Drill, baby, drill (your crisis response, that is)2012-03-21
Of all the many dimensions to a company’s response to a crisis, none is more important than adhering to the company’s published values. You know what I’m talking about, right? They get posted in frames on corridor walls. They emblazon the backs of employee security badges. They are enshrined on dedicated intranet and website pages. They are trumpeted at new-hire orientations. They are reiterated at town hall meetings.
Peruse a few corporate values statements selected randomly from the “About” sections of their websites and you’ll detect common threads:
At IBM, according to the website, “IBMers value dedication to every client’s success;
innovation that matters, for our company and for the world; trust and personal responsibility in all relationships.”
Ernst & Young says they are “People who demonstrate integrity, respect, and teaming;
people with energy, enthusiasm, and the courage to lead; people who build relationships based on doing the right thing.”
Wells Fargo provides detail on its five primary values: people, ethics, “what’s right for customers,” diversity and leadership.
Campbell Soup strives to “create a high performance culture that lives our values.” These include character (inspiring trust, acting with integrity and taking personal responsibility and driving our future with optimism).
Using my definition of a crisis as an unanticipated event that threatens the organization’s reputation (if you can prepare for it, after all, it’s not a crisis, right?), you can expect that many unprepared leaders coping with the situation will feel like they have descended into a world of utter chaos. There are no manuals to pull of the shelf that will tell you what to do, no prescribed steps to follow, no formulas to apply.
When a crisis hits, because it’s both unexpected and a threat, unprepared leaders tend to get defensive, hunker down, and make knee-jerk decisions. All those lofty statements about the company’s values centering on doing the right thing, building trust, behaving with integrity, taking responsibility and behaving ethically are at risk of being shoved aside as the feral look in executives’ eyes screams, “Ohmygod ohmygod ohmygod what do we do?”
Inevitably, the direction in which those knees jerk is toward protecting sales. If sales plummet, investors might sell off their holdings and the company’s value might take a hit. We can’t have that.
The problem is, worrying about investors means dismissing the values by which leadership has proclaimed the company lives and on which it bases its decisions.
Free speech protections don’t exist for speech that we don’t mind. They exist for those times we encounter speech we find offensive. Similarly, companies don’t need to invoke their values when things are going along swimmingly; the values reflect inherent beliefs shared among the company’s leaders and employees. Published values statements exist for those times when the company faces challenges to those values.
When that crisis occurs, though, few leaders will take a deep breath and say to each other, “As we address this shitstorm, we need to remember our values.”
That’s why the most important element of any crisis preparedness plan is the drill. At least once each quarter, without warning, leaders need to be presented with a crisis scenario. With the clock ticking, they need to simulate their response. The whole point is to ensure they get in the habit of ensuring their responses are consistent with their values. The more they practice applying values to a crisis situation, the more likely they are to apply them when they come face-to-face with the real deal.
It was Johnson & Johnson’s credo—which put patients/customers first—that resulted in its famous decision to pull Tylenol from store shelves nationwide and not just in Chicagoland, where the product tampering incidents occurred. By adhering to that value, J&J was able to re-introduce Tylenol with the newly-innovated safety seal, which attracted not only its previous customers but customers of competing brands, ultimately creating even greater financial value for its investors.
The op-ed by departing Goldman Sachs exec Greg Smith qualifies as a crisis. Nobody saw it coming. It’s not likely that “a high-ranking employee publishing a scathing indictment of the company’s behavior in a national publication of high repute” is among the situations for which the company has mapped out its step-by-step response. The number one statement on the company’s list of principles reads, “Our clients’ interests always come first.”
The company’s response has largely been silence, almost as if its leaders are a group of deer caught in the headlights of an oncoming convoy of semis.
Writing for AdAge, Jonathan Salem Baskin suggests Goldman Sachs’ best response is to keep its collective mouth shut. “Goldman has done next to nothing,” he writes, adding, “I think it’s the right call.” To me, an implied or explicit “no comment” is the same as “we’re guilty,” at least as far as public perception is concerned. And it’s entirely inconsistent with its published values. (There has been plenty of advice offered on what Goldman Sachs should have done, but that’s not the point of this post.)
Among the potential long-term devaluation of the company based on behaviors that contradict its values is the transformation of the workforce from engaged to cynical. I remember conducting focus groups during an internal communications audit for a company whose values were printed on the back of employees’ security badges. When I asked about them, you could cut the cynicism with a knife. I was told that an executive had just been promoted to a coveted position based on having blown away his numbers, despite that he achieved his success by systematically violating every single one of the company’s values. “There’s what’s printed on the backs of these badges,” I was told, “and there’s what will actually help us get ahead.”
Imagine how employees must feel when they see a company reacting to a crisis by violating the values the company has invested time and resources communicating: betrayed, disengaged, disenchanted. It must be hard, really hard, for employees to defend their employer to their friends and colleagues when they feel humiliated even to be associated with the company.
Who would want to work for such a company?
It’s shocking, the tiny percentage of companies that conduct crisis drills. For one day each quarter, the payoff can produce value in the millions of dollars, ensure continued employee commitment and engagement, keep the best recruits applying for jobs and inspire shareholder confidence. When it comes to crisis preparation, I can only echo the politically-charged words of those who want more oil production from off-limits parcels of land:
Drill, baby, drill.