Archive for October 4th, 2006

Wal-Mart’s PR challenges

October 4, 2006

One of the most fascinating crisis management case studies going on is Wal-Mart. Yes, I think Wal-Mart is in crisis, in deep crisis. There are many facets–we love success stories until they become too much of a success. Wal-Mart does destroy many loved and valued local businesses. They are ruthless if legal in the pressure they apply to suppliers. They are not known for high pay and wages. They have stumbled in some of their PR efforts–such as the Andrew Young fiasco. And now, biggest of all, is that they have become a political lightning rod and football (mixing my analogies). That is something no business wants to have happen.

That’s why I find this article from Advertising Age so fascinating. For several reasons. Leslie Dach is heading up Wal-Mart’s PR battle. He’s a former top-level Democratic strategist. He is having to defend his decision to help Wal-Mart against fellow Democrats who want to politicize this situation. Perhaps most interesting is that Dach holds a position at the top level of Wal-Mart. It is what most senior communication managers want but seldom get. Perhaps you have to recognize, as Wal-Mart definitely now does, that the public franchise, or their public license to operate, is one of the most critical aspects of their future.

Good luck, Mr Dach, and I’ll be eagerly watching how you deal with your challenges–particularly those coming from your former friends.


The worst type of crisis to manage

October 4, 2006

What’s the worst? Smoldering crises. This term I borrowed from the Institute for Crisis Management. According to their annual study of business crises, smoldering crises are the most common type. Something like 75% of crises fit into this category. What is a smoldering crisis? A problem or an issue that is not a full blown crisis event but has the potential for bursting into a real problem. And because it sits in the background and smolders, it is usually not dealt with.

Speaker Hastert’s problem is a perfect example, at least as far as I can tell from the news reports. He apparently was told, perhaps in an offhand way, about a potential problem with Congressman Foley. Something about an inappropriate email. I’m sure he was busy. And as he explained, it was likely mentioned in passing while dealing with a lot of other things. Things more urgent at the time. So it was not dealt with. There was only just a wisp of smoke–certainly no fire.

The ironic thing about this event and other smoldering crises is that it looks pretty stupid if you over react. That is what people need to remember now. Lots of emails can be subject to interpretation. In the light of hindsight, when true motives are revealed, what could be seen as innocent is no longer innocent. But to make a huge deal out of something that is very much disputable leaves one open to accusations ranging from over reaction to paranoia. So it is not easy to determine what wisps of smoke will erupt into flames.

What Hastert needs to do is carefully explain what he knew and didn’t know and why he chose the path he did at that point. Then, other than those seeking political gain, need to put themselves in those shoes and ask what you would do if you were in that position.

The real lesson though is for organization leaders who right now are smelling smoke. You know the smoldering crises in your organization. Chances are there are one or several that have the strong potential for erupting into serious flames. Deal with them now. Take the time to evaluate. Understand the risks and how to manage if they do erupt. But such crises are usually avoidable. Do what you can to avoid them by taking them head on at the earliest possible stage. Then you can avoid the pain and cost of a full blown crisis.