Managing Uncertainty Podcast - Episode #48: Reputational Grab Bag

In this week’s episode of the Managing Uncertainty Podcast, Bryghtpath Principal & CEO discusses a number of reputation management and crisis communications topics that arose during a recent day he spent at the Carlson School of Management, part of the University of Minnesota.

Topics discussed during this episode include the Boeing 737-MAX crisis, the Starbucks crisis in Philadelphia some time ago, and personalities and leadership skills for reputation management, crisis management & communication leaders.

Episode Transcript

Hello and welcome to the Managing Uncertainty Podcast. I’m Bryan Strawser, principal and CEO at Bryghtpath. And what I would like to talk about in this week’s episode is a series of questions that I was asked this past weekend. Some of you might know from looking at my bio I’m an alumni of the Carlson School of Management at the University of Minnesota where I earned my MBA in 2014. and this past weekend I was invited to come back to the university and serve as a judge along with a faculty member for students’ final projects in the executive MBA program. Ironically, it was five years to the day since I had done the exact same thing there at the Carlson School presenting on my final project along with a five of my fellow classmates from Minnesota, Vienna, and China. But I had a chance to talk with several students over lunch, and of course when we talk about what I do for a living, people are always totally fascinated by this idea of crisis management and business continuity, crisis communications.

And so, I got three interesting questions and I thought that it would be fun to kind of riff on these a little bit for a podcast episode. So here it goes. The first question that I got was about the Boeing 737 Max issues that the Boeing organization has been faced with following their recent crash, two crashes, of that aircraft. And a lot of commentary in the public sphere in the media about how Boeing got the aircraft approved, about the level of government oversight of that development and flight certification, about potential software issues with the aircraft, and how Boeing has been managing all of this reputationally. And the question that it was asked kind of along the lines of what did I think about the timing of this situation in terms of just how quickly or not quickly that the story got out and how Boeing responded to those questions.

And really the question was about how quickly do you have to respond in a reputational crisis, and then kind of apply that to Boeing? And my answer was a little complicated. First I think that there’s a, you have a very brief period of grace following something happening that impacts your organization reputationally that before you need to get out and address it head on in a very clear statement or a narrative about what your organization’s response is to these allegations, or this potential issue, or the reputational crisis that’s your faced with. If you don’t react during that time, if you don’t act in time so to speak, then your opportunity to influence the story, your opportunity to get your own spin on the story out in public is gone, and it will be taken over very quickly by the news cycle, by social media, by all of the different forces that come into play in a reputational challenge that an organization might face.

So from a timing standpoint, I argued in this kind of lunch discussion that timing is very important and that we should be reacting quickly as facts are known and you can start to tell the story about what happened. I also mentioned that I think that there’s a level of forgiveness I think to an organization that comes out and addresses the issue head on. That you can come out and say, look, we were wrong, or hey, we screwed up and here’s what we’re going to do to fix it. Or you can also say that in like the 737 Max situation that you could say something along the lines of, look, it’s a very complicated commercial, building commercial, designing and building commercial aircraft is a very complicated business and we don’t yet know the full set of facts, but we’re cooperating with the government agencies, and regulators, and others and that we will conduct an independent investigation so that we can get to the bottom of what happened and ensure that our planes remain safe and et cetera, et cetera.

So there’s a lot of ways to kind of take the story, but the timing question I thought was a very insightful one and one that I think is important to understand that any reputational crisis such as what Boeing has faced with the 737 Max, that you have to move on that quickly. You cannot just let the story linger without telling the organization side of the story. This then led to an interesting conversation about Starbucks. One of the MBA students who works for a large fortune 50 organization here in the twin cities asked me about Starbucks’ challenges that they had had in the city of Philadelphia sometime ago, sometime ago now. And if you remember, what happened in the Starbucks situation is that there were two African American men who came into a Philadelphia City Starbucks store. They were there for a business meeting. They asked to use, one of them asked to use the restroom, and the manager on duty said, well, the restrooms are only for customers. There was some back and forth that happened and the next thing you know that the Starbucks manager has called law enforcement and reported these men for trespassing. And when the police arrived there were some more back and forth in the two men wound up arrested.

Then immediately after this, or within a short period after this as the story kind of blew up on social media and in the media, the Philadelphia police chief had a press conference where he kind of threw some kerosene on the fire, through some gas on the fire and said that his officers didn’t do anything wrong and that the men had caused the issue and kind of really the whole issue kind of blew up. Starbucks had a very effective response. Once they identified that this issue was going on, they had an immediate statement from the CEO, and the CEO’s immediate statement was, we are investigating the issue. We are working to make it right. We’re investigating the issue and we are working to make it right. And then as they conducted their investigation, a very rapid investigation to determine the facts, the CEO came back out with a release and issued an apology and announced a new policy. The policy was, all are welcome in our stores, whether they make a purchase or not. Immediately announced a new policy. All are welcome in our stores, whether they make a purchase or not. And then they announced that all 8,000 stores in the United States, 175,000 employees would close for a day and all of their employees would go through training on unconscious bias and related topics.

And then Kevin Johnson, the Starbucks’ CEO, went out to Philadelphia and personally apologized, and also influenced the Philadelphia police chief who then released a video statement acknowledging that he’d escalated the situation, that it was wrong for him to say that officers didn’t do anything wrong. So when I was asked about the Starbucks situation at the University of Minnesota this weekend, I said, look, I use Starbucks as an example of this is how you want to respond in a reputational crisis where your company was in the wrong. And I don’t think you’re exposing yourself to more legal liability. I don’t think you’re kind of dancing around the issue of who’s at fault. Starbucks came out and said, we’re investigating the issue and we’re working to make it right. They issued an apology and announced the new policy. They conducted training and they made a personal apology to the two men in question in this particular case. I thought it was a textbook example of how to approach this correctly. In doing so, I think they enhanced their reputation and I think that they did a great job of salvaging what could have been a really difficult situation for them.

The third question I got and the last one that we’ll talk about here was just about what kind of person goes into crisis management, like what’s the personality makeup of someone? And I just really focused on one thing and that was, if you’re going to lead your organization through a crisis as a business leader or as a a subject matter expert for crisis management, that it’s important to have people who have strong emotional intelligence, strong EI. And of course I’m talking about the famous books, I think they’re on version two now, of this idea of emotional intelligence, which I think of in the case of crisis management is really about this degree of level headedness about being able to be in the moment of significant uncertainty, and stress, and turmoil, and perhaps, you could be dealing with some really difficult situations from facility collapses, to natural disasters, to an active shooter incident.

But being okay being in the middle of that and being in a type of calmness as you work to lead the team through that, it doesn’t mean that you’re immune from the emotional turmoil that happens, it means that you’re able to deal with it later. And your focus during the incident is on the role. It’s about facilitating the best response for your organization. It’s about making sure that your team, that your teammates, as I like to say, are safe, and that you’re able to project that kind of aura of calmness and confidence in the process as you’re working through the crisis. That’s how I’ve led as a crisis leader. I think that’s an important characteristic for an executive that is leading their organization through a really difficult moment is to have that level headedness, that emotional intelligence, to me is really at the top of my list of factors that I’m looking for along with people who communicate well and who are comfortable making decisions, who are comfortable pushing people kind of proactively throughout the situation. Those are the folks that I think make the best of crisis leaders, and that’s how I answered the question at the University of Minnesota this weekend.

That’s it for this edition of the Managing Uncertainty Podcast. Tune in next week for our next episode, and don’t forget that every Thursday at 12:00 PM central time, we’re on Facebook live on our Bryghtpath live show talking about crisis management, business continuity, and crisis communications. Have a great week.