Product contamination-Did I hear someone say “Tiger Woods”

Crisis leadership or crisis management?

“We estimate that in the days beginning with Tiger Woods’ recent car accident and ending with

his announced “indefinite leave” from golf, shareholders of companies that Mr. Woods endorses

lost $5-12 billion in wealth.”

http://www.econ.ucdavis.edu/faculty/knittel/papers/Tiger_latest.pdf

The perpetual requirement for any company, especially those with a strong commercial brand association or derived income from public opinion, is the identification and management of stakeholders. The priority of communication can be readily identified with a simple x and y chart that apportions values for the level of interest and influence any group or individual may hold with your brand/company. For example, a stakeholder (media, investor, regulator, consumer, etc) with a very high level of interest in your brand, product, processes or return on their interest and is likely to know most things that occur relative to your success of failures. If that same entity has a high level of influence in your operations or the communications specific to your company, they will invariably be one of your highest needs when developing holding statements, pre-emptive advisories or response to publicly circulated content. Communicate with this group, quickly, sincerely and frequently and as a matter of priority. For those with less interest and influence, they will still get your message but at a time more appropriate to their weightage. Do not however underestimate the cumulative or cohort potential of this group should they surge to become a much more credible element should an issue of high emotional (mothers on issues affecting their children, unions), financial (investors or sponsors) or consumption (consumer groups; inclusive of the media) value rapidly circulate among one or all of your associated stakeholder elements.

Information time to market is (in contemporary terms) all but instantaneous, even if you are not! It is therefore imperative that a degree of preparation be conducted for all companies, big or small. It is a folly for any company to operate with this knowledge and not have a process or service to continuously monitor the myriad of available networks that introduce or perpetuate content that could adversely affect your value proposition. This is only part of the preparation required, as any time spent on planning or preparations established before demand presents, will pay dividends well beyond their establishment value. For this you need a number of holding statements, media release, stakeholder communications and the like. This is further supported with a detailed, rehearsed and timely escalation protocol that allows you to identify, analyse, adapt and respond to applicable situations that invariably require customization as you can’t always predict the nature and theme of every issue in advance. You could of course ignore this totally and rely on your response only capacity but as they say “prevention is always better than the cure”, cheaper too!

Where Tiger, and many individuals and companies before him went wrong; despite the sizable investment and earnings capacity associated with his personable brand (especially since it appears to have been substantiated on a pious and family friendly ethos) was apparently to invest only in a response, albeit weak, without preparation and substance. You get what you pay for essentially. I personally could not care less about what he or any other athlete, actor; media personality does outside of their chosen expertise/profession. However, there are plenty that do and it sells.

The net result of the information storm that has ensued has the “Tiger” brand has been impacted. Pre-event equity will protect the brand to a degree but much like natural disasters whereby the government or companies are not “blamed” for the event, they will be evaluated on their subsequent response to the issue. Just ask the Prime Minister of Taiwan who lost his job as result. The impact in this case be measured in dollars and cents, both now and any future earnings.

A number of studies have been conducted on the investment loss attributed to crisis leadership failures and the results are consistent. Your investment pre-incident will pay dividends for daily and extreme disruption events, whereby a failure to plan all but guarantees a plan to fail. If only Tiger and his paid executives bothered to read the instructions first, we may have seen a much different outcome than is currently a slow moving train wreck.