Recognizing the CMOs role when it comes to crisis

Crises are particle accelerators for brands that reveal their fragility and catastrophe reveals four cardinal rules CMOs can help deploy with PR.

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Recognizing the CMOs role when it comes to crisis

Dean Crutchfield, Article, September 14th, 2009, Advertising Age

http://adage.com/cmostrategy/article?article_id=138995

Crises are particle accelerators for brands that reveal their fragility as we’ve just witnessed with bankrupt banks, tampered-with pizzas, poisoned pistachios, dodgy cookie dough and lethal drugs. In light of the innumerable gaffes “brands” make when dealing with crisis, catastrophe reveals four cardinal rules CMOs can help deploy with PR.

1: Expect the best, Plan for the worst

“I don’t think anybody anticipated the breach of the levees.” George W. Bush, September 1, 2005.

When crisis strikes, news and social media burst and formal statements are rendered useless. Stocks don’t have a memory recall button, but the public do. The problem isn’t resources; it’s about managing the crisis with a can-do culture and strong values of trust. Many claim it, but few deliver: J&J’s $100M rapid response to the contaminated Tylenol crisis in ’82 prepared J&J for the acetaminophen overdosing debacle in ‘09, but (what) did we learn?

Failing to prepare is preparing to fail. Captain Sully’s preparedness for the “Miracle on the Hudson” was a far cry from the sludge bank of stoic corporate puff supplied in the (delayed) response of US Airways’ CEO, Doug Parker. The same rang true for Merck’s smoking gun with Vioxx that demonstrated how much the company’s leadership was in disarray. Merck communicated greater interest in maintaining their $2.5B brand than their vision “To preserve and improve human life.” Their disdain for the facts took them 4 weeks to withdraw Vioxx!

Consumers may be forgiving, but a crisis can cost a brand’s reputation in a single battering: “The court of public opinion can put you out of business even faster than a court of law.”

2: Decentralized decision-making

Crises are too quick for lengthy procedures; you can’t hide in bureaucracy, you can’t be pusillanimous and trust is vital. Mississippi Power’s success restoring power in 12 days during Katrina was twenty “Storm Directors” with crystal clear assignments and a phone directory of people who could get things done. As the Storm Director, Robert Powell said, “If you don’t know what you’re supposed to do, the manual is not going to help you now.”

Mattel had experienced 28 product recalls prior to the lead paint scare in ’07. When the news broke a team of sixteen opened all lines of communication with 300 media channels and its CEO, Robert Eckert, made 14 TV appearances and 20 calls to journalists in one day, a model for decentralized decision-making. A similarly integrated, multi-platform response strategy resulted in favorable customer opinion to Nestlé’s immediate action to withdraw its Toll House cookie dough brand this summer.

The Fortune 100 favor Twitter as a key communication tool according to a study by Burson Marstellar. As social media becomes ubiquitous and customers participate more, the role of the CMO is crucial in crisis as they’re able to inculcate social media to empower customers to play a key role: South West Airlines this summer, immediately posted updates on Twitter as the damaged plane landed, which illustrates the ability to handle the urgency of crisis communication.

3: Disaster begs a bold response

Marshalling a crisis team and a response plan are critical, including weighing the need for autonomy over the preferred unified leadership approach. Citi was the largest US bank prior to the meltdown and its fall from grace was accelerated by Robert Rubin’s “probabilistic” approach to decision-making that clearly misrepresented the severity of Citi’s exposure to the crisis that broke the brand and the bank.

Rest assured, when you need an ambitious, audacious and imaginative response, being forced on ineffective policies by some species of corporate bureaucrat creates a morass. During Katrina, with the cash economy broken, Mississippi Power’s head of marketing helped instigate a bartering system: electricity for fuel supplies with Chevron; consequently supplying the Eastern US and Gulf coast with fuel! Evidently, the more you want to achieve the more you achieve.

4: Check, Test, Check, Test

Brand integrity is compromised through fear. Studies show that companies who handled a catastrophe well have recovered and even exceeded pre-catastrophe stock price.

In a crisis fear is often the company’s first reaction that culminates in either a lack of compassion and/or stubborn refusal of the facts. Firestone tire treads were causing fatal crashes on the Ford Explorer, but customers were blamed first for over inflating the tires, then both brands publicly defenestrated each other for faulty designs and concomitantly fell into silence until dragged before Congress. Propitiously, Ford employees are currently being trained on how to better present the company via the use of Twitter to interact with customers.

Post adhoc ergo propter hoc (after this, therefore because of this)

Decontaminating a brand doesn’t need a weatherman to know which way the wind blows. Bad news is good news to the prepared. When you need to be big, strong, fast and mobilize a massive, sweeping redistribution of information to the public: Hide Nothing, Tell All. With that mantra in hand, there’s a phrase popular in the Whitehouse: “Never waste a good crisis.”

Is Twitter fait accompli?

The court of investor opinion is still out on how much value gets delivered beyond Twitter itself.

Remember Second Life? It’s (not) living proof of how short lived Internet fads can be, especially for adults! Is the same fate awaiting Twitter? Just look at some of the ridiculous facts and stats: alerting thousands of people from the floods in the UK and fires sweeping across CA, soothed stressed families and fellow travelers from a holed (up) Southwest plane, allowed us to shop where Ashton K was at and enabled the “public” challenge to a theocracy. Add to that the 44 Million people who visited its web site in June, that it’s the online choice of the Fortune 100 and is currently valued at $1 Billion is not impressive: At a recent Twitter conference the entire audience indefatigably believed that it’s value would be far greater than Facebook ($6.5Billion) within 5 years!

Why all the frenzy given that Twitter’s current revenue is a poultry $4.4M with revenue projections of only $140M by 2010. Why? Because real-time web is bringing a revolution to the web as we know it and Twitter is a key player that represents a whole new world for users, entrepreneurs and investors. Real-time web is exploding because high speed Internet, smart phones and technologies that enable the instant transmission of data and messages are soon to be effortless and everywhere: Currently there are 800M PC’s on the planet, but there are 3.5Billion cell phone users equipped to use real-time web. Tweet that.

Is Twitter a fait accompli? The court of investor opinion is still out on how much value gets delivered beyond Twitter itself. Can Twitter make serious dough? The same question is relevant to all in the space. With Twitter, what people are tweeting and sharing can be a powerful indicator of their personal interests and purchasing intentions. Therefore, these tweets house a rich new body of data that is currently outside the reach of the search engines. As Kimbal Musk, the CEO of OneRiot, a real-time search service said, “Traditional search is like going to a library. Real-time is the right search, right now.”

“Traditional” search. That says it all, but Twitter has a real-time revenue challenge.
On the one hand they need to keep ramping up their users to provide value for existing members, but if they push too fast to generate revenue it scares users away and if they leave it to late the business could die. Twitter does not wish to charge users fees, but in addition to e-commerce revenues e.g. digital games, could they charge rent to those 3rd parties keen to be on the platform:

On the subject of free, the tweeting optimist said, “The glass is half full.” The Second Life pessimist said, “The glass is half empty” and the post MySpace rationalist said, “The glass is twice as big as it needs to be.”

Ultimately it’s all about abundance versus scarcity. The new economy is about abundance whereas the old economy is about scarcity. Bundle these together and we could have some very interesting business models going forward.

Who is winning the war on Health Care?

Marketing 101 needed for right wing shibboleths

Those against it are winning the war: Shame on them for groveling at the sphincter of politically idiotic extreme right wing shibboleths. These kinds of mindless, garrulous attacks are obtuse, dilatory and negligent. That said, the plan is clearly not shovel ready in the “court of public opinion” proven by the fact none of us really know what it’s all about – “Could you be a little more vague please?” The Republican right wing shows that (sadly) you can build a communications strategy out of sound bite e.g. the popular use of the phrase death panels has been highly effective.

Let’s not forget, fear and uncertainty breed contempt. It’s the classic three ways we respond to change: anger, resignation or seeing the possibilities. We can’t see the possibilities because we don’t really understand the benefits. As Bob Dylan sang, “The answer is blowing in the wind.”

You can’t satisfy all the people all the time or some of the people all the time, but you can help all the people sometimes. To do so the Obama administration needs to apply the fundamentals of marketing communication – AIDA:

1. Create awareness. They get full marks, but where’s the beef? Facts are stubborn things and vision without action is a daydream; action without vision is a nightmare.

2. Generate interest. They achieved in buckets, sadly the wrong buckets because they didn’t properly communicate the benefits. They’re focused and too concerned about losing, rather than anxious to win (over the nation and media’s fears). Therefore, they need to be the ruthless enemy of ambiguity, so that we can understand the benefits i.e. sell me the headache not the aspirin.

3. Desire is built by demonstrating, not asserting. To win the Obama administration needs to help people understand and become vested in the plan: If you just tell me I’ll forget, if you show me I won’t remember, but if you involve me I will act. For that to happen it is not just about 50 Million uninsured people!

4. Actions taken now around the country are critical. Currently it’s like a sow trying to feed 12 babies with 9 teats. Obama hitting the town hall circuit is a much-needed tonic, but the stump pitch needs to be relevant to me, not just the uninsured. The simplest answer is to act and if bipartisan approaches are not going to work, the alternative is a rifle shot solution.

Branding: Cheap, Good or Fast?

There is an upside in the growing presence of cheap online “design” services

It’s often said there are three ways you can employ brand consulting: Good, fast and cheap, but you can’t have all three. Perhaps there is an upside in the growing presence of cheap online “design” services? Put simply, brand building is based upon what you believe in the brand i.e. the feeling and what you get from the brand i.e. the experience. Cheap online design supplies neither and therefore, promotes the power of the more sophisticated brand consulting offer.

As Peter Drucker said, competitive advantage is based either on price or on differentiation. The same goes for branding and design services. Let’s hope both win as there is plenty to share out there.

Then & Now

100 years make a difference

100 years makes a difference

The average life expectancy was 47 years.

Only 14 percent of the homes had a bathtub.

Only 8 percent of the homes had a telephone.

There were only 8,000 cars and only 144 miles of paved roads.

The maximum speed limit in most cities was 10 mph.

The tallest structure in the world was the Eiffel Tower.

The average wage in 1909 was 22 cents per hour.

The average worker made between $200 and $400 per year.

A competent accountant could expect to earn $2000 per year, a dentist $2,500 per year, a veterinarian between $1,500 and $4,000 per year and a mechanical engineer about $5,000 per year.

More than 95 percent of all births took place at home.

Ninety percent of all doctors had no college education.

Most women only washed their hair once a month, and used Borax or egg yolks for shampoo.

Canada passed a law that prohibited poor people from entering into their country for any reason.

Five leading causes of death were:

1. Pneumonia and influenza
2. Tuberculosis
3. Diarrhea
4. Heart disease
5. Stroke

The population of Las Vegas, Nevada, was only 30!!!! I think it still is…

Crossword puzzles, canned beer, and ice tea hadn’t been invented yet.

Two out of every 10 adults couldn’t read or write.

Only 6 percent of all Americans had graduated from high school.

Marijuana, heroin, and morphine were all available over the counter at the local corner drugstores. Back then pharmacists said, “Heroin clears the complexion, gives buoyancy to the mind, regulates the stomach and bowels, and is, in fact, a perfect guardian of health.”

Freedom is Never Free

What happened to the 56 men who signed the Declaration of Independence?

I often wondered what happened to the 56 men who signed the Declaration of Independence and was sent this by a friend:

Five signers were captured by the British as traitors, and tortured before they died. Twelve had their homes ransacked and burned. Two lost their sons serving in the Revolutionary Army; another had two sons captured. Nine of the 56 fought and died from wounds or hardships of the Revolutionary War.

They signed and they pledged their lives, their fortunes, and their sacred honor. What kind of men were they?

•    Twenty-four were lawyers and jurists. Eleven were merchants, nine were farmers and large plantation owners; men of means, well educated, but they signed the Declaration of Independence knowing full well that the penalty would be death if they were captured.

•    Carter Braxton of Virginia, a wealthy planter and trader, saw his ships swept from the seas by the British Navy. He sold his home and properties to pay his debts, and died in rags.

•    Thomas McKeam was so hounded by the British that he was forced to move his family almost constantly. He served in the Congress without pay, and his family was kept in hiding. His possessions were taken from him, and poverty was his reward.

•    Vandals or soldiers looted the properties of Dillery, Hall, Clymer, Walton, Gwinnett, Heyward, Ruttledge, and Middleton.

•    At the battle of Yorktown, Thomas Nelson, Jr., noted that the British General Cornwallis had taken over the Nelson home for his headquarters. He quietly urged General George Washington to open fire. The home was destroyed, and Nelson died bankrupt.

•    Francis Lewis had his home and properties destroyed. The enemy jailed his wife, and she died within a few months.

•    John Hart was driven from his wife’s bedside as she was dying. Their 13 children fled for their lives. His fields and his gristmill were laid to waste. For more than a year he lived in forests and caves, returning home to find his wife dead and his children vanished.

Freedom is never free.

Get Your Story Straight

From toxic bank assets to tampered-with pizzas, the contract of trust
between businesses and consumers has been severely damaged. Brands that don’t embody all the elements of engaging narrative will fail to thrive.

Get Your Story Straight

Article, June 29th 2009, Adweek

http://www.adweek.com/aw/content_display/community/columns/other-columns/e3ida6dda5bd97c1167e4c821607e618466

Dean@deancrutchfield.com

In every great movie, there are five constructs that can be applied to guide narrative-based brand strategies: Setting, Hero, Villain, Mission and Success. Successful brands are stories told well, so who better to turn to
than the best storytellers: Hollywood.

Misconduct by big brand names and shifting consumer behavior has changed the perceived value exchange between brands and consumers. This has created opportunities to hold different conversations with the consumer with new approaches that enable them to better connect with the brand. To optimize this new conversation, brands need to relinquish a degree of control to the consumer by adopting narrative-based brand and marketing that can impact multiple platforms to engage consumers. That will create brands
that are more magnanimous, malleable and functional.

Setting is key. The day after “Mission Accomplished” was proclaimed in May 2003, “two brown trucks” were reported approaching the Iraq border via Turkey: It was UNICEF delivering on their “Advance Humanity” promise. Now that’s a setting of a great narrative: UNICEF is always in first.

From toxic bank assets to tampered-with pizzas, the contract of trust between business and the consumer been seriously damaged. It’s time for marketers to generate more “earned media” with the deployment of brand narratives, non-traditional media and innovation playing a central role in the new two-way relationship with consumers.

As Noel Coward famously said, “Consider the public. Never fear it nor despise it. Coax it, charm it, interest it, stimulate it, shock it now and then if you must, make it laugh, make it cry, but above all never, never,
never bore the living hell out of it.”

Heroes and anti-Heroes must be called out. The cult of CEO as a “wealth-creating warrior king” has been eviscerated, but there are a few who are heralded as titans and heroes such as Apple’s Steve Jobs, Xerox’s Ann Mulcahey and anti-heroes like Warren Buffett who operate as leaders with determination, self reliance and a degree of success that is particularly notable.

These types of heroes enable narrative brand strategies that enamor the nation and, over time, we start to trust them. We do so because they all share traits we search for in our heroes: belief, optimism, courage and
preparation. The same traits can be found with rock stars like Bono and ordinary people like the remarkable singer, Susan Boyle of Britain’s Got Talent fame, who inspired us all with the optimism that anything is
possible. All brands need a hero.

So then who¹s the bad guy? Many brands suffer from a false sense of entitlement: they assume they have permission to play and end up groveling in a self-indulged pit of frivolous utility. All successful strategies are

destined to fail, but new victory conditions can be created by the presence of a villain. Starbucks’ brand is facing a chronic debilitating decline, so through BBDO it has launched an intelligent counter campaign to tell the brand’s “story” around fair trade beans and its healthcare for employees: The villain they’re pitted against is the price driven competition who care not for either. We’ll see if its army of twitterers follow the print ads, but the approach provides Starbucks with a much needed purpose for being.

Identifying a clear mission is crucial. Take the average corporation’s mission statement and turn it on its head, it doesn’t hold water. In today’s world littered with litigation, accusation, scandal and bankruptcy, whom do you trust? Thanks to the Internet, the over-reliance that perception is reality has been vitiated. The truth should not be whatever you get others to believe, it should be about consistency between word and deed.

Brand messaging is about who you are and what you stand for. Without non-financial goals your ship is rudderless. At one end of the spectrum, Johnson & Johnson is the fifth most profitable company in the Fortune 500 due in part to its strict adherence to its highly ethical mission statement established in 1943. At the other end of the spectrum we have Product (RED) that has reinvented the business model of philanthropy whilst focusing solely on its mission to eliminate AIDS in Africa.

Einstein proclaimed, “not everything that can be counted counts and not  everything that counts can be counted.”

Hitting targets is not a marker of success. Enabling your brand to inspire authentic community; now that’s true success. With a mission to save the world from poverty, Nobel Prize winner, Muhammad
Yunus, launched Grameen Bank in Pakistan three decades ago. The bank pioneered the concept of “micro-credit.” By focusing on the idea of solidarity lending, Grameen Bank has distributed $7 Billion, helped break
the cycle of debt for over 3.5 million members and has a loan recovery rate of over 95 percent.

These uncommon businesses share a common bond; they all shaped their brands to engage and enable people to be involved by providing consumers with a reason to participate: A story.