In his lecture, Garcia focused on the intersection of crisis response and ethics, and demonstrated how COVID-19 – as a crisis that simultaneously affected every institution and every individual on the planet – provides a useful case study to see the patterns of effective and ineffective crisis response and ethical decision-making. Garcia quoted the Greek philosopher Plato, who noted: “To understand something difficult, study the biggest instance of it that we can. That’s because the patterns are easier to see. And the pattern is then laid up on heaven for anyone who wishes to contemplate it.”
Garcia began his lecture by laying out the foundational principles of effective crisis response:
Show you care.
Take risks seriously.
Work to mitigate those risks early.
He then contrasted the U.S. response to COVID-19, the worst in the industrialized world, and the Republic of Korea response, among the best. Both nations had their first confirmed case of COVID-19 on the same day, January 20, 2020. South Korea followed the principles of effective response and U.S. Centers for Disease Control and Prevention guidelines; the United States did not. After one year, the South Korean death rate was 1 fatality for every 39,000 South Koreans; the U.S. death rate was 1 fatality for every 809, or a fatality rate 49 times Korea’s.
Garcia also highlighted the ways that misinformation and the modeling of unsafe practices led to hundreds of thousands of preventable COVID deaths. He quoted the head of the U.S. Food and Drug Administration, who in May 2022 called misinformation the leading cause of death in the U.S.
You can watch the full lecture here:
At Columbia Engineering, Garcia teaches ethics and integrity for engineers for all incoming undergraduate, MS, and PhD students. He also teaches graduate electives in advanced ethical decision-making, crisis prevention, crisis response, and leadership communication. Garcia is the author of five books, most recently Words on Fire: The Power of Incendiary Language and How to Confront It. His next book is The Trump Contagion: How Incompetence, Dishonesty, and Neglect Led to the Worst-Handled Crisis in American History.
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On April 21, 2022, Logos president Helio Fred Garcia participated in the inaugural Global Brand Convergence, a free online experience for higher education students, faculty, and professionals around the world in public relations and marketing. Garcia participated in a panel discussion on “Crisis in an Enduring Pandemic,” alongside renowned communicator and crisis advisor Dr. Guanpeng (Steven) Dong.
Conceived by Jacqueline Strayer, the Global Brand Convergence was designed to connect and create a community to share ideas, innovations, and concepts to advance them in the classroom and in the profession. The inaugural event boasted more than 500 registered attendees from 50 countries and 54 colleges and universities.
In their session, Garcia and Dr. Dong discussed lessons learned from of how the COVID-19 pandemic was handled by the US and by China and several core principles and best practices in crisis response. Garcia and Dr. Dong have worked together in several capacities over the past 10 years, and in 2019 Dr. Dong was awarded the Logos Institute Outstanding Leader Award.
Watch the full panel discussion, moderated by Iliana Axiotiades here:
In addition to Garcia’s participation in the event, Logos Consulting Group was proud to be one of the sponsors for this annual event. To learn more about the Global Brand Convergence, visit https://www.globalbrandconvergence.com/.
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The COVID-19 pandemic, a crisis has radically reshaped the dining experience and caused a devasting impact on a once booming industry. A September survey by the National Restaurant Association found that 43 percent of full-service operators and 33 percent of limited service operations do not expect to still be in business in six months of things continue as they are. And restaurants are anticipating a total loss of $240 billion this year as a result of the pandemic.
In many ways, the ingenuity of owners and managers has enabled many restaurants to survive this prolonged crisis. As restaurants have introduced innovative solutions to continue serving their customers, such as curb-side pick-up, delivery and drive thru options, or expanded their business to grocery services, the industry has seen marginal gains since the spring. But it has not been enough.
The unfortunate reality is that it is unlikely the industry will be able to bounce back in the coming months. And the restaurant experience when we finally emerge from this pandemic will likely look much different than it did before.
So, what can restaurants at this point in this crisis?
Take Risks Seriously
The US response to COVID-19 pandemic is, in my opinion, the single worst handled crisis in our nation’s history. At the time of writing this, more than 10 million Americans have contracted COVID-19, and nearly a quarter million people have died. And this could have been avoided.
A study published in October by Columbia University’s National Center for Disaster Preparedness found that between 130,000 to 210,000 American fatalities would have been avoided if the nation had consistently applied policies equivalent to what other developed democracies had done.
A foundational principle of crisis response is to understand the scope and specifically the risks that a crisis represents, and then to do all that is necessary to mitigate those risks. The longer it takes to do that, the worse the crisis will get.
As we have seen, the federal government, in particular the current occupant of the White House, failed to take the risks of the pandemic seriously. And President Trump continues to diminish or ignore the risks of COVD-19, even as infection rates spike and more members of his administration test positive for the virus.
The changing of administrations may turn the tide of the country’s response, but we have quite some time before President-Elect Biden can enact meaningful change. In the meantime, the continued lack of a coherent federal response before the inauguration will likely to cause even more harm.
As cases surge across the country, restaurants need to take the risks of COVID-19 seriously. And that means recognizing that half measures won’t work in the long run.
While it may be tempting to continue indoor dining as we head into winter, the growing infection rate, as well as sporadic mask-wearing and social distancing policies across the country, will likely make indoor dining less safe, putting both customers and employees at risk. Restaurants need to recognize and take these risks seriously, and to be prepared to take decisive action early to protect their customers and their employees.
Foresee the Foreseeable
Many crises are not foreseeable. But months into this crisis, there are some thing we can foresee.
We are now in the third wave of the pandemic. In early November, we saw back-to-back record highs for daily cases. The likelihood, if things remain unchanged, is that we will reach a quarter million deaths by Thanksgiving.
President-Elect Joe Biden has signaled that he will take a far more aggressive approach to COVID, and has begun revealing a national strategy. In his acceptance speech, Biden declared, “We cannot repair the economy, restore our vitality, or relish life’s most precious moments… until we get this virus under control.” He continued, “I will spare no effort — or commitment — to turn this pandemic around.”
Restaurants need to be prepared for Biden to enact some form of restrictions for as long as necessary to control the virus. That means restaurants have time to prepare what will foreseeably be one of Biden’s first acts as president.
Take the Pain
No one wants the country to shut down. There is a real and lived cost for all of us in this moment of collective crisis, one that will be felt for years to come. But one of the principles of crisis management is that sometimes we need to take the pain in the short-term in order to thrive in the long-term. This is one of those times.
Restaurants have already taken the brunt of the pain during this pandemic. And previous governmental relief for the restaurant industry has fallen short.
However, restaurants will need to be prepared to take the pain of drastically reducing their operations again, of furloughing their employees, or of shutting down for some period of time. This is a difficult decision for any business make. But it is the only way that we as a nation will make it through this crisis, and ultimately the only way the restaurant industry will be able to truly thrive again.
As restaurants will need to make difficult, but necessary, decisions to protect their customers and staff, the restaurant industry can also be proactive in fighting for relief. Since June, the National Restaurant Association, the Independent Restaurant Association, and other have been actively lobbying for expanded relief for the industry. And as the government transitions in January, the industry may find new allies to aid this cause and ensure the long-term viability of the restaurant industry going forward.
Plan for the Future
While it will likely be necessary to take the pain in the short-term, restaurants can also plan for the long-term.
In crisis management, we know that in every crisis there is opportunity. COVID-19 has changed nearly every part of our society and daily lives. As we come out of this crisis, the restaurant industry, like many others, will not look the same as it did before the pandemic. But that does not mean it cannot as good as it was before. Or that it can be even better.
The industry has already demonstrated its resiliency in the creative ways that restaurants have adapted their business models to survive during the pandemic. Should a national shut down happen, restaurants can use that time to be proactive and plan how they will rebuild after the pandemic has ended.
What will the restaurant and dining experience be after COVID-19? Restaurants can take this time to re-imagine what this experience can be like in a post-COVID-19 world, and then organize their resources to re-invent and re-invigorate both their companies and the industry as a whole.
The restaurant industry has a long road ahead to get through this crisis. But by making smart decisions in a timely way, restaurants can get through this crisis – and help us all do the same.
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On November 9, 2020, Helio Fred Garcia spoke with Will Bachman on his podcast Unleashed about how leaders and organizations can understand prepare for, and respond effectively to a crisis. Unleashed explores how to thrive as an independent professional.
During their conversation, Garcia discussed the meaning of the word crisis, several key principles of effective crisis response, and ways that Logos Consulting Group works with clients to prepare for and respond to crises.
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By: Helio Fred Garcia @garciahf and Maida K. Zheng @maidazheng
Logos Consulting Group
“I call the head of Exxon. I don’t know, you know, ‘How are you doing? How’s energy coming? When are you doing the exploration? Oh, you need a couple of permits?'” Trump told supporters at a rally in Arizona on Monday. “I say, ‘You know, I’d love [for] you to send me $25 million for the campaign.’ ‘Absolutely sir, why didn’t you ask? Would you like some more?’”
This quote, as reported by the Washington Post is important for several reasons.
From a crisis management perspective, the first rule is to fully understand the risk, and to mitigate that risk quickly. In this case, the risk is that someone might interpret the comment as referring to an actual call with the Exxon CEO, who would then seem compromised.
The crisis communication strategy is to take control of the narrative and obtain the first mover advantage. If you don’t have the first mover advantage, you must respond and take control of the narrative within the “Golden Hour of Crisis Response,” a metaphor from emergency medicine. The Golden Hour refers not to a particular period of time, but to the observation that incremental delays in responding to a crisis – whether a medical emergency, a flood, or a more routine corporate setback – has greater than incremental impact on the outcome.
However, if an organization is first to define the nature of the crisis, its motives, and its actions, as Exxon Mobil did here, the result is that the organization will likely demonstrate caring and end up controlling the narrative. By capturing the first mover advantage, Exxon also deprived their adversaries of the chance to form a harmful narrative against the organization.
Upon hearing the statement from President Trump, Exxon Mobil immediately responded, posting on Twitter that, “We are aware of the President’s statement regarding a hypothetical call with our CEO…and just so we’re all clear, it never happened.”
This was an important and timely move on Exxon’s part. They named it a hypothetical call, thereby defining the nature of the crisis. And they made clear that the call never happened. If they hadn’t acted as quickly and clearly, they would have lost control of the narrative, leading to negative consequences.
Effective Crisis Response as a Competitive Advantage
Whether an organization survives a crisis with its reputation, operations, and financial condition intact is determined less by the severity of the crisis than by the timeliness and effectiveness of the response.
Two Oxford University researchers demonstrated the extent to which effective and ineffective crisis response affects a company’s enterprise value. Rory F. Knight and Deborah J. Pretty studied the stock price performance of prominent publicly-traded corporations that had suffered significant crises. They calculated each company’s stock price performance attributable to the crisis – stripping out market movements and other factors unrelated to the crisis that might have affected the stock price, and thus calculated what they called the ‘‘cumulative abnormal returns’’ for each company.
Knight and Pretty found that companies that mishandled crises saw their stock price (calculated as cumulative abnormal returns) plummet an average of ten percent in the first weeks after a crisis, and continue to slide for a year, ending the year after the crisis an average of 15 percent below their pre-crisis prices.
Companies with effective crisis response, on the other hand, saw their stock fall an average (cumulative abnormal returns) of just 5 percent in the weeks following a crisis, about half the initial decline of companies that mishandled the crisis. More significant, companies with effective crisis response saw their stock price recover quickly, and remain above their pre-crisis price thereafter, closing an average of 7 percent above their pre-crisis price one year after the crisis (Exhibit 1).
In other words, the tangible difference between effective and ineffective crisis response was, on average, 22 percent of a company’s market capitalization. Knight and Pretty assess the reasons for this disparity and conclude that the most significant factors are not the scope of financial damage or reduction in cash flows caused by the crisis. Rather, the most important determinant of a company’s ability to recover and increase its market capitalization after a crisis is the management team’s response. Knight and Pretty conclude that positive stock performance:
“. . . springs from what catastrophes reveal about management skills not hitherto reflected in value. A re-evaluation of management by the stock market is likely to result in a re-assessment of the firm’s future cash flows in terms of both magnitude and confidence. This in turn will have potentially large implications for shareholder value. Management is placed in the spotlight and has an opportunity to demonstrate its skill or otherwise in an extreme situation.” 
Exhibit 1: Effective vs Ineffective Crisis response
Source: Knight and Pretty (1997)
Lessons of the Past
Looking to a relevant historical example, Exxon suffered immense reputational and organizational damage following its ineffective crisis response during the 1989 Exxon Valdez oil spill.
Exxon suffered significant loss of reputation and eventually a great deal of financial loss – because the public perceived that its primary concern was not the harm that the spill caused.
Fifteen years after the spill a federal appeals court upheld a lower court judgment of $4.5 billion against the company (in addition to the more than $3 billion it had previously paid for cleanup and related costs). The Court said its purpose in upholding the award was to achieve ‘‘retribution and justice.’’ The New York Timesopined that such a judgment and such a purpose were entirely appropriate given Exxon’s seeming indifference in the initial phase of the spill.
This perception of indifference is the single largest contributor harm in the aftermath of a crisis, especially when there are victims.
Companies, governments, and leaders are forgiven when bad things happen. But they won’t be forgiven if they’re seen not to care that bad things have happened. This is a lesson that many leaders fail to understand or to act on in the initial early phases of a crisis.
Exxon’s early response to the Exxon Valdez spill demonstrated lack of both situational awareness and self-awareness. They also demonstrated a lack of leadership discipline and command focus. In both cases leaders fell into one of the common missteps in a crisis: denial. Former General Electric CEO Jack Welch describes the need to get past denial quickly. In a Wall Street Journal Op-Ed piece soon after the flood, Welch said:
“One of the marks of good leadership is the ability to dispense with denial quickly and face into the hard stuff with eyes open and fists raised. With particularly bad crises facing them, good leaders also define reality, set direction, and inspire people to move forward. Just think of… Churchill during World War II. Denial doesn’t exactly come to mind – a forthright, calm, fierce boldness does.”
It seems that Exxon has learned this valuable lesson because on Monday, Exxon’s stocks were XOM, -1.99%, and after providing the clarification, their stock rose to 0.69%. The numbers don’t lie, and reputation management is indicative of the numbers being reflected in the stock market.
Guidance for Leadership
Exxon clearly learned from its crisis response failures around the Exxon Valdez spilled. Exxon — now known as Exxon Mobil, was ready when Trump put the company and its CEO in the media and social media cross-hairs.
Have a clear sense of what constitutes a crisis, and know how to mobilize energy and resources quickly:
Develop an early warning mechanism/rapid response capability.
Designate a senior executive as responsible for crisis preparedness and response.
Make this executive accountable and provide sufficient resources to conduct a thorough analysis of vulnerabilities, crisis response strategies, and crisis implementation.
Pre-authorize this executive to take initial response steps without going through usual corporate approval processes.
Test the system with wargames, tabletop exercises, and other processes that challenge leaders to make tough decisions and act quickly.
Remember that the best plan won’t help if executives don’t know what to do or when do it. Recognize when business as usual needs to be suspended. A quick test:
Will those who matter to us expect us to do or say something now?
Will silence be seen by our stakeholders as indifference or as an affirmation of guilt?
Are others talking about us now, thereby shaping the perception of us among those who matter to us; is there reason to believe they will be soon?
If we wait do we lose the ability to determine the outcome?
If the answer to any of these questions is yes, then it is time to respond. If the answer to all four is no, then you have time to monitor the situation and prepare a response in case any of those answers change to a ‘yes.’
Control the agenda: don’t let the media, adversaries, or the rumor mill define your situation.
Keep in mind the Golden Hour of crisis response: incremental delays cause greater-than-incremental harm to reputation.
Remember your stakeholders. What would reasonable people appropriately expect a responsible organization to do when faced with this? The answer to this question should guide your response.
Develop messages and tactics with a goal in mind: How do you want your key stakeholders to think and feel, and what do you want them to know and do?
In a crisis, assure both self-awareness and situational awareness:
Coordinate all functions of the crisis response with frequent meetings/conference calls.
Correct mistakes early.
Understand what your stakeholders, adversaries, the media, and others are saying about you.
Keep your focus on the goal: influencing stakeholders. Decisions become clear when you keep your stakeholders in mind.
 The Impact of Catastrophes on Shareholder Value: A Research Report Sponsored by Sedgwick Group, by Rory F. Knight and Deborah J. Pretty, The Oxford Executive Research Briefings, Templeton College, Oxford, 1997.
Overnight the world learned that President Trump and the First Lady both tested positive for COVID-19. I wish them a full recovery.
But our challenge isn’t that Trump has COVID-19; it’s that the nation does. And it didn’t have to be this way.
A Teachable Moment: Patterns of Crisis
We are in a very teachable moment.
Crises follow predictable patterns. One is that most harm in a crisis is self-inflicted. Sometimes the initial crisis event itself is self-inflicted. But even when it isn’t, most of the loss of trust, confidence, and competitive position is self-inflicted because of an ineffective response.
A foundational principle of crisis response is to understand the scope and severity of a crisis and the risks it represents, and to respond based on those risks. Donald Trump never did.
On January 28 Trump’s national security advisor told him that COVID-19 would be the single largest national security threat in his presidency.
Dr. Irwin Redlener, Director of Columbia University’s Pandemic Resource & Response Initiative
On February 7 Trump admitted to Washington Post Associate Editor Bob Woodward that COVID-19 is spread in the air and is more deadly than the flu.
Compartmentalize the problem or solution. Trump did.
Tell misleading half truths. Trump did.
Lie. Trump did.
Tell only part of what you did. Trump did.
Blame others for your failures. Trump did.
Over-confess. On this one, Trump did not.
Panic, leading to bad decision-making. Trump did.
Shoot the messenger when you receive bad news. Trump did.
Trump has committed nine of the ten missteps when it comes to COVID-19.
The Human Consequences of the Missteps
COVID-19 cases on October 2, 202
Unlike other crises, this has had significant human consequence. At least 75 percent of the cases of COVID-19 in the U.S. would not have happened. And 150,000 people, according to Dr. Redlener, would still be alive.Leaders are judged based on how they deal with their most significant challenges. Trump failed this leadership test. Given the magnitude of the failure of crisis response after Trump was fully aware of the risks, this may be the single worst failure of leadership in American history.
I have previously published that I believe Trump’s handling of COVID-19 to be the single worst handled crisis, and largest leadership failure, in American history.
Again, I wish both the President and the First Lady a full recovery. But perhaps now we can move to a national masking, social distancing, contract tracing, and testing policy.
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Author Tony Jaques is a world-renowned expert on crisis and reputation. He heads Issue Outcomes, headquartered in North Melbourne, Australia. He worked for more than 20 years in Corporate Issue and Crisis Management, mainly in Asia-Pacific, and served two terms as a Director on the Board of the Issue Management Council, in Leesburg, Virginia.
The book opens with Dr. Jaques laying out the stakes of getting crisis response right:
“The Economist magazine examined the impact of crises which struck eight major corporations (worth over $15 billion) from 2010 to 2018 and the median share price fell by 33 percent. While most clawed back their absolute losses, compared with a basket of industry peers over the same time period the median firm was worth 30 per cent less in 2018 than it would have been without the crisis, a total deficit of $300 billion across the eight companies.
A survey of 685 business leaders from Fortune 1000 firms found they believed it would take more than four years to recover from a crisis which damaged an organization’s reputation, and three years for a crisis to fade from the memory of most stakeholders.
And an international law firm analyzed major reputational crises around the world and found that in companies unable to recover pre-crisis share value, 15 per cent of senior executives left within a year, compared with a departure rate of just four per cent in companies where share value did recover.”
The caricature of lawyers’ interventions in crisis (honored as much in the breech as in the observance) is that of forbidding the organization from saying anything or doing anything visible. While some lawyers still behave this way, increasingly lawyers are seeing themselves as business advisors as well as legal advisors. And we know that just as any crisis is a business problem before it is a communication problem, every crisis is also a business problem before it is a legal problem. Dr. Jaques points out that just because something is legal doesn’t make it right.
He offers practical guidance to CEOs on how to weigh conflicting advice, to lawyers on how to understand the bigger picture, and to communicators on how to be more persuasive in making the reputation-protecting case.
The book is well-researched and written.
More important, it is easy to read and very engaging, with a wealth of case studies, practical examples, and key takeaways. The case studies are from around the world and from a range of organizations, from companies to governments to the military. And the lessons conveyed are priceless.
I consider Crisis Counsel to be a must-read for those who advise or wish to advise on high-stakes situations, whether you are a lawyer, a communicator, a CEO, or a leader of any other form of enterprise.
I am honored to have written one of the three forewords to this important contribution to the field.
The other forewords were written by:
Dr. Robert Heath, Emeritus Professor of Communication in the Jack Valenti School of Communication of the University of Houston.
“I have been a crisis advisor for more than 35 years and have taught crisis management and crisis communication in graduate business and professional schools for more than 30 years. I have advised lawyers and been hired through lawyers to advise our mutual clients. I have taught lawyers through bar associations and have trained individual lawyers in crisis management. And I have fought with lawyers; sometimes I have won those fights. And I have learned from lawyers.
A typical interaction is this: In the CEO’s office the lawyer will give all the legal reasons to say as little as possible in the early phases of a crisis. The CEO will then look at me. My reply,
‘I believe you have received excellent legal advice. And you should take it seriously. But please recognize that you don’t have a legal problem, at least not yet. You have a business problem. And you need to make a business decision. You need to consider the risk of legal liability seriously.
But not exclusively. You should also consider the consequences of the loss of trust of those who matter to you: your employees, customers, investors, regulators, and others. You can protect yourself from legal liability that will play out years from now but lose the company in the process. Or you can attend to the immediate needs and concerns of your stakeholders now, in ways that manage future legal liability.” It’s very hard for the lawyers to object to that.
I then offer, “Between self-defeating silence and self-destructive blabbering, there’s lots of room to maneuver.”
I then ask the lawyer about categories of possible communication:
Can we acknowledge awareness of what has happened? The answer is usually Yes.
Can we express empathy toward those who are affected? The lawyers usually say, Yes, but we need to be careful not to admit blame. My reply, Great. Let’s do it carefully.
Can we declare our values? We typically have them published on our website. Can we describe the overall approach we will take to address the crisis and resolve it? The lawyers usually say we need to be very careful. I again reply, Great. Let’s do it carefully.
Can we make some kind of commitment? How about a procedural commitment: We’ll update you when we know more. Or a substantive commitment: We’ll get to the bottom of this and fix it. This often leads to the lawyers and communicators collaborating early in the crisis to find the balance. It doesn’t need to be adversarial or either-or.
He helps us understand the mindset of lawyers and the mindset of communicators, and how leaders can exercise good decision skills.
He includes a wealth of real-world examples of well and poorly handled crises from around the world and across forms of organization. It contains both wisdom and practical tools for responding effectively in a crisis. And he quotes a wide range of crisis experts (full disclosure: including me). This is an important contribution to our understanding of crises, leadership, and decision-making. It’s the kind of book I wish I had been able to read when I was just starting in crisis decades ago. And it is a valuable book for lawyers, communicators, and leaders in all sectors.”
About the Author
Tony Jaques, PhD, Author of Crisis Counsel (Author book portrait)
Tony Jaques, PhD, has spent much of his working life describing, researching and writing about crisis management, and helping to manage crises in government and in corporations.
He has served as a government ministerial advisor, corporate executive and business consultant and has an international reputation as an authority on issue and crisis management and risk communication. I
In his role as Asia-Pacific Issue and Crisis Manager for The Dow Chemical Company for more than 20 years he was responsible for implementing local issue, crisis and community outreach programs throughout the region and had a hands-on role in managing a number of high-profile crises. He continues to serve as a thought leader in those areas with new projects to educate other fellow professionals as a conference speaker.
Dr Jaques is a New Zealander who now lives in Australia, where he runs his own consultancy and lectures post-graduate students at two universities. At an earlier stage of his career he was a journalist in New Zealand and London, and later worked as a management strategic advisor and speechwriter.
He has written very extensively about issue and crisis management.in academic and business publications around the world, and is the author of three previous books in the field — Don’t Just Stand There: the Do-it Plan for Effective Issue Management (2000); Issue and crisis Management: Exploring Issues, Crises, Risk and reputation (2014); and Crisis Proofing: How to Save Your Company From Disaster (2016). He is also the author of the definitive, three-volume Dictionary of Battles and Sieges (2006). Dr Jaques is a former member of the Board of Directors of the Issue Management Council in Washington DC and received their Howard Chase Award for achievement in the field. He holds a doctoral degree from RMIT University (Melbourne).
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Crises reveal what organizations value. Whether a business demonstrates corporate responsibility during the COVID-19 pandemic, or fails to do so, can determine if the company and its leaders emerge from this crisis with the trust and confidence of their stakeholders intact.
Definitions of corporate responsibility have evolved from an exclusive focus on shareholder returns, to the acknowledgment by businesses of a much broader group of corporate stakeholders and range of responsibilities. Acting responsibly today means more than legal compliance and goes beyond corporate philanthropy.
At its core, corporate responsibility means meeting stakeholder expectations for responsible conduct. Meeting both the financial and non-financial expectations of its investors, customers, employees, business partners, suppliers, regulators, and the communities where it operates, helps a company to manage risk, protect its reputation, attract and retain employees, grow its markets, and sustain its financial performance.
Demonstrating corporate responsibility is a key challenge for business leaders in the best of times. As my colleague Helio Fred Garcia observes, the COVID-19 crisis comprises simultaneous crises (public health, business, economic, information, governance, social, mental health) of unprecedented scope that require a multi-dimensional leadership response. 
Unprecedented in its scope, the COVID-19 pandemic is an opportunity for companies and their leaders to live their values by acting responsibly.
When navigating next steps during the pandemic, business leaders should keep in mind key principles for demonstrating corporate responsibility.
Understand the potential impacts of your crisis response.
Responsible organizations understand the potential impacts of their actions and take steps to “do no harm.” Business leaders determining how to respond to the pandemic need to assess the potential impacts on all company stakeholders.
Well-managed organizations plan for foreseeable crises. Companies that engage in meaningful crisis planning likely had a standby pandemic crisis plan they could draw upon as they began to address COVID-19. Effective crisis management plans identify potentially affected stakeholders and catalogue relevant corporate policies for high priority scenarios. A global manufacturer’s pandemic planning, for example, would have considered the business impact of supply chain interruptions, triggers to suspend executive travel, and criteria for allowing employees to work remotely.
When evaluating next steps, companies should seek to “do no harm” by preventing or mitigating harmful impacts.
Companies without a pandemic crisis plan in place can still identify potential impacts to guide their response. Enterprise-wide impact mapping and assessment can help an organization prioritize next steps. By applying a human rights impact lens to its operations and stakeholders,  a hospital system, for example, might prioritize securing adequate personal protective equipment to ensure the health and safety of its healthcare workers; expanding diagnostic testing among vulnerable communities to ensure nondiscrimination in patient access to healthcare, and communicating information about the virus and medical capacity to ensure public access to reliable and timely information.
When evaluating next steps, companies should seek to “do no harm” by preventing or mitigating harmful impacts. Apparel companies that have cancelled supplier contracts for goods during the pandemic face criticism for triggering layoffs of the factory workers worldwide that make their products, often among the groups most vulnerable to COVID-19. A quick stakeholder impact assessment would have flagged the risk of harming supply chain workers. Responsible international brands have sought to protect workers by honoring their supplier contracts during the pandemic.
Similarly, companies that provide paid sick leave are protecting the health of employees, customers and the general public alike. When the California-based retailer Patagonia voluntarily closed its stores nationwide while continuing to pay its employees, its CEO and President, Rose Marcario stated, “It’s everyone’s responsibility to help stop the spread of this virus.”
“It’s everyone’s responsibility to help stop the spread of this virus.”
− Rose Marcario, CEO and President, Patagonia Inc.
Anticipate changing stakeholder expectations.
Meeting stakeholder expectations demonstrates corporate responsibility and earns the trust of those who matter most to your business. All stakeholders expect a responsible organization to care about the multiple dimensions of the COVID-19 crisis and to take appropriate action.
What stakeholders expect a responsible company to do will change. The current pandemic is a dynamic situation that calls for decision-makers to adapt policies to new information. Responsible companies meet stakeholders where they are and adjust accordingly.
Customers, for example, expect essential businesses that remain open (or that reopen) to follow public health guidelines, to protect their employees, and to protect vulnerable community members. Obeying the law is the just the starting point.
On my first trip to the grocery store after a statewide “stay-at-home” order had been issued, the store had placed limits on the number of scarce items that customers could buy, like cleaning products and milk. Employees were working hard to keep shelves stocked. Two weeks later, consistent with evolving public health guidance, the store was limiting the number of customers allowed inside at once, plexiglass shields had been placed between checkout workers and customer payment stations, and all store employees wore gloves and masks. The grocery chain had also adopted an industry-wide practice reserving its opening hour for elderly customers. On my most recent shopping trip, the store had instituted “one-way” aisles to ensure physical distancing and all customers were required to wear face coverings.
Some of these measures were mandated; some were voluntary. All track what the store’s customers, employees, and community would expect a responsible grocery store to do under the circumstances based on available information.
Conversely, companies that act contrary to stakeholder expectations for responsible conduct, even if the actions are legal and contribute to the bottom line, risk losing the trust of customers, investors, and regulators. Large public corporations that secured millions of dollars of loans under the Paycheck Protection Program intended for small businesses, for example, have endured substantial public criticism prompting some companies to return the funds. The angry reaction should not have been a surprise for corporate leaders paying attention to stakeholder expectations.
Philanthropy is not a substitute for responsibility.
Stakeholders expect responsible companies with the resources to do so, to give money and to tap their expertise during a crisis. Many businesses, large and small, have responded to the pandemic by providing financial or in-kind support to healthcare workers, to small businesses, and to international and community organizations addressing the impacts of COVID-19 on vulnerable populations.
Google has pledged more than $800 million to support small businesses, health organizations and governments, and health workers on the frontline of the global pandemic. The company’s contribution includes $250 million in advertising credits to help the World Health Organization and more than 100 government agencies disseminate information on how to prevent the spread of COVID-19. Citigroup is donating a total of $15 million to the United Nations Foundation and World Health Organization’s COVID-19 Solidarity Response Fund, to No Kid Hungry to support emergency food-distribution programs in the United States, and to international efforts in countries that are severely affected by the pandemic. The British and Dutch consumer goods multinational Unilever is contributing €100 million through donations of soap, sanitizer, bleach and food, including adapting its manufacturing lines to produce sanitizer for use in hospitals.
All of these efforts are welcome.
Philanthropy, however, does not excuse a company from acting responsibly elsewhere in its operations.
Amazon faces intense criticism for failing to adequately protect its employees from the outset of the pandemic; resisting paid sick time, hazard pay, and health benefits for part-time employees; and retaliating against a warehouse worker who protested working conditions. Since then, Amazon has enhanced its health and safety practices, hired 175,000 additional employees, and donated thousands of laptops to Seattle public school students, among other efforts. CEO and Founder Jeff Bezos announced a $100 million gift to Feeding America. The company’s philanthropic responses alone, however, are proving insufficient to meet stakeholder expectations for responsible conduct. Employees continue to protest Amazon’s working conditions and policies, and regulators have launched investigations into the company’s labor practices.
McDonald’s Corporation has donated over $3 million in food to support local communities during the COVID-19 pandemic; yet, more than half a million McDonald’s workers without access to paid sick leave are serving food nationwide.
Leading companies act and give responsibly.
Business leaders are called to act when government fails to do so.
The COVID-19 pandemic has triggered a crisis of government capacity and leadership. Corporate responsibility today means filling these governance gaps.
Business leaders should be prepared to address the governmental pandemic response by speaking out against harmful policies and advocating for responsible solutions.
Responsible companies in the United States are meeting public needs that the federal government has failed to address. Companies in many different sectors are stepping in to manufacture, purchase, and distribute personal protective equipment; to accelerate production of diagnostic tests and medical equipment like ventilators; and to disseminate accurate data on the virus and its spread. Microsoft voluntarily told its employees to work from home in support of local health authorities’ efforts to communicate the urgency of the looming pandemic in Seattle. Apple and Google are partnering to develop contact tracing technology to help governments and health agencies reduce the spread of the virus.
Stakeholders increasingly expect corporate leaders to speak out on public policy issues,  such as gun violence and immigration policy,  when government fails to act or causes harm. COVID-19 is accelerating this trend. In his annual letter to CEOs, Larry Fink, the chairman and CEO of BlackRock, the world’s largest asset manager, noted last year that “stakeholders are pushing companies to wade into sensitive social and political issues — especially as they see governments failing to do so effectively.” Fink called on CEOs to demonstrate leadership and corporate commitment to “to the countries, regions, and communities where they operate, particularly on issues central to the world’s future prosperity.” No issue meets these criteria right now more than the multi-dimensional COVID-19 crisis.
CEOs that understand and anticipate the potential impacts on of all of their company’s stakeholders are not rushing to reopen.
Business leaders should be prepared to address the governmental pandemic response by speaking out against harmful policies and advocating for responsible solutions. Consumer product brands have had to correct inaccurate information about disinfectants. Many businesses in the United States must now decide whether to reopen against data-driven public health guidance. CEOs that understand and anticipate the potential impacts on of all of their company’s stakeholders are not rushing to reopen.
Unprecedented in its scope, the COVID-19 pandemic presents a unique opportunity for companies and their leaders to live their values by acting responsibly.
Logos Senior Advisor Anthony Ewing counsels executives on corporate responsibility and works with clients to establish and strengthen crisis management programs. He teaches a graduate seminar on corporate responsibility at Columbia Law School.
https://i0.wp.com/www.logosconsulting.net/wp-content/uploads/2020/05/Demonstrating-Corporate-Responsibility-During-a-Pandemic-covid19-anthony-ewing.jpg?fit=2400%2C1350&ssl=113502400Anthony Ewinghttps://www.logosconsulting.net/wp-content/uploads/2021/05/HQ-Lambda-Consulting-Lockup-1030x562.pngAnthony Ewing2020-05-11 12:32:212021-09-03 20:23:18Demonstrating Corporate Responsibility During a Pandemic
“When you do the common things in life in an uncommon way, you will command the attention of the world.”
~ George Washington Carver
So: You’re wearing a mask and keeping a socially responsible distance. You’re staying safe but taking long daily walks in the nearly empty streets of New York City to keep yourself healthy and sane. You peer into the dark, empty storefronts as you stroll along. You arrive at the place you always found familiar and comforting; it now looks abandoned and forbidding. There is no human to greet you, only a few words on a single page attached to the front door. Almost every door on every street has a similar sign.
As the days of shutdown have dragged on, I’ve become intrigued by these signs, snapping pictures of at least 100 of them. I’ve read the words again and again. They are breathtaking in their sameness, leading me to the question: How much difference can a few words on a simple sign possibly make?
Businesses reopening in the aftermath of the current crisis may soon find out.
Sometimes the message on the door is just one word – “Closed.” Not terribly helpful, is it? That feels more like the end of a relationship than a reassurance that you and your spot will be reunited in the future.
While heavily trafficked commercial chains may have a following who look for convenience alone, a cozy neighborhood haunt cannot exist without building an emotional bond – appreciation, affection, even love – with its customers. When that business closes indefinitely, or its hours are suddenly and severely curtailed, anxious customers need to see words of gratitude, emotion, and empathy: “We thank you.” “We appreciate you.” “We miss you.” “We understand what you are going through because we are going through it, too.”
Empathy should start right there at the front door.
Surprisingly, even in these difficult times, when those words of connectivity matter most, when customers expect to find love letters from deeply grateful owners, they find crisis boilerplate instead, often written in haste, dashed off as a formality and perhaps copied from a neighboring establishment. Even worse, sometimes, the desired words do not appear at all.
That strategically placed sheet of paper – occasionally drafted with the assistance of a lawyer or a communications professional – may be instructive but it’s not terribly personal. Or authentic. Or meaningful.
That kind of corporate jargon often makes me stop reading – I imagine you know the phrases: “our top priority,” “we are closely monitoring,” “we are committed to …” But owners use them because they know they need to communicate quickly with customers coming to the door, and they want the message to sound official. Professional communicators reading this will understand that the sign on the door is a kind of stand-by statement to let the entire world, including those critical customers, know what is going on in that moment and what they can expect while the crisis – and temporary closure – continues.
ACKNOWLEDGMENT – a statement of awareness that something has happened.
EMPATHY – an expression of empathy or sympathy to those who are hurting or inconvenienced – and in COVID-19 times, everyone is hurting and inconvenienced.
VALUES – a declaration of the business’ values – including how much that business values those customers.
APPROACH – a summary of the actions the business is taking in the wake of the crisis.
COMMITMENT – a statement that sets future expectations, i.e., “We will keep you up-to-date as we hear any important news and will let you know when we can reopen. We will be here for you online even while we are closed.”
In all fairness, I’m sure these independent owners also mean to communicate how much they love and miss their customers. But their words – crafted out of necessity and in great haste from a template – don’t quite resonate. They don’t quite say: We are closed, but we miss you and are still there for you.
Contrast those signs with recent updates that a certain coffee company has posted on Instagram – the digital front door for many contemporary consumers. Note the likes and comments.
So, for owners of shuttered businesses – small or large, mighty or nimble – here are two important questions you should ask yourself:
1. How can you communicate your message in conversational human language, rather than boilerplate jargon? You’re dealing with ordinary humans. Why not sound like one?
2. How can you include a message of gratitude at the very top of the page? Owners should express their sincere thanks to the customer who has arrived at the door in the first sentence or two. What would happen if the language of the sign started there? Only good things, I promise you.
Here are some signs that hit the mark beautifully. Which ones do you like best?
One last thought: many of the signs that I see on the doors have been left there unchanged for weeks.
Dear shop owners— It’s not too late to change that sign!
https://i0.wp.com/www.logosconsulting.net/wp-content/uploads/2020/04/Dispatches-in-the-Time-of-COVID-19-Leave-Your-Empathy-at-the-Door-covid19-barbaragreen.png?fit=950%2C868&ssl=1868950Barbara Greenehttps://www.logosconsulting.net/wp-content/uploads/2021/05/HQ-Lambda-Consulting-Lockup-1030x562.pngBarbara Greene2020-05-01 12:23:162021-09-03 20:23:36Dispatches in the Time of COVID-19: Leave Your Empathy at the Door
The COVID-19 pandemic has been a battle not only for lives, but also for hearts and minds.
We’re in a crisis that no single sector or business is immune to. Every organization, from the family-owned pizza place in your neighborhood to a trillion-dollar corporation, is affected and faced with threats to its viability. Companies must also survive the court of public opinion through effectively responding to and communicating about the crisis.
Recent communications by Marriott and Macy’s and the consequences provide an instructive comparison:
The Wall Street Journal reported on March 17 that Marriott had begun furloughing tens of thousands of its employees, which later was confirmed by the company. Two days later, the company released a video update from its President and CEO Arne Sorenson on Twitter. Sorenson thoughtfully and authentically explained the significant impact that COVID-19 has had on Marriott’s revenues – a more severe and sudden financial impact than the 2009 recession and 9/11 combined. He then articulated a number of steps the company was taking to maintain financial viability going forward.
He closed by empathizing with his employees and highlighting his commitment to them:
“There is simply nothing worse than telling highly valued associates, people who are at the very heart of the company, that their roles are being impacted by events completely outside of their control. I’ve never been more determined to see us through than I am at this moment.”
“Leadership at its finest,” someone commented under the Twitter video, which had been viewed 915.5k times by the time of writing this blog. Forbes applauded Mr. Sorenson for demonstrating “truly authentic leadership.”
Marriott President and CEO Arne Sorenson delivers COVID-19 update
Conversely, on March 30 Macy’s announced in a press release that it was furloughing most of its 125,000 employees:
“Across Macy’s, Bloomingdales, and Blue Mercury brands, we will be moving to the absolute minimum workforce needed to maintain basic operations. This means that the majority of our colleagues will go on furlough beginning this week.”
They contextualized this decision by referencing a decline in store sales:
“While the digital business remains open, we have lost the majority of our sales due to the store closures.”
Like Marriott, Macy’s also announced other mitigating measures to conserve cash such as cutting executive salaries and freezing new hires.
For public companies, the individual stock price is a barometer of trust and confidence. While under the best of circumstances stock price indicates trust and confidence, it is arguably more of a critical matrix when people are anxious and hyperresponsive to changes in the pandemic.
On the day Sorenson released his video update, Marriott was at $66.80 per share, up about 4.7% from the day before. On the day of its announcement, Macy’s saw its shares down about 8.5% from the closing price of a day before, even though Macy’s essentially implemented similar business measures.
So, why did Marriott and Macy’s end up in such different places when pretty much doing the same things?
There are five best practices that determine whether companies win or lose trust when implementing unfavorable actions in catastrophic situations:
1. Actions alone do not communicate your intent. They must be combined with communication.
Actions should always go hand in hand with communications, otherwise you leave room for unintended interpretation. Communicating your intent can frame your actions in a persuasive, positive light. Failure to frame your intent will result in audiences judging your actions alone.
2. Reset expectations when previous ones cannot be met.
Trust is the natural consequence of promises fulfilled, expectations met, and values lived. When a business is no longer able to operate as usual, it is unrealistic for an organization to fulfill expectations that were set in ordinary circumstances. However, stakeholders’ expectations will remain the same unless the new circumstances that requires new expectations are communicated clearly.
3. When delivering bad news, be direct, transparent, and specific.
For dramatic actions to be understood by those who matter, the magnitude of the negative event in play needs to be communicated in full and clear terms. Do not use euphemisms. Be sure to show empathy.
4. Make connections, not announcements.
If possible, put a face to the communication and make personal connections with your audiences. Once a human connection is made, even the most undesirable decisions become more palatable. Sorenson started the video by acknowledging his “new bald look” as a cancer survivor. By exhibiting vulnerability and humility, he bonded with his audience on the emotional level. He then empathized with his employees. Macy’s, however, gave a straightforward, dry business update.
5. It’s never about you; it’s about them.
It is important to not think or frame the decision from the perspective of the leader or the organization in a crisis. The I/me/we/us frame of reference abandons the opportunity to demonstrate care and empathy and can easily be seen as irresponsible or self-serving. For example, Macy’s simply stated that it was furloughing employees to a basic operation level to support digital sales. However, employees don’t care about “maintaining basic operations;” they care about being able to pay rent and buy food.
It’s difficult to frame any unpleasant decisions from the perspective of stakeholders when the actions will at least in the short term hurt them. However, tapping into a higher value, inspiring a sense of duty and togetherness can help bring people to your side. But this has to be done in a candid and authentic manner, as Sorenson did in the video update.
The best times are often forgotten. Leaders and organizations are remembered for what they’ve done in the worst ones. Therefore, it’s critical for leaders to remember these five principles when they need to take unfavorable actions and deliver bad news. These best practices not only protect companies from losing their case in the court of public opinion, but also provide an opportunity to win more hearts and minds.
https://i0.wp.com/www.logosconsulting.net/wp-content/uploads/2020/04/Five-Principles-for-Maintaining-Trust-When-Making-Unpopular-Decisions-in-A-Crisis-covid19-yinnanshen.jpg?fit=1180%2C472&ssl=14721180Yinnan Shenhttps://www.logosconsulting.net/wp-content/uploads/2021/05/HQ-Lambda-Consulting-Lockup-1030x562.pngYinnan Shen2020-04-23 11:58:282021-08-26 20:49:44Five Principles for Maintaining Trust When Making Unpopular Decisions in A Crisis