The management at Barclay’s must be asking, “If only we had done some serious crisis planning.” Last Friday the global banking giant was fined £290 million for its role in fixing LIBOR; that is the rate at which large, UK-based banks can borrow capital from other lending institutions on the London money market. Then the global banking giant lost its CEO, Bob Diamond, due to the rate fixing scandal. Now there are calls for a full judicial inquiry. Not necessary, says PM David Cameron. Perhaps, but the return to grace for Barclays now looks an awfully long way off.
The bank let an issue get out of hand and spread from a narrow and definable set of stakeholders (the financial regulator and the ratings agencies) to one where everybody felt aggrieved. The government had to step in and act (and be seen to be acting).
The bank set itself up to lose the PR battle. Nobody heard from Barclays for days, until Bob Diamond’s appearance, despite some serious attempts to enter the debate, as Diamond himself was at pains to point out. Instead Barclays’ critics have dominated.
There are three challenges to consider when dealing with such a crisis today:
- Contracting time frames: Information moves so much faster now that even media that were once cutting-edge, such as 24 hour news channels lose out to information posted on Twitter by Mr. Nobody.
- Greater exposure: The networked, digital world that we inhabit gives voice to those Mr Nobody critics who never had the means to voice their opinion. Everybody can be Somebody now.
- Siloed information: As organizations become increasingly complex, it is becoming more difficult for the relevant people to acquire the pertinent information on time. Reliable lines of internal communication are essential in order for the company to be able to articulate its side of the story. It seems that as the information flow outside corporations becomes more nimble, inside it becomes clumsier. Avoiding the crisis at all never looked like a more attractive option than managing it.
What can Communications do to prevent another Barclays, or at least to abate it, if it becomes impossible to avoid?
The CEC’s latest work on Managing Corporate Crises provides some guidance in three areas:
Relying on top-down messages (those emails from the CEO’s office that you open, you might read, but you never really act on) will not work. Instead communications needs to help the management to engage employees to be active participants in risk management. Take a look at Caterpillar’s way of enabling managers to discuss potential safety concerns with employees, not just to talk, but in way which makes leaders accountable for coming up with solutions that prevent accidents.
If employees appreciate the risk of a potential crisis, they will be more likely to escalate it to management so TD Bank has issued these clear guidelines to help employees to spot and report a problem. Clearly understanding the Code of Conduct and how it relates to employees’ day to day job can deter risky behaviour – unfortunately, many codes of conduct are clunky and hard to understand. Avery Dennison redesigns its Code to make it more interactive, and empowering for employees.
The relentless 24 hour news cycle of today is a beast that needs to be fed. Stop feeding it and your critics will gladly step in. So here are 2 principles to follow when managing the crisis:
- Communicate quickly and regularly: Don’t wait for every detail or else you will lose momentum and your critics steal the show
- Know what to respond to and when to keep quiet: Follow the CEC’s guidelines to see how you can effectively communicate about challenging issues.
CEC Related Resources:
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