Crisis Chat: How to Use Soundbites to Deliver YOUR Message
Did you know the optimal soundbite for a media interview is between 5 and 10 seconds? In this Crisis Chat, Kathleen Cairns, Fallston Group’s Communications Strategists offers tips to help ensure the messages you want your audience to hear are the ones you deliver.
How to Be a Sound Leader During Difficult Times
As I approach four decades of leading organizations under challenging circumstances in numerous leadership positions, in both the private and public sector, I can assure you that challenges, obstacles, and difficult times are inevitable. Being a good leader during times of ‘smooth sailing’ is easy, but when a crisis occurs, that’s when your leadership skillsets are truly tested. Throughout my career, the leaders I have admired most acted similarly at all times; the point is, being a good leader requires a skillset of composure, preparation, adaptability, and optimism that are translatable from day-to-day tasks to an extraordinary crisis. I have never experienced a poor leader who suddenly becomes a good leader during crisis. This shared insight is because I firmly believe there is no substitute for building a solid leadership foundation that is the base of your organization. This consists of creating a valued-based culture, building personal and professional relationships with your employees, and instilling trust within your team. Quality leaders recognize employees as real people, creating strong relationships built on mutual gratitude and respect. These essential leadership qualities are central to communicating an issue to your employees and stakeholders with integrity, which will translate into how efficient your messages are received during a time of high-stress and urgency. During crises, messages need to be delivered in ways that are easy to understand, concisely outline of the options available to address the situation, and show self-awareness to express compassion for those impacted by the situation. Perception is reality, and how your employees perceive you daily will have a tremendous impact on how they respond to you during a critical time of need. Remember, your employees are your most valuable asset. Through my experiences, I have learned to look for leaders that have an enhanced self-awareness (often referred to as emotional intelligence) as a prerequisite to effective leadership; in essence, you must be able to see people and changing environments through different lenses. Through enhanced self-awareness, leaders can be more adaptive, resilient, and accepting of feedback, and be open to change. A mentor of mine frequently refers to these leadership qualities as the building of muscle memory. Why is building muscle memory crucial? Simply stated, a leader who fails to exercise these leadership characteristics and qualities routinely fails to exercise them when truly tested. Moreover, the development of muscle memory goes far beyond the leader learning these skills. It requires taking active responsibility for training staff as well. Organizations must develop these qualities and characteristics through your example, training and well-earned influence. When faced with falling short of stated goals or making mistakes along the way, I reflect on a watershed event early in my career. A compelling statement was made to me by a well-recognized leader after I made an unintentional error in a political setting of significant consequence. I was asked: “What did you learn today as a result of your experience?” After detailing my learned insight with great remorse, she stated: “Then you are more valuable to me and this organization today than you were yesterday.” These few but profound words of redemption have remained etched in my belief system, further emphasizing the role of good leaders in building muscle memory of what it means to be a good leader in difficult times.
Uh-oh…Hot Mic!
Have you ever said something you thought was confidential, but soon realized someone or some ‘thing’ overheard you? The inevitable answer is yes – we all have. However, the consequences of ‘sticking your foot in your mouth’ are much more severe today than they were years ago. Why? The answer is simple – technology. At Fallston Group we often tell our clients “anyone with an internet connection and recording device can wreak havoc on your brand.” This happens within seconds or minutes. The speed of information is faster now than ever before, and so are its verdicts – in other words, the court of public opinion is alive and well. But what’s different than the court of law, is the court of public opinion is judging not only current events but history within a modern, real-time context. Consumers feel empowered more than they ever have before, because of social media and other digital platforms. And not just to criticize and attack specific brands, but to generally share their opinions on brands, issues, events, etc. Consumers will vote with their heart, their wallet, their voice… and, we must adapt to today’s environment. A recent example is (now former) veteran NHL referee, Tim Peel, who ruined his reputation and career in a matter of seconds. Peel was being recorded during a National Hockey League regular-season game (as most professional referees, umpires, sports games, and even players usually are) and during the first several minutes of the game, Peel stated to another referee: “it wasn’t much, but I wanted to get a f***** penalty against Nashville early…” (Dedaj, 2021). Once the audio was analyzed by league executives, Peel was stripped of all his professional refereeing duties, but scrutiny didn’t stop there. When it comes to the court of public opinion, assumptions were quickly made, and questions were asked. People wondered, are his comments related to sports gambling? Is he a Red Wings fan (the opposing team)? Ultimately, what is his bias? Regardless of the ‘why,’ the awareness of his actions, words, and environment are the reasons his career is now tarnished, and reputation is ruined. This surely isn’t the first (or the last) time we have watched careers mushroom cloud within a matter of minutes. Always remember, when you’re with the news media, your mic is always ‘hot.’ In fact, with technology being as pervasive as it is today, it seems there is always a ‘hot’ mic or video wherever you go! Now, if you find yourself on the wrong end of a ‘hot’ mic, we’re often asked what to do, regardless of how devastating the recorded comments or actions are. We believe you start by embracing Dr. George Everly’s Resilient Moment Communications Model. The Model suggests that if you answer the following questions, the overwhelming majority of the questions people have, will be answered: What happened? What caused it? What are the effects? What is being done now? What needs to be done in the future? While telling your story using this framework won’t make the issue immediately go away, it will go a long way to articulate your position, whether the court of public opinion agrees with you or not. Bottom line remember you are always ‘HOT’!
Warning Signs for Company Insolvency and Bankruptcy
By Peter S. Goodman, Turnaround Expert The following is a list of indicators/ warning signs that your company may be insolvent and in need of restructuring its balance. Promptly forecasting or discovering these indicators is a critical management function that can mean the difference between a successful corporate financial restructuring versus financial failure. Upon discovery that your company may be in financial extremis, management must make sure they have the expertise on hand to deal with the problem. Generally, the C-Suite does not have the corporate expertise to address insolvency and thus turn to hiring outside turnaround experts. Turnaround experts may include the hiring of a corporate officer with expertise in financial turnarounds as well as a law firm and financial advisor that specialize in this area. If the company’s financial situation is severe, these professionals can assist with a turnaround plan that may include the filing of a bankruptcy petition under Chapter 11 of the United States Bankruptcy Code. A Chapter 11 petition allows for current management to continually operate the company in bankruptcy and automatically stays from collection all creditor claims. By staying all creditor enforcement actions, a Chapter 11 bankruptcy filing allows your company time to restructure its operations and exit bankruptcy under a payment plan approved by the Bankruptcy Court that binds all creditors. Indicator 1 – Your company is in breach or is expected to be in breach of financial covenants in credit agreements or other material contracts. Promptly discovering or forecasting the breach allows your company time to engage with its lender. Normally, the lender would like to avoid a borrower default/bankruptcy filing. Consequently, the borrower has some leverage to negotiate an interim waiver or standstill agreement with its lender. The interim standstill will give the parties time to negotiate a turnaround plan. Should these discussions fail, the filing of a chapter 11 petition in bankruptcy automatically stays the action of a lender to collect on its loan. Many of the indicators discussed below can also lead to a breach of the company’s financial covenants. Indicator 2 – Your company’s supply vendors require cash on delivery. If trade vendors suspect your company is insolvent, they can demand cash on delivery terms. COD demands can further exacerbate a company’s liquidity problems. If your company has an available line of credit it can offer letters of credit to important trade vendors. Discussions with the vendors, including discussions of possible turnaround plans may assist in providing terms other than cash on delivery, particularly if the vendor wants to preserve the business relationship or is concerned about a possible bankruptcy filing by the company. In the event your company files a chapter 11 petition, vendors that ship post- bankruptcy receive a priority claim that comes ahead of pre bankruptcy trade debt. Additionally, upon filing for Chapter 11 your company can request that the Bankruptcy Court authorize the payment of certain critical vendor’s pre-bankruptcy claims. Indicator 3 – Your company faces an impending judgment that the company cannot afford to pay. The filing of a chapter 11 petition in bankruptcy automatically stays the execution of the judgement and may allow for an appeal of the judgement without the requirement of filing a bond. As an alternative to filing for bankruptcy your company can seek to negotiate an agreement with the judgement creditor delaying the execution of the judgement. Indicator 4 – Your company has a negative valuation. While companies do not regularly conduct formal valuations of the corporate enterprise, if management suspects that the company may be insolvent it may be helpful to engage a valuation expert to perform either a formal or informal valuation so management can then assess its options while it still has time and liquidity. Indicator 5 – Your company faces significant financial exposure, e.g, the company is upside down on financial hedges or has other significant off-balance sheet financial liabilities. Companies frequently find themselves in trouble because of ill-timed or poorly designed hedging transactions. The filing of a Chapter 11 petition may not stay the liquidation of the financial hedges, but it may stay the enforcement of a resulting claim against your company. Indicator 6 – Loss of a major customer impacts your company’s ability to pay debts as they come due. The loss of a significant customer may adversely affect your company’s balance sheet and depending upon the significance of the resulting revenue loss can lead to bankruptcy/insolvency, The filing of a chapter 11 petition can buy time for your company to rebuild its customer base and reduce its overhead in the wake of the loss of the customer. Indicator 7 – Your company has negative cash flow beyond two or more consecutive quarters and insufficient financial reserves to cover the gap. A company cannot survive without cash and negative cash flow over several quarter can deplete reserves, breach loan covenants and lead to insolvency. The hiring of turnaround experts who can assess the reasons for the cash losses can assist in the turnaround process. If the loss of cash cannot be quickly addressed and the company’s financial reserves are nearing depletion the filing of a chapter 11 petition must be considered to buy time to properly address the company’s financial structure. Indicator 8 – Your company has dwindling cash reserves. Company’s that have no cash on hand make poor candidates in restructuring/bankruptcy cases. If reserves continue to be historically low and/or insufficient to continue operations bankruptcy or an out of court restructuring alternatives should be considered. The filing of a chapter 11 petition in anticipation of a successful restructuring requires the hiring of professionals e.g., lawyers and financial advisors, paying post-bankruptcy vendors, and other significant costs so having cash on hand at the time of a bankruptcy filing is critical. Indicator 9 – Your company has significant financial losses. Occasionally, a significant financial loss can lead to insolvency and a bankruptcy filing. The impact of the financial loss on the company’s solvency and ability to conduct operations should be immediately assessed
Tiger Woods – Legacy and Reputation
Tiger Woods is often referred to as one of the best, if not the best, player in PGA Tour history. Tiger is tied for the most PGA Tour wins with Sam Snead, and currently is second to the great Jack Nicklaus for most Majors won. His entire life is focused on winning – which is depicted in the most recent HBO (2021) documentary “Tiger.” The show is a dark look at Tiger the individual, and not just Tiger the golfer, which has his fans, other professional players, and some media crying foul. People don’t like to see the downfall of someone they cheered for and even emulated. For many years, Tiger was known as a genuine but private person, and a phenomenal golfer and athlete. His reputation was clean, and people knew Tiger was breaking racial barriers in the sport of golf. This was a guy who was and is under a microscope – and the entire world, golf fan or not, was watching him. When his personal life imploded in 2009, the court of public opinion took a hard stand. Companies and people chose to not be associated with someone who cheated on their wife, went into addictive treatment, and disappointed many in the community. When the sex scandal first hit the news, sponsors such as Gatorade and Gillette dropped Tiger as a brand ambassador, as they were aware of the impact the bad press may have on their brand acceptance. And that’s the key – whether it’s public or private corporations, pro athletes or entertainers, nonprofits or NGOs, there is an ardent responsibility (some would say an impossibility) to maintain a near-perfect image to ensure supporters stay aligned with their brands and with the individual. Unfortunately, when the video of Tiger’s DUI arrest surfaced, many who screamed his name on hole 18 were now screaming for other reasons. Fallston Group developed and routinely embraces the “15-70-15 Paradigm.” The 15% on each side of the 70% represents the unwavering ambassadors or detractors – in this case, those who will always love Tiger on one end, and those will always dislike him on the other. The 70% in the middle represents the real objective jury in the court of public opinion – those who will “render verdict” about Tiger, his brand, and his decisions, once they learn all the facts. This is generally true for any company or person who finds themselves in crisis. Very simply, reputation leads to trust and trust leads to valuation – and not all currency is financial. It does not matter how many Majors Tiger wins, or how much he donates to his charities – Tiger, at times, realized the diminished trust of his supporters, and that his valuation and reputation has suffered. And, if you’re wondering how much his reputational crisis cost – Tiger lost about $34 million in lost sponsorships according to Bleacher Report (Chriswell, 2011). It has been 12 years since the 2009 sex scandal, and HBO certainly made it clear that the public will determine Tiger’s legacy based on his actions and the inevitable impact. Ironically enough, Tiger is not the only person or entity being judged – since HBO released the documentary, the court of public opinion is again judging, this time it’s HBO, for its depiction of Tiger. Despite how negatively Tiger was positioned in the show, people will still make their own judgement about who Tiger is (and was) – a golfer, a philanthropist, a recovering addict…or maybe all these things. Tiger Woods has learned some hard lessons. Warren Buffet said it best – “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently”. And, as we say at Fallston Group: When all is said and done, what do you want to have said and done. We wish Tiger a speedy recovery so he can continue his life’s journey, filled with peace and happiness.
Does ‘Cancel Culture’ Pose a Threat to Our Freedom?
Cancel Culture refers to the popular practice of withdrawing support for public figures and companies after they have done or said something considered objectionable or offensive (Dictionary.com). Rob Weinhold, Fallston Group’s Chief Executive and resident crisis leadership expert was on the air discussing Cancel Culture and how it has affected even the largest and most well-known brands.
Crisis Chat: Honesty is an Interview Best Policy
Forbes: Here’s What Executives Need To Know Before Responding To Consumer Protests
Fallston Group’s Crisis & Leadership Expert and Chief Executive, Rob Weinhold, was recently featured in Forbes, offering insight and perspective on current events. Review the article here.
Dallas Mavericks and The National Anthem
Accountability in Communications
No doubt the pandemic has deeply affected our families, work, the economy, social activity, and of course, our health. In has also affected how companies operate and how they communicate with their customers and the public. Being tone-deaf to what is happening in the world can do tremendous reputational damage to a brand. Many companies recognized this and started to incorporate acknowledgment of the pandemic into their Corporate Social Responsibility programs, and their communications, in mid-2020. And now several major brands are recognizing the need to not only adapt to the societal changes, but also involve themselves by reaching out to the public with pandemic messaging, some of it replacing their existing marketing. Anheuser-Busch, Pepsi, Coke, Audi and others are adjusting, or even eliminating, the holy grail of marketing platforms from their ad schedules: the Super Bowl. And several are donating their ad time to vaccine education and other non-profits. This is an excellent example of following some of the basic tenants of good communications, regardless of the time we find ourselves in. Stay connected to what is happening in society, and with your public. Be authentic and transparent. Deliver value to your audience. Be flexible and adjust when appropriate. Being socially responsible is not only about donating money and involving your employees in cause programs. Corporate Social Responsibility is about being accountable to your stakeholders, the public, and to yourself. It is an awareness of how your brand affects society. Companies need to learn how to “read the room.” Corporate Social Responsibility should be a critical part of a company’s branding efforts and in some cases it can even lead the efforts and serve as the umbrella mission over marketing and public relations, driving the company image. Whatever position your company decides to embrace, the recognition of societal change can be a driver for positivity in your communications and show benefit and value to your publics.
