asked to leave. An employee called the police… and a video of the event has been viewed 10 million times in Twitter.
Starbucks is one of the most high-profile and beloved brands in the world and its long-time ex-CEO Howard Schultz was not one to shy away from difficult conversations over thorny issues such as gay marriage, gun control and Congressional gridlock. The company touts its diverse workforce — minorities account for 18 percent of Starbucks executives with the title of senior vice president or higher and 43 percent of employees overall.
New Chief Executive Kevin Johnson has taken control of the situation. The manager of the Philadelphia locations has been removed, Johnson has apologized for the “reprehensible” arrests of the two men in Philadelphia on Thursday and took personal responsibility for the incident.
And in a very tangible move, Starbucks will close 8,000 company-owned U.S. cafes for the afternoon on May 29 so 175,000 employees can undergo racial tolerance training. It will also provide training materials for non-company workers at the roughly 6,000 licensed Starbucks cafes that will remain open in locations such as grocery stores and airports.
Brand trust is in the eye of the beholder, so it’s up to corporate leadership to convince onlookers that the company’s doing the right thing and putting their concerns first. Ultimately, with ethical business practices governing a company’s operations, it’s possible to regain some of that lost shareholder value, and more importantly, shareholder trust. But it’s in opening and sustaining that two-way dialogue that makes the difference.
To that: Starbucks’ Johnson and the men, who were released without charges, have “engaged in constructive discussions about this issue as well as what is happening in communities across the country.”
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