Wednesday, November 30, 2011


Damage Control

GM makes it work


Image can be critical to an organization's bottom line.

    Ask Toyota.

    Ask Ford and Firestone.

Since a damaged "image" can have a severe impact on an organization - any organization, even ones that depend on donors, think charities and blood banks - things that can lower the image in the eyes of "The World" must be considered risks.

Sometimes, as in the case of General Motors and its "fire after an accident" Chevy Volt, the risk cannot be prevented.

But it can - it must - be mitigated.

Everyone knows the story of Toyota's acceleration problems and how Toyota dragged its heels publicly in dealing with the issue.

Many will recall the Ford-Firestone finger pointing when Explorer SUVs started "turning turtle." Rather than immediately move to replace Firestone tires then suspected of being either the cause or a contributing factor in the roll-overs, Ford and Firestone got into a PR battle as Explorers continued to tip over.

Ford finally replaced all Firestone tires on all Explorers but no one accepted blame for a bad combination of vehicle and tires.

One of my frequent admonishments to people who expect a risk management plan to be perfect before the first exercise is "Nothing is perfect the first time out."

No matter how expert the practitioner; no matter how conscientious the Subject Matter Experts, something always is overlooked and discovered only during an exercise. Nothing is perfect the first time out. Nothing.

GM found that out with its Chevy Volt.

According to a Los Angeles Times article titled GM learns from Toyota how not to handle a crisis (see,0,4124119.story), "After reports of fires in Volt electric vehicles that had been crash-tested, GM put the communications pedal to the metal — unlike Toyota, which responded slowly and ineffectually to its sudden-acceleration crisis."

The Times piece detailed the Volt's problem - fires that followed test crashes of its Chevrolet Volt electric vehicles - and what GM was doing to give its customers a "warm fuzzy feeling" toward the company, the brand (Chevrolet), and the specific vehicle (Volt).

GM apparently wants to avoid looking like Toyota, yet it is taking a leaf from Toyota's book from better days. GM is offering Volt owners free loaners until the "fire after an accident" issue is resolved. Toyota did something similar when it introduced it's high-end Lexus model and discovered a couple of problems. According to the Times, "Toyota had Lexus dealers deliver loaners to people's homes, repaired the recalled cars and returned them washed, detailed and with a full tank of gas"

Was Toyota's quick action appropriate? Count the number of Lexus vehicles in the neighborhood.

Understanding that (a) nothing is perfect the first time out and (b) that "things" will happen, the smart risk management practitioner recommends that "generic" scripts be created for possible image gremlins, and works with executive management, legal, and corporate communications/PR so that when - not "if" but "when" - an issue arises the organization can respond quickly.

The organization will have at least an outline of what to say, it will know who is capable of delivering the message (and who might freeze before an audience), and the spokes person will have practiced message presentation.

A really sharp practitioner also will recommend that multiple presentations be prepared to different audiences - all having the same basic content - audiences that include

  • customers

  • employees

  • financial backers (stockholders, lenders, etc.)

  • local media

  • national media

  • regulators

  • trade associations

  • vendors

As an aside, the reason for separating the media into "local" and "national" is to assure that the local media are not slighted. The national media reporters will go home once the story starts having "second day leeds" (cq); the organization will have to deal with the local press for the long term; treat the local reporters kindly. This scrivener once was "local press."

As with most risks, threats to the organization's image can be mitigated but, as with most risks, responses must be planned and practiced, exercised.

It is said that a person's greatest asset is his name.

That applies equally to an organization.

If I wrote it, you may quote it.

Longer articles at

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