Oct. 13, 2021
Crisis Management - Preparing for Marketing’s Dark Day with Søren Friis Larsen
In episode 100, host Eric Dickmann interviews Søren Friis Larsen. Søren is an executive advisor, crisis management expert, and Founder and CEO of MindCream. His company offers high-value professional networking and business development opportunities for CxOs, BoDs, and senior professionals across a broad range of industries.
As an executive advisor specializing in communication and crisis management, Søren has been called upon countless times to offer advice on managing crises from global product recalls, cyber-attacks, regulatory entanglements, fraud, layoffs, medical malpractice, or false rumors in the press.
Today we discuss crisis management and how marketing can help organizations build credibility when a crisis strikes to build a reputational moat around their brand, PR, and marketing efforts.
For more information and access to the resources mentioned in this episode, visit:
https://fiveechelon.com/crisis-management-preparing-marketing-dark-day-s6ep19/
Send us your questions or comments
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WEBVTT
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Welcome to The Virtual CMO podcast.
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I'm your host, Eric Dickmann.
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In this podcast, we have conversations with marketing professionals who share the strategies, tactics, and mindset you can use to improve the effectiveness of your marketing activities and grow your business.
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Søren, welcome to The Virtual CMO podcast.
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I'm so glad you could join us today.
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Thank you so much for having me.
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I've been looking forward to this for a very long time.
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Yeah, same here.
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You know, we cover a lot of topics on this show and one of the things that always gets me really pumped up when I have a guest on the show is being able to cover something that we really haven't talked about in detail on the show.
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And that's what we're going to get a chance to do today.
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So I'm excited to have your expertise on the show to talk about crisis marketing.
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You know, all you need to do is open up the front page of the paper to see that there are crises going on all over the place.
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You know, we just got through the COVID pandemic.
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We've had Elon Musk and Tesla cars burning up in people's garages, we've got recalls on sunscreen, and we've got politicians that seem to be constantly in the hot seat.
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When you open up the pages you see crises happening everywhere that really need marketing help.
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Absolutely.
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I think it's an important topic for obvious reasons.
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And I think a lot of marketeers, they have a mindset that's inherently positive and optimistic.
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You know it's all about telling all of the good things about your company, your product.
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It's about your brand and promoting your amazing services and products.
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And you know, it kinda sucks that you then have to dealwith things going wrong, right?
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But it really can throw such a huge wrench into the best laid plans.
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You know, marketing to me, it's really about the long haul, about carefully putting out the right message that can persuade consumers and building brand, establishing trust, not just of the company, but also of your executives and your spokesperson.
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And overnight that can have a really, really bad day.
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And then you're tasked with responding with cleaning up and, and maybe, you know, that expensive budget of yours has almost been void because it's been ruined overnightSo I'm really, really focused on how can you be best prepared for that day for marketing?
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Like what can you actually do to be a little bit more prepared, a little bit more resilient.
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Because not necessarily if that's going to happen,
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But
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to happen?And it can really sneak up on you as your examples show.
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Well, it's interesting because the way you frame that, because when I think about marketing, marketing by and large is a positive exercise, right?
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We don't use a lot of negatives in marketing, we're trying to solve pains, we're trying to present our products and services in the best light.
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But especially in an era of social media, in an era where news journalists tend to write a lot of clickbait stories where they're trying to get you to look at something, the spin seems to be just the opposite, it seems to be very negative.
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So what are some of the things that you can do to start preparing for that day when goes wrong?
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Well, there are a lot of things you can do.
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And I think it starts with having a little bit of that mindset and saying it's not just about dealing with all the positives.
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We also have to consider what can we do and what happens if something goes wrong?
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And I think actually, the companies or the organizations that respond well to crisis, they also get some positives out of that.
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Because typically if you handle a negative situation, well you can almost come out with a stronger brand, right?
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Because that's when we look to companies to do the right thing.
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It's when they're tested, right?
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If something goes wrong and you respond well, you can almost boost your brand.
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But it takes being prepared and there is not one silver bullet that can prepare you there.
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There are many things to consider.
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It's really a matter of getting a lot of things right at the same time.
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preparation is key as in many other areas of life, of course.
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And it starts with the mindset of thinking, not just in best case outcomes, but also what happens if this goes wrong.
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It seems like with companies, you know, we see it all the time with product recalls, maybe there's contamination of food, and so somebody has to recall a bunch of meat or there's a product contamination.
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And it seems like there are companies that sort of go overboard.
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They over-correct because they want to maintain their reputation.
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And then we see coverups, and we see companies that are trying to hide that.
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The Diesel Scandal comes to mind with Volkswagen and some of the other manufacturers where they had a known problem and they tried to hide it.
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They paid a big price, right?
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Not only in terms of their reputation, but in terms of the money that they actually had to pay out at the end of it.
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Yeah.
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And that sort of balance is also difficult to strike, right?
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With the benefit of hindsight, you can always say, oh, they should have been, you know, maybe they went overboard.
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Maybe they were too cautious in some cases, but I think the golden adviice to air a little bit on the side of caution.
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Because a lot of these companies, especially if you're in a business where faith and trust in your product is right?
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Like pharmaceuticals and car safety, and so on, like that.
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It really is important too to recognize that, Okay.
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the trust forward in our company.
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That is what is most important for us.
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So maybe it's going to be costly in the short-term, but the long-term cost of destroying our reputation or diminishing trust in us as a company and our products, that is more But yeah, it's a balance and it's not easy to strike.
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So I'm curious, you've been in the hot seat, a number of places where they've had to go into crisis management mode.
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So what happens?
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You know, the CEO gets a call one day and finds out that there's some terrible defect in one of their products, and they're all over the news that morning.
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They've probably haven't prepared for it because as you said, many people don't really prepare for this dark day.
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So what are some of the early steps that companies take and need to take as they begin to sort of deal with a sudden unexpected crisis?
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Well, in companies' defense more and more have plans in place, more and more do things to prepare.
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So it's rare that they are completely unprepared, but yeah, there is a certain element of case, and I think some of the first steps you want to do is you want to make sure that you have the right people and the right resources around the table, having the right people in the bus before you start driving anywhere.
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That's key.
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And then I think a lot of organizations have a tendency to go straight into actionable, right?
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They make a lot of decisions, they feel they have to act, and be very, very swift and decide.
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Which is true to some extent, but I think a lot of people go into action mode straight away, and sometimes it really can be important just to take that very brief pause and say, okay, do we have the full picture of this?
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Have we considered work in this goal?
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Is this a worst case scenario?
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Where do we want to take this?
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What's actually the best possible outcome?And then sort of once you have that overview, once you have that slight strategic pause, then your actions will be that much more at the right solutions.
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There is no one size fits all.
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It all depends on the situation.
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But having the right people, having the right leadership, and sometimes this sneaks stuff a little bit on companies.
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I've been in live responses to big sort of cyber attacks that threatened to basically infiltrate their whole IT systems.
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And they still spend time discussing, should we really mobilize that crisis team?
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And we were like, yes, I think you should.
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But if you're not prepared, even the most trivial things can take time and that's the value of preparation.
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You can skip a lot of steps if you thought ahead.
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I always think of one of my favorite Naked Gun movies, where Officer Drebin is standing in front of a fireworks factory that's exploding, fireworks going everywhere, and he's telling the crowd nothing to see here, nothing to see here.
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And of course there was something to see there.
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And I think sometimes companies try to do that, right?
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They go into this very defensive posture where they say this isn't anything, no need to worry about it.
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I'm taking from what you're saying that that's not how you'd advise.
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You'd advise more of a measured approach where you'd take a step back and really try to analyze what's going on before going into denial.
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Yeah.
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So there's that one that you could say the naked gun approach, where you try to you know, talk the situation down and basically what you're trying to do is you're trying to enforce sort of a very positive situation view, oh you know, onto an audience who isn't really buying it,
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right And,
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and, and, you probably, and I think it's a case of you as a messenger,, you know?
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This is your wishful thinking, and this is the image that you wish would be you know, reality.
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And you're trying to project that the best you can.
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And that is not really the best strategy.
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What I think the strategy we see the most is the oyster approach, right?
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Where you clam shell and you try to sort of, you know, postpone saying much as long as possible, right?
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And then you don't get out in front of the issue, right?
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And it is a difficult choice when and what to say, right?
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Because you never have enough information.
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You always have to act on unlimited information and you never really know how things are going to play out.
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But typically, you know not communicating is also communicating, right?
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So if you're not out there, if you're not available, that sends a message in itself.
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So it pays off to have a strong spokesperson who even if he or she can't say much, you know, it'll still be a calm face on the organization.
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It will still be somebody who is empathetic to the situation, and somebody who can at least reassure that we are working best we can to solve this as quickly as possible.
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That goes a long way.
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Everybody has an understanding that you can't necessarily know all the facts right away.
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But still being out there is important.
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Well, I love the way you frame that because I do agree.
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Silence is an answer, right?
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you don't.
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Anything people can read into that or they fill in with their own narrative.
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Exactly.
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People will immediately start to fill in the gaps.
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And that goes outside your organization.
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But it also goes for inside your organization.
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A lot of crisis management also, or we need to control the media narrative and so on, but you have a lot of.
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employees, and they are also an important stakeholder.
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And you also need to keep them informed, because they're very interested in this situation and I've seen a lot of examples of company decides on the media strategy.
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And at certain point they say, Okay.
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we have no further comments.
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And then the journalist starts calling their employees in different parts of the company, and they weren't ever instructed on how to respond, and they're friendly and service-minded and so on.
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Vey far in accommodating the curious reporter and that doesn't, that doesn't work.
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Or maybe they'll, they'll write something on the company's Facebook page and you have a very service minded customer service agent sitting there ready with answers.
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And maybe they contradict slightly what you say, so your official channels, and then you've got the story, right?
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And keeping all of that orchestrated.
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It sounds easy, but it isn't.
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It's interesting the way you frame that too.
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Because I think in the old days, which weren't that long ago, but you had a comms person inside an organization, you had your public relations department for a larger company, right?
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And they were the spokespeople, the journalists would go there.
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They would get the official answers.
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They would respect that.
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Now we've got social media.
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Everybody is out there talking, expressing their opinions.
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You can't put a lid on that, you can't control it.
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There are just too many outlets for information much of it is not official information.
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Yeah.
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And you just have to assume that internal communication is your external communication and you have to assume that if the authorities know something, then you know, the media will be able to dig that up because there is no secrecy anywhere.
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Everything is pretty transparent and journalists are pretty good at what they do.
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Even if they work for some sleazy tabloid newspaper, assuming that they are actually good at what they do, because typically they are.
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You know it's interesting you've written about reputation and how reputation really needs to be treated as an asset.
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How do you view a company's reputation and how they should be viewing it in terms of other traditional assets that they may be more mindful.
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Yeah, I like that you bring that up.
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Because I think reputation, in many people's.
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mindset.
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And if you do an MBA or whatever, like I've done it.
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It's sort of an overlooked asset, right?
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Yes, sure you can have goodwill and you can treat that, and you recognize it, but the people don't really know what to do with it.
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And it becomes sort of this, we suit your category.
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But really, if we think about a company's reputation, like any other asset, It's clear how important it becomes, right?
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If you run a trucking company, you know that you have a huge number of assets in your trucks, and you would never run that business without ensuring that those trucks are insured and you have a plan if it breaks down, then what happens, and you set aside money for maintenance and repairs to keep that asset intact and to protect the integrity of that asset.
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You need to think the same way about your reputation.
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You need to set aside money and time, and effort, and planning to safeguard and to maintain that asset.
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It doesn't happen by itself.
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And here marketing, I think plays a huge role in building this reputation, but also in creating the moats and the defenses around this asset.
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And to plan for what happened if this asset is under siege.
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If there is a flat tire on your reputation asset.
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And when I say that you need to treat your reputation as any other asset.
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It's actually maybe a little bit inaccurate because it's a more complicated asset for several reasons.
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Because this asset interacts with other assets.
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So if you have, like you mentioned, a product recall, or you need to recall your sunscreen because there is suspicion on some of the ingredients, the chemicals in the sunscreen.
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Yeah.
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That's about your product and you know, you can deal with the technical aspects of that.
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But it impacts your reputation, right?
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If you take a big financial loss and you're accused of being incompetent, it's not just your pride that's on the line or value of the company.
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It meshes in with your reputation.
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So it's hard to sort of isolate and deal with in isolation,
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Yeah.
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You can't just decide, I want to upgrade my reputation or if a truck breaks down, you buy a new one, and you take the loss and your balance sheet, but you can't do that with your reputation right?
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It's not something that's quick to fix because it's mixed up with all of your other operations.
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And then it's sticky, right?
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It's sticky in the sense that if you take one hit to your reputation, all right, yeah, they missed the mark on that one.
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if you do it again, then, okay, am I starting to see a pattern here?
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And then it becomes a self perpetuating thing.
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So you know, the bad stories, the impact you take to your reputation, they stick, right?
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If a truck breaks down and you repair it, you move on and it can break down again or it can go on, but it's not really impacted necessarily by that.
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The reputation, it's a sticky asset in that sense.
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But yes, you should invest in it and you should treat it like any other asset class on your list of priorities and in your budget.
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Hey, it's Eric here and we'll be right back to the podcast.
00:17:58.638 --> 00:18:03.499
But first, are you ready to grow, scale, and take your marketing to the next level?
00:18:03.709 --> 00:18:10.068
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00:18:40.668 --> 00:18:41.929
Now back to the podcast.
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One thing that I see happening.
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So often you know, many listeners to this podcast are small and medium-sized businesses.
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They may never have to face a nationwide recall of a product or service, something that levels or gets up to the level of being on the front page of the paper.
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But they still have reputations that they have to manage.
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And I see it happening over and over again, where you go to a review site, like a Yelp or a Google My Business, and you can see people leaving reviews for a company, and you will see bad review after bad review, but no response.
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And while that may be for a smaller business and not to the scale of a true crisis, it is a crisis for that small business, because now that reputation is being slowly eroded away.
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And if there are enough negative reviews there, eventually people are going to get the feeling that this isn't the kind of business that they want to do business with.
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And so, I'm curious to get your thoughts on that, you know, for some of these smaller businesses.
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Yeah.
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And you have a good point, right?
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Because crisis, you know what defines a crisis?
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We all see the big catastrophe where everything blows up or somebody puts a ransomware into your systems and you can't access your computer.
00:20:00.545 --> 00:20:03.634
Everybody can see that that's a big, hairy crisis, right?
00:20:03.634 --> 00:20:07.769
But what about the slow drop of the eroding reputation that you're talking about?
00:20:08.170 --> 00:20:18.420
That surmounts to a crisis when it gets so severe that you start losing new customers, and that'll happen quite quickly because yeah, people do read those reviews.
00:20:18.900 --> 00:20:33.539
so part of investing in your reputation or the reputation management costs, or their main maintenance costs is you know, having your tentacles out there and listening into what are people actually saying on the company.
00:20:33.539 --> 00:21:05.359
And luckily many companies do that, but it takes resources and it takes a continuous effort to pick up on the essence of these complaints, respond to those as you feel you can respond meaningfully to, and, and it's a lot of work, but it's sort of important even if it's sort of a slow drip of reputational scratches in the surface of your company, it will amount to a significant debt once it gathers momentum.
00:21:05.609 --> 00:21:07.349
And it's a good example of the stickiness, right?
00:21:07.349 --> 00:21:12.690
Because if you go in and you want to write a review, you see everybody else and you say, oh yeah.
00:21:12.930 --> 00:21:13.980
actually I agree with that.
00:21:14.039 --> 00:21:15.389
I didn't like that aspect.
00:21:15.389 --> 00:21:17.099
I'm going to put that in my review as well.
00:21:17.099 --> 00:21:20.089
And it spills over, so yeah.
00:21:20.454 --> 00:21:22.285
Well, I love the analogy of a slow drip, you know?
00:21:22.285 --> 00:21:24.625
Just like a water leak in your house or something like that.
00:21:24.625 --> 00:21:29.095
You might not really notice it right away, but over time it does a tremendous amount of damage.
00:21:29.095 --> 00:21:31.075
So I think that's really a great analogy.
00:21:31.900 --> 00:21:32.079
Yeah.
00:21:32.079 --> 00:21:44.589
The longer you wait, the more expensive the repair is going to be and the longer time it's going to take, and the more you're going to have to enjoy cold showers in that dingy basement bathroom that you have as a backup, right?
00:21:44.829 --> 00:21:45.879
So nobody wants that.
00:21:45.879 --> 00:21:49.690
But again, you know, you need to identify the problem and you need to address it.
00:21:49.690 --> 00:21:52.299
And that's not always easy.
00:21:53.275 --> 00:22:07.914
I'm curious from your own personal experience about crises that you've been pulled into or things that you've seen in the news recently or from the past, examples that you can cite that you said this was really a poor response to our crisis?
00:22:07.914 --> 00:22:14.514
That there were some obvious things that could have been done much better, and then ones that you think have been handled very well.
00:22:14.514 --> 00:22:15.754
Does anything come to mind?
00:22:17.394 --> 00:22:24.204
Well, I think it's always hard to sort of look in the newspaper and second guess the crisis response.
00:22:24.204 --> 00:22:33.845
Because sometimes or most often there is a good reason why people don't necessarily come out looking like they're amazing at what they do, right?
00:22:33.845 --> 00:22:37.234
The media, they do have an interest as you said earlier, right?
00:22:37.234 --> 00:22:39.254
They love when things go wrong, right?.
00:22:39.625 --> 00:22:48.244
So there are many, many examples of things that are not handled in the right way, but it's also hard to sort of second guess as an outsider.
00:22:48.474 --> 00:22:54.414
But yeah, we do see a lot of bad crisis management.
00:22:54.414 --> 00:23:04.494
And I think oftentimes, it's the lack of preparation, it's the psychology, it can be hard to sort of bite the bullet and admit that you're wrong.
00:23:04.525 --> 00:23:11.930
I think some of the most difficult crisis are the ones that involve the personal integrity of the executive, right?
00:23:12.160 --> 00:23:18.599
It's easy to go out and apologize for something that went wrong in a service interaction.
00:23:18.629 --> 00:23:28.079
But if it's you who is accused as the CEO or the executive of the company for wrongdoings or for sleeping on the job, it's hard.
00:23:28.160 --> 00:23:39.559
It's just harder to go out and your own personal fears get in the way of you have that sort of clarity of mind saying, okay, we need to address this.
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