In today’s digital world, ignoring the power and influence of word-of-mouth — particularly when things go wrong — is hardly an option. It was also the topic of an education session at CCCA’s National Conference held in Calgary last April.
“Twenty years ago, a crisis could happen, and frankly, not many people would be aware of it,” said Jason Hatcher, managing principal at Navigator Ltd., a communications firm. “Events would appear in the next day's news and would not change until the following day's news cycle. The same content was used in the morning papers that then drove the evening telecasts, and this gave companies and individuals time to develop a calculated response. If they were smart, they would do this on the advice of legal counsel.”
That was then, this is now. According to the speakers, 90% of people today get their news from the internet, and 43% receive it from social media platforms — a figure that is higher among younger demographic groups.
And it is not just the big headlines that require close attention. A minor client complaint broadcast on Twitter or Facebook could go viral and badly harm a company’s reputation.
This presents a major challenge to lawyers, according to Hatcher, as they struggle to reconcile how to balance the legal risks for a company with its public reputation risk: “The world of information will not wait for a measured response regardless of your client's risk tolerance and approach to disclosure.”
This was precisely the dilemma facing Deborah Morshead, senior vice-president and legal counsel at Loblaw Companies Ltd. in December 2012 when the grocery giant was caught up in litigation involving a frozen yogurt company that was suing it for $20 million. YoPRO, a family business co-founded by Amanda House and husband Chris Delaney, was alleging that Loblaw had erred in not properly showcasing its products in stores, thereby causing losses in sales.
House posted a YouTube video making an emotional plea for help to Loblaw’s executive chairman Galen Weston Jr., even going so far as to suggest that the stress surrounding the legal dispute had caused her husband to collapse and be taken to hospital. The clip went viral, receiving over 200,000 views, and Loblaw found itself in the middle of a PR crisis.
“We had not, at this point, actually solidified our social media policy,” Morshead told session attendees.
Complicating matters, lawyers are generally uncomfortable with acting swiftly when lacking information. “Our response always is to not to say too much and we are trained not to speak when we don't have all the facts,” said Morshead. “And that's something that we actually need to change in this day and age, especially when it becomes this common in social media context.”
In the end, Loblaw did move quickly. Four days after House published her YouTube video, Weston met with Amanda House to talk. The company received high marks for handling the situation effectively and with tact even though little could be said given the pending litigation.
House posted a second video in January 2013 alleging that Loblaw had deliberately destroyed sensitive emails between the parties. However, by then, interest in the story had died down — with the exception of some persistent bloggers who raised concerns about what they considered holes in House’s story.
Before long though, Loblaw faced an even greater PR threat. In April 2013, a garment factory collapsed in Bangladesh, killing 1,129 and injuring thousands of others. Loblaw had been sourcing clothing from the Rana Plaza factories for its Joe Fresh line. Media — especially social media — coverage of the event was extensive, with hundreds of thousands of people on Twitter forwarding pictures of Joe Fresh’s garment tag in the rubble.
Loblaw got in front of the story quickly. Weston was once again the face of the organization, stating that the company would investigate the matter carefully and produce a compensation plan for the victims, the details of which would be revealed a few months later.
The key lesson according to Morshead? “We have to embrace social media. That's very difficult for lawyers because that means loss of control to a large degree. Also, you have to act quickly but you can't overreact. As lawyers we really need to have an understanding of the social media world in order to advise in this area, especially when the matter is actually in litigation.”
When it comes to managing reputations in the digital age, there really are no easy answers, as crises tend to be unpredictable. Still, the key is to know how to act quickly. Being prepared can save a company from permanent damage.
“Every organization should have a public relations communications plan in their back pocket,” advised Hatcher. “If you're going to spend the first couple of hours, the lone couple of days, in a crisis deciding who needs to speak to who, who has first-line responsibilities for any particular part of dealing with the crisis, you are going to be already defined. And I can tell you that rebranding a situation or rebranding a company is much more difficult and, frankly, much more expensive and time consuming than branding in the first place.”