STORES - October 2010 - (Page 74)

LOSS PREVENTION / Q&A Managing a Crisis Communications expert offers tips for damage containment BY LIZ PARKS ichard J. Coyle is an international relations and communications professional who has helped companies and organizations deal with reputational issues that engage the media, government and stakeholders. Formerly senior director of international corporate affairs for Walmart Stores, Coyle has also served, among other capacities, as president and state director of international trade for the Maine International Trade Center. R In this interview with STORES correspondent Liz Parks, Coyle shares some pointers on how retail spokesmen can effectively manage crisis communications. How important is it for a company to be well prepared to manage or preempt a crisis, both from a social perspective as well as a brand perspective? gather information that will help inform his response to the media, what procedures should be in place? It is absolutely essential. It is important to draw up plans on paper – not because you will need to refer to the script, but because of the thought process which is undertaken to create the documentation. I also recommend that crisis management scenarios be rehearsed with the senior management team. When a company spokesman is just learning about a crisis and has not had the time to get many details, what is the best way to initially respond to the media? I recommend an internal crisis list be ready in advance, so that the company spokesman knows immediately whom to contact about the allegations. Members of this task force should receive immediate copies of the report, and the spokesman should establish himself as the sole point of contact for media inquiries. Using a hypothetical case in which a retailer has been accused of buying goods from suppliers who used child laborers, what steps do you recommend that a company spokesman follow in responding to the media as this crisis unfolds? • Obtain a complete history of purchase orders and shipments for the factory in question. Become familiar with what has been ordered and the timing of shipments. If the report claims observations of children making white shirts in June, and your purchase order finished in March, the claims may be bogus. • Check your company’s audit history of the factory. What were some of the commonly found violations? If the factory has received stellar reviews in the past, it could mean the new report is fabricated. However, it could also mean your auditors have been paid off to mask serious violations. • Send an investigative team to the factory immediately with a copy of the report. Can the conditions in the report be readily observed? Do the photographs match? Do the records substantiate the claims? • Be sure to return the media calls from earlier in the day. Since it can take several days to fully investigate the report, I recommend a revised holding statement be released at the end of Day 1 that demonstrates a more complete understanding of the situation. Be clear that the company will only accept products which are made in an ethical manner and there is no tolerance for child labor. If the claims are ultimately substantiated, swift remedial action should take place. Your company can enhance its reputation by working with factory management to rectify the problems. Local government or law enforcement should also be notified: Caution should be exercised, however, in that local officials can often be very corrupt. A followup visit by your audit team should be undertaken in a few months to make sure that all changes have indeed taken hold. St ORES Liz Parks is a Union City, N.J.-based writer with extensive experience reporting on retail, pharmacy and technology issues. WWW.STORES.ORG If a reporter should call about unethical or improper business practices … and you are unaware of the situation, just admit it: Don’t try to bluff the reporter. Ask for the reporter’s deadline, and ask if she can forward a copy of the report to you or refer you to a website to find the report. Assuming that a company spokesman will have to call on other knowledgeable people within the organization to 74 STORES / OCTOBER 2010 I would recommend the following steps: • Prepare a short “holding statement,” which can be freely issued to reporters with early deadlines. The statement should indicate that the company does not tolerate child labor in any form, and is taking immediate steps to investigate the allegations. It should then refer the media to the company website, where more information can be found about the code of conduct for suppliers. • Together with the crisis management team, begin to analyze the report in order to determine its legitimacy. http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES - October 2010

STORES - October 2010
Editor’s Page
President’s Page
Retail People
Customer Experience
Game Changer
Power Players
NRFtech Recap
Concept 2 Watch
Customized Shopping
Consumer Behavior
Software & Analytics
Crowd Control
Payment Fraud
ARTS Update
Point of View
NRF News
Retail Industry Calendar
End Cap

STORES - October 2010