How to handle a brand crisis when individuals publicly crash and burn
17th June 2013
Learning from the IPL and iGate crisis
That India is a personality driven market is well-known. Earlier this month, the return of N. R. Narayana Murthy to the leadership of Infosys along with his son only emphasised this fact.
Recent events around the spot fixing scandal beginning with the arrest of S Sreesanth and two other cricketers, the turmoil around the stepping aside of N. Srinivasan from BCCI after the arrest of his son-in-law, the questioning and suspension of Raj Kundra, co-owner of Rajasthan Royals; and the firing of Phaneesh Murthy from tech firm iGate (and the class action suit filed against iGate) reveals the PR challenges for brands when individual behaviour comes into play in a personality driven culture.
Separating individual behaviour from their brands: How did iGate and IPL behave?
Says Nitin Mantri, CEO and Business Partner at Avian Media; “Though individuals were under the scanner in both cases, the crisis came as a major jolt to the bigger brands they belonged to and stirred every concerned stakeholder.”
Adds Mantri, “In my view, the IPL scandal spread faster than the authorities could have anticipated or put a check on it. But still I think given the amount of stakeholders involved in this premium tournament, the crisis could have been handled well as the International audience, players, media and public at large saw the IPL brand take a huge hit. There was a lack of decisive action and also many voices saying different messages."
A senior in-house communications lead at one of the biggest MNCs in the world says, "In the unfortunate circumstances such as these, when the behaviour of the personality does not match the values of a brand or company, the best way is to clarify that the brand/company does not endorse such behaviour. However, in doing so, brands and companies have to be careful not to state anything that may affect an on-going investigation. If the person in question has denied the charges, the brand or company should take into account his/her point of view while making its own stance clear.”
Monitoring the situation
BCCI's initial poor response to the scandal escalated the issue, peaking with the public spectacle of N Srinivasan’s refusal to quit, made it a running lead story with television, print media and social media. Even the recent “ Operation Clean Up” by BCCI, though a first step in declaring a plan to address issues, has been criticised for not addressing key issues such as strategic time outs and the more fundamental issue of a transparent look into the financial backgrounds of BCCI members. In a situation, where media interest is very high in a story, brands need to put in speedy monitoring tools to assess who the key influencers are, what the sentiment is and which channels the talk is coming from.
Liz Hardy, Marketing Executive of Odimax Limited, says “When a crisis hits a brand, it can be tempting to go into social lockdown, keeping communications to a minimum and hoping that the storm will blow over. However, in the social media world, bad news travels fast, and ignoring a spell of bad press is likely to exacerbate the problem, rather than make it go away." Odimax, which also works with agencies such as Perfect Relations, uses a crisis Monitoring and Management facility to alert users of an arising crisis at the earliest possible opportunity.
Hardy recommends “Using your listening tool to monitor conversations, gauge reception, and to manage communications with your audience. An effective listening solution will help you keep up to date with how the situation is developing and evolving, and enable you to jump into the conversation where appropriate.”
The senior communications lead points out that, “Multiple levels of monitoring of media and social media are important. It is also important to monitor the mood among key stakeholders especially the investors and shareholders.”
Social media response to IPL and Phaneesh Murthy
A quick look at the way social media reacted to the IPL crisis, in the last few days of May shows a tag cloud offering quick cues into what matters within IPL. This shows Srinivasan emerging( at the peak of his stepping aside drama) as the biggest talking points with fans as one of the smallest talking points.
Tag cloud for IPL
Source : Odimax Limited
It’s interesting that one of the biggest stakeholders for IPL, the cricket fan, does not figure as a major talking point.
A look at the main influencers for IPL around the spot fixing sandal on social media demonstrates that traditional media still dominates as a top influencer, with NDTV topping the list of influencers, with newspapers and magazines, such as Hindustan Times, Indian Express, India Today and DNA making up the rest of the top five list.
Where Phaneesh Murthy is concerned, interestingly the top influencers were individuals and not media organisations.
Top influencers for Phaneesh Murthy
Source: Odimax Limited
Such assessments matter says Liz Hardy; “In an increasingly connected world, brands should make sure they have a crisis management strategy and communications process in place in case of a crisis. Identify key members of staff who can be authorised and trusted to communicate on behalf of the brand should a spell of bad press arise. Be aware of who the key influencers in your industry are, be they members of the press or public, and who your biggest brand advocates are. These individuals could be vital to amplifying your side of the story and your communications.”
Managing the crisis: remedial Action
Once the listening tools are in place, experts recommend several quick steps in managing the crisis.
Liz Hardy points out that, “In times of crisis it is essential that brands are open and communicative with their audience. An early apology and named contact for a crisis can go a long way to increasing people’s respect for a brand, as seen in the case of KitchenAid, when an employee tweeted an inappropriate comment to the President of the USA.“
In the wake of both the iGate and IPL crisis, neither brand has offered a strong apology to the stakeholders. iGate for example, has not clarified its judgement in choosing to hire a person with a chequered personal history to lead a million dollar business.
Says Nitin Mantri, “In some cases the brands need to accept the fault and come up with a positive messaging. This helps retain the corporate image and keeps customer satisfaction at check. Another way of looking at a crisis is to view it as an opportunity to learn and do better in future. For example, after the worm contamination incident, Cadbury changed the packaging of its chocolate slabs to incorporate stronger, insect proof foil. This proactive method of handling a crisis paid off and the company emerged stronger from the situation. However, in some cases it best to be silent for a while and then come back with a positive announcement. That gives a company ample time to think upon the best possible actions and execute it to the core. The BCCI for example needs to introduce strong anti-corruption measures and not just lip service.”
While BCCI has taken initial steps by announcing “Operation Clean-up”, it has been slammed by critics as a slow and very small first step.
Says the in-house communication lead with an MNC in India, “In the case of IPL, the investors, the franchisee, the government, the spectators all need to be reassured that IPL is doing everything possible to clean up the tournament. Clear remedial action must be taken, cases filed against those guilty and the action taken should be clearly communicated to the stakeholders.”
Mantri describes a typical crisis management team as one that “Is ably led by a team leader whose key responsibility is to react immediately to warning signals of crisis before it is big and execute relevant plans to overcome emergency situations. The team leader has a core team that consists of heads of all the concerned departments, media advisor team, Chief Executive officer, Managing Director and representative of Human Resource.”
Written by Paarul Chand