8: Game Changer 5: Keep Improving
In most instances, brands have only been successful in digging their way out of a crisis by making significant improvements - or more aptly, it is their failure to recognize the need for improvement that put them in a vulnerable position in the first place. And to go further, brands that are continuously evolving and improving tend to find themselves in trouble less often than those who are attempting to maintain business as usual in a changing environment.
This notion is at the root of many of the sayings about crisis that depict it as a catalyst to make positive change: and many brands that have been under fire have emerged stronger for the experience. This is not necessarily a good thing: if it takes a near-death experience for a brand to see the light and make changes that many will attest are long overdue, it's a sign of very poor leadership.
In that sense, a company that has been through a crisis is not necessarily better than another that hasn't. Sometimes, a company that hasn't had a crisis is due for one; but most times, a company that hasn't had a crisis has been sufficiently well managed to avoid having one.
The lesson of this should be well-heeded: that you will find that you do not need to manage your way out of a crisis if you can manage to avoid one - which often boils down to a commitment to innovation.
Heed the Warning Signals
In the wake of a crisis, critics are quick to point out the warning signs a company should have noticed that would have helped them to detect a problem and avoid a crisis. Companies may wish to dismiss such critics as Monday-morning quarterbacks, but the truth is that the evidence was there, and those in positions of leadership are (rightly) expected to be attentive to the warning signs and able to avoid catastrophe.
(EN: There's an extended case history of Ford Motors, which has faced many catastrophes in nearly a century of being in business, but it seems a montage of disaster and recovery, up until Ford was the only auto maker who didn't require a government bail-out during the recent economic crisis. This was remarkable, but seems just another disconnected fact in a long ramble.)
Learn from Critics
Many firms take a combative stance when it comes to criticism, and their response is a mixture of denial and avoidance. What they don't seem to realize is that many critics have positive motivations - they call attention to problems so that firms will fix them.
Granted, not all critics have a positive motivation: some merely delight in deriding others, or seek to use criticism as a way of gaining personal power and control over others, or are simply envious of the success of other people. Some critics are clueless and don't understand your goals, don't accept that their opinion does not jibe with those of your target market, or have unreasonable demands and ridiculous opinions of the way things ought to be. There are plenty of people out there whose opinions are well worth ignoring, and it often seems that the people who do the most talking have the least to say, and are most aggressive in pursuit of far more attention than they merit.
But on the other hand, there are critics who actually bring some value, regardless of whether their intentions are positive, the criticism they level at a firm reflects not just their own opinion, but the concerns of many - and simply ignoring or denying them will merely exacerbate a growing problem.
McDonald's is the author's case study for this: on minor incident in which the word "McJob" appeared in dictionaries in 2003 as a term for jobs that provide little pay and have no future (EN: This was coined by Douglas Coupland some years earlier). This was true enough, but McDonald's retorted by showing the number of its former workers who went on to succeed in other fields, suggestion that while it is a temporary job for many (estimates suggest 10% of all Americans have worked for McDonald's at some point in their lives), it teaches skills that are valued in the career world.
The company faced an even larger critic in Morgan Spurlock, whose documentary "Super Size Me" criticized the nutritional value of the firm's food. Rather than fighting back. McDonald's recognized that this one critic was saying things that many people already believed - and it gave them an excuse to be very public in making changes to improve the quality of its food and offer a healthier menu. As such, the net result of the negative publicity of the documentary and the positive publicity about the changes the firm has made in response have been a net gain for the brand.
Don't Stand Still
Nostalgia can be a valid strategic choice for some brands. Comfort foods or household brands that that the customer back to a previous time in their lives, often drawing on good memories and sentimental experiences. They may take the user even further back to what they imagine things were like in the "old days" of their grandparents. Even in trendy categories such as clothing, "retro" has an appeal.
However, there's a clear difference between making a choice to leverage nostalgia, and simply remaining stuck in the time out of refusal to change. Some legacy brands age with their customers - but when their customers become elderly, there is no new generation to replace them, and the brand dies with its customers.
The author cites the case of Marks and Spencer, a 125-year British retailer that maintained a mix of household goods, groceries, and clothing that would dabble in just about anything (it opened restaurants in some stores, offered financial services, etc.) to the middle-class consumer. Its operating policies ranged from the good (carries only domestic goods and has a no-quibble refund policy) to the bad (no credit cards, closed on Sundays) to the bizarre (no fitting rooms for clothing).
Near the turn of this century, the firm's profits took a plunge: people found the level of service to be stodgy and stiff compared to newer and more customer-oriented chains, and the brand was seen as old-fashioned (catering to pensioners) in both its format and its merchandise offerings.
The company's solution was to bring in younger managers (the joke was that M&S staff were like government employees in their tenure and indifference to customers), changed some of its inhospitable policies (credit cards now accepted, now open Sunday), opened its product line to include foreign-made goods that were cheaper or better than domestic ones, gave itself a visual makeover of its stores, and leveraged digital media to better connect with and gather feedback from customers.
If There's a Problem, Fix It
In the old days, criticism of a firm was controlled or limited by the resources of a critic. A customer who had a poor experience, or an employee who was badly treated, could complain to a relatively small number of people, and unless he had financial resources or connections, his story would not get far.
Social media has changed that significantly, where one person can speak to the world with very little cost or effort. If they are clever or dramatic enough, the message will spread quickly, and many consumer brands have been pummeled by social media attacks.
(EN: I'm generally troubled by this perspective on social media. Firms claim to be "under attack" by those who share less than sparkling experiences. The social network itself is good at filtering out the cooks and cranks - but that leaves firms with the bigger problem of dealing with people whose complaints are legitimate. To view these people as attackers does not serve a brand well - those who complain the loudest are loyal customers who have been mistreated, and who would go right back to being loyal customers if the situation is handled accordingly rather than being classified and treated as an "attack" on a brand.)
The author uses as an example the Albemarle Corporation, a manufacturer of flame-retardant chemicals that are used in consumer goods, and which was the focus of many attacks about the impact of its products and manufacturing processes on the environment. Rather than combating the public backlash, the firm opened a dialogue with environmental groups and partnered with them to create "green" alternatives. In that way it changed the perception of the firm from one of the worst offenders to one of the firms that is doing the most to support the environmental cause.