Presentation of 3 mini-case studies in which high-profile organizations took steps to limit the impact of negative publicity

1. ReputationReputation
Management in aManagement in a
Cyclone:Cyclone:
Your CEO,Your CEO,
Social Media, andSocial Media, and
a Bankruptcya Bankruptcy
PRSA RochesterPRSA Rochester
March 13, 2013March 13, 2013
David KassnoffDavid Kassnoff
DSK WritingDSK Writing
585-704-7805 ● david.kassnoff@yahoo.com585-704-7805 ● david.kassnoff@yahoo.com

2. Three cases, many opportunitiesThree cases, many opportunities
 CEO with a “close and personal”CEO with a “close and personal”
relationship (e.g., zipper problem)relationship (e.g., zipper problem)
 Applebee’s and employees’ social mediaApplebee’s and employees’ social media
firestormfirestorm
 Bankruptcy’s impact on constituenciesBankruptcy’s impact on constituencies
beyond creditorsbeyond creditors
 Reputation management stepsReputation management steps

3. CEO with zipper problemCEO with zipper problem
 Nov. 2012: Lockheed Martin President andNov. 2012: Lockheed Martin President and
incoming CEO Christopher Kubasik accused ofincoming CEO Christopher Kubasik accused of
“close personal relationship” with employee.“close personal relationship” with employee.
 Kubasik forced to resign; issues statement filledKubasik forced to resign; issues statement filled
with self-flagellating prose:with self-flagellating prose:
 ““My departure in no way reflects on the strength ofMy departure in no way reflects on the strength of
Lockheed Martin. I remain confident in the futureLockheed Martin. I remain confident in the future
of the company.of the company.
 ““I regret that my conduct in this matter did not meetI regret that my conduct in this matter did not meet
the standards to which I have always held myself.the standards to which I have always held myself.
 I am grateful to have worked with such an outstanding team…”I am grateful to have worked with such an outstanding team…”
 Left Kubasik and Lockheed vulnerable to charges ofLeft Kubasik and Lockheed vulnerable to charges of
sexual harassment, discrimination. It’s an unacceptablesexual harassment, discrimination. It’s an unacceptable
abuse of power.abuse of power.
 Kubasik received $3.5 million separation payment.Kubasik received $3.5 million separation payment.

4. Path forwardPath forward
 BOD names Marillyn Hewson, president &BOD names Marillyn Hewson, president &
COO, as new Lockheed CEO.COO, as new Lockheed CEO.
 Outgoing CEO Bob Stevens,Hewson connectOutgoing CEO Bob Stevens,Hewson connect
with key constituencies: DC defense, mediawith key constituencies: DC defense, media
((Washington Business Journal),Washington Business Journal), Wall StreetWall Street
 Key message: Pentagon officials have beenKey message: Pentagon officials have been
supportive. “The initial response has been ansupportive. “The initial response has been an
understanding of the situation that we faced ...understanding of the situation that we faced ...
and a full measure of support for (Hewson).and a full measure of support for (Hewson).
I don’t think there’s apprehension about theI don’t think there’s apprehension about the
leadership change.”leadership change.”
 Dec. 2012: although available,Dec. 2012: although available, “we do not intend to seek
government reimbursement for any part of Mr. Kubasik’s
separation payment.” - Lockheed spokesperson

5. Applebee’sApplebee’s

• St. Louis pastor took congregants to Applebee’s after late
service. Receipt added 18% gratuity (restaurant policy for
parties of 8 or more.)
• Pastor Alois Bell crossed out the 18%, left the server a
note: “I give God 10% why do you get 18.”
• An Applebee's employee took photo of receipt, posted it to
Reddit, where it went viral.

6. Company policy violation?Company policy violation?
 Receipt showed pastor’s signature,Receipt showed pastor’s signature,
considered personal information, violatingconsidered personal information, violating
co. policy.co. policy.
 Pastor asked Applebee’s to fire waitress,Pastor asked Applebee’s to fire waitress,
poster of photo, & manager. Applebee’sposter of photo, & manager. Applebee’s
fired poster for policy violation.fired poster for policy violation.
 Pastor later apologized online for “lapse ofPastor later apologized online for “lapse of
character,” said she left $6 cash tip.character,” said she left $6 cash tip.
 Backlash on Facebook, Twitter:Backlash on Facebook, Twitter:

7. Backlash on social mediaBacklash on social media
 “We wish this situation hadn't happened. Our
Guests’ personal information—including their
meal check—is private, and neither Applebee’s
nor its franchisees have a right to share this
information publicly. We value our Guests’ trust
above all else. Our franchisee has apologized to
the Guest and has taken disciplinary action with
the Team Member for violating their Guest’s
right to privacy.”
 Co. statement buried among 17,000 comments
under Applebee’s original Facebook post.
 Social media staffer kept re-pasting the
statement in the FB stream of comments.

8. 33,000 comments on Facebook33,000 comments on Facebook
 “… pastor shouldn't be able to get away with her actions.
I can't believe you would allow a customer to bully you
after she mistreated one of your hard working servers.”
 “You REALLY messed up Applebee's I'd like you to
know I'm never going to your restaraunt [sic] again and
will share this story with everyone I know. You dun
goofed.”
 “I will not eat at Applebees ever again.” (boycott threat)
 CEO Mike Archer: This is a regrettable situation and we
wish it had never happened. However, the disregard for
an important policy left the franchisee no choice but to
take the action they did. I recognize that you may still
disagree with the decision, but I hope this may have
provided some additional insight. Many commenters are
demanding Applebee's rehire the server."

9. Bankruptcy’s other stakeholdersBankruptcy’s other stakeholders
 Jan. 2012: Kodak files Chapter 11Jan. 2012: Kodak files Chapter 11
 Documents detail assets, liabilities,Documents detail assets, liabilities,
creditors, timelinecreditors, timeline
 Internal communications with employeesInternal communications with employees
 Didn’t address non-creditor stakeholders:Didn’t address non-creditor stakeholders:
 United Way (Kodak provided largestUnited Way (Kodak provided largest
corporate, employee contributions)corporate, employee contributions)
 RPO, Geva Theatre, George EastmanRPO, Geva Theatre, George Eastman
House, Garth Fagan Dance, RMSC, UR, RIT,House, Garth Fagan Dance, RMSC, UR, RIT,
Urban League, Ibero, others.Urban League, Ibero, others.

10. Bankruptcy and stakeholdersBankruptcy and stakeholders
 Attorneys influence most conventional PRAttorneys influence most conventional PR
messaging (news releases, few interviews)messaging (news releases, few interviews)
 Need to emphasize 1:1 communications withNeed to emphasize 1:1 communications with
local stakeholders –local stakeholders – preserve relationshipspreserve relationships
 No emails – too easily forwarded (anywhere)No emails – too easily forwarded (anywhere)
 No letters – too impersonalNo letters – too impersonal
 Face-to-face visits – reinforce relationshipsFace-to-face visits – reinforce relationships
 Offer alternatives to cash supportOffer alternatives to cash support
 In-kind product donationsIn-kind product donations
 Volunteerism at major events/event marketingVolunteerism at major events/event marketing
 Video production services for local not-for-profitsVideo production services for local not-for-profits

11. Outreach resultsOutreach results
 Met 1:1 with 25 leaders.Met 1:1 with 25 leaders.
 All but two expressed appreciation forAll but two expressed appreciation for
face-to-face meetings. Preservingface-to-face meetings. Preserving
relationships became priorities. Agenciesrelationships became priorities. Agencies
urged to call with specific requests.urged to call with specific requests.
 Some organizations continuedSome organizations continued
sponsorship listings, w/o cash donations.sponsorship listings, w/o cash donations.
 Created perception: Kodak supportive,Created perception: Kodak supportive,
even in tough times.even in tough times.

12. Reputation management – be practicalReputation management – be practical
 You have a crisis communications plan? How often doYou have a crisis communications plan? How often do
you review, update to reflect changes in organization?you review, update to reflect changes in organization?
 Resolve toResolve to think before you act.think before you act.
 Consider how & when youConsider how & when you use leadership.use leadership. In someIn some
cyclones, you want the CEO far from the maelstrom.cyclones, you want the CEO far from the maelstrom.
 LockheedLockheed: CEO Bob Stevens had valuable: CEO Bob Stevens had valuable
relationships with DC’s Defense community, and choserelationships with DC’s Defense community, and chose
to leverage them. Strategically wise move.to leverage them. Strategically wise move.
 Applebee’sApplebee’s: should the CEO have engaged? Where: should the CEO have engaged? Where
was the VP of HR? Why did a social media staffer getwas the VP of HR? Why did a social media staffer get
the heavy load, without PR guidance?the heavy load, without PR guidance?
 KodakKodak: reliance on anything other than in-person,: reliance on anything other than in-person,
face-to-face communication would have erodedface-to-face communication would have eroded
reputations and relationships.reputations and relationships.

13. Focus on relationshipsFocus on relationships
1.1. Reputation management can be emotional. When you orReputation management can be emotional. When you or
your organization are under attack, it's hard to be objective.your organization are under attack, it's hard to be objective.
Don't let your emotions take control.Don't let your emotions take control.
2.2. Social media invites rapid response, butSocial media invites rapid response, but listen first! Takelisten first! Take
time to understand what’s being said before tweeting.time to understand what’s being said before tweeting.
3.3. Don’t leave social media conversations to an inexperiencedDon’t leave social media conversations to an inexperienced
team member.team member. No knee-jerk responses or impersonal e-No knee-jerk responses or impersonal e-
mails that can be shared, retweeted,mails that can be shared, retweeted, and haunt you later.and haunt you later.
4.4. Have a community relations/corporate citizenship strategy.Have a community relations/corporate citizenship strategy.
Build relationships with external stakeholders regularly,Build relationships with external stakeholders regularly,
through 1:1 conversations.through 1:1 conversations. You can’t buy a friend when youYou can’t buy a friend when you
need one.need one.
5.5. Synch community relations with your crisis PR strategy, soSynch community relations with your crisis PR strategy, so
internal, external stakeholders aren’t left out.internal, external stakeholders aren’t left out.
6.6. Be human. Instead of quoting policy, consider two simpleBe human. Instead of quoting policy, consider two simple
words:words: "I'm sorry." Use them."I'm sorry." Use them. Mean it when you say it.Mean it when you say it.

14. Questions?Questions?
Thank you.Thank you.