Bernstein Crisis
Management
**CRISIS MANAGER**
The Internet
Newsletter About Crisis Management
<01-15-05/ISSN:1528-3836/©2005 Jonathan Bernstein>
Editor: Jonathan Bernstein, jonathan@bernsteincrisismanagement.com
"For Those Who Are Crisis Managers, Whether They Want to Be or Not"
Circulation: 4,000+
Estimated Readership: 14,000+
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"Never interrupt your enemy when he is making a mistake."
Napoleon Bonaparte
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CRISIS MANAGER UNIVERSITY<<
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[Editor's Note: A wise CEO recently asked me to give my
"Crises: How to Prevent Them and What to Do When You Can't"
class to ALL of the employees in his multi-location company
because he agrees with the point of this article -- that the actions
of those in contact with customers/clients can make or break
an organization. Here are two case histories -- one right way,
one wrong way. Although they are about two businesses, I'm sure
that my readers in not-for-profit and governmental organizations
will see how the principles discussed in this piece apply to them
as well.]
CUSTOMER SERVICE -- THE FRONT LINE OF CRISIS MANAGEMENT
By Jonathan Bernstein
If a significant number of your customers/clients get so turned
off by how they're treated that they "vote with their feet and
wallets" and take their business elsewhere, you'd probably
consider that a crisis, right?
The shame is that all too many business leaders:
¤ don't even know when this is happening, as they have no
satisfaction verification system; and/or,
¤ grossly underestimate the power of negative word-of-mouth (which
these days is dramatically enhanced by Internet-centered
communication); and/or,
¤ are arrogant enough to believe that they're so good, or so unique,
that people will continue to use their service no matter how bad
their experience, ignoring the reality that few of them are Bill
Gates.
Let's take a look at two incidents where customer service failed -- one
subsequently handled well by that organization's CEO, the
other handled very poorly.
[HOSPITAL BLUNDER]
Frequent "Crisis Manager" contributor Bob Aronson was recently
motivated to email a letter to the CEO of what I have renamed
"Local Hospital" to preclude embarrassing the institution. Bob's
letter began as follows:
Dear Sir:
Your hospital has a wonderful reputation for cardiac care and so I
am sure you will find this letter about your emergency room
service appalling. I am a very angry patient.
I am a 65 year-old Caucasian male with cardiomyopathy, an ejection
fraction of 15 and an ICD implant. Upon arriving at your
emergency room with all the symptoms of a heart attack, I was
treated rudely and without concern. When I complained that I
might be experiencing a heart attack your receptionist called
security to have me removed from the premises. With the
assistance of my wife, we left Local Hospital and went to Another
Local Hospital, where I was seen and treated immediately. Do I
have your attention?
I am a professional health care brand communications consultant
known by all with whom I work as an even-tempered gentleman. I
have the knowledge, experience and contacts to get the attention
of the news media, regulators and legal authorities if I so
choose. I am sure that such extreme action is unnecessary and
that is why I have chosen to bring this incident of incompetence
and concern for paperwork over patient care to your attention.
On Sunday evening October 25, 2004, while visiting from Minnesota,
I experienced excruciating and radiating pain in my left shoulder,
neck and arm while eating dinner. Because of my severe heart
condition, I quickly made the decision to get emergency help.
Because Local Hospital was closest to our location and because our
hosts made it clear that your hospital had an excellent cardiac
care program, my wife (Robin) quickly drove me to your hospital
emergency room at about 8 PM. I was nearly immobilized with pain
and remained in the car while my wife ran into your emergency room
to get someone to help me into the building. There was no
hospital employee at the reception desk or anywhere in sight.
She waited for several minutes and finally returned to the car
where she assisted me into the ER herself. There were several
waiting patients but no hospital employees. We waited for about
ten minutes before my wife, frustrated by this amazing situation,
entered a "Staff Only" door and told a female staff member that I,
her husband, was in the lobby and may be having a heart attack.
She noted that she needed help because there was no one at the
reception desk. The woman acted unconcerned and told Robin that
she would send someone out. At least 5 more minutes passed before
the same woman meandered out with a clipboard saying we should sit
down and fill out a detailed form. For the second time we
explained my heart condition and my pain to her. The pain was
obvious; I could not move my left arm, I was perspiring and
experiencing shortness of breath. Looking annoyed, she re-entered
the "Staff Only" door still holding the clipboard absent my
information. She did not return for several minutes. When she
did she ordered us (not asked, ordered us) to proceed toward a
window to talk with her. I said, for the third time, "I may be
having a heart attack, please let me see a doctor." Her terse
response, "We have to get you into the system first." In my
agony
and fear, I lost my temper and loudly stated that I didn't give a
damn about her paperwork, I wanted to see a physician." She
repeated that she had to get me into the system first but because
of my attitude she was calling security (I think she pushed a
button under her desk to do so). We were so furious and I was in
such intense pain we left the hospital for Another Local Hospital
despite my condition and the greater distance. Your employee's
attitude was that my medical complaint was getting in the way of
whatever else she was doing. Our estimate is that we spent close
to 30 minutes in your emergency room.
[end letter extract]
Bob's letter then explained in some detail how the other hospital
had seen him promptly, diagnosed the problem (fortunately not a
heart attack) and treated it appropriately.
Just minutes after Bob's email was sent, this email reply came
from Local Hospital's CEO:
Dear Mr. Aronson,
I have just received you letter regarding your treatment at our
Emergency Department. I too am appalled by the events you have
described. What you described is absolutely unacceptable.
Please be assured I will personally investigate your visit to our
ED. Once that is complete, I will be communicating with you
regarding what corrective action we have taken and what we will be
doing to ensure that it never happens again. While we cannot
change what has occurred to you, we will prevent this from
happening again.
Please accept my apology for the action of our associates that
evening. I do appreciate your time and effort to communicate with
me directly what transpired.
[end CEO letter]
Poor customer service, whether institutionalized at an organization
or delivered by inadequately supervised personnel, is seldom
isolated to a single incident. How much business did this hospital
lose, and how much ill will was created, before Bob wrote his
letter?
In Bob's case, at least, the CEO did as he'd promised and, hopefully,
Local Hospital's patient relations has taken a dramatic turn for
the better.
On the other hand, there is the...
[FOOLISH ISP]
There are few industries today as competitive as Internet Service
Providers (ISPs). You might surmise, therefore, that wise ISP
leadership will do all it can to retain customers.
The Bernstein Crisis Management Web site was hosted by a company
I'll rename Strong Regional ISP (because they were a one-time
client and the ethics of naming them is questionable) for a couple
of years after I got tired of fighting my way through Earthlink's
customer service system. Because it was relatively small, it was
far easier to reach technical or executive staff and, for quite a
while, I was very pleased with its service.
Then one day, one of the authors whose publication I feature on my
Bookstore page wrote to say, "What happened to my listing on your
site?" I went to the page -- and found half of the content
missing! I then browsed around the site and found that a lot of
other material had disappeared as well, and that the navigation
buttons weren't working. Since my Web site elicits around 90
percent of my new business, this was definitely a potential
crisis.
My Webmaster, Oliver Del Signore, contacted Strong Regional ISP's
tech support and found that -- to put it simply -- the company had
migrated to a new type of server THAT COULD NOT PROPERLY HOST THE
TYPE OF WEB PAGES I AND MANY OTHER BUSINESSES USE. He was not
given any fix other than to completely re-do hundreds of Web
pages, work for which I would have had to pay.
I sent an immediate, considerate and detailed, "I'm sure you
weren't intentionally causing harm, can you please fix this right
away" email to Strong Regional ISP's Webmaster (who is in charge
of tech support there) with a cc to the company CEO.
No response.
The next day I sent another email to both, and left voicemail for
the CEO.
No response.
The NEXT day I left voicemails for the CEO and one of his senior
execs with whom I had had past contact, and sent email to both of
them and the Webmaster.
No response.
The next day I directed Oliver to move the entire site over to
BAPORT.com, an ISP run by a trusted friend of mine, Skip Pratt.
It was moved, quickly and seamlessly, without even a burp in
search engine ranking.
If I had to guess, Strong Regional ISP simply failed to anticipate
the full effect of its migration to a new server and then got
paralyzed by the flood of complaints which resulted, having no
crisis response plan to deal with emergencies. Whatever the
reason, I have little doubt that it cost them a lot of business
and created a lot of ill-will. Many businesses would not have had
the immediate contact with an alternative ISP and probably took
longer to migrate elsewhere.
ALL THEY WOULD HAVE HAD TO DO to retain my business, at least
until a fix could have been found, would have been to send an
empathetic and personalized reply. Or call me. Even a second-
best "form letter" that explained why this had happened, that they
had failed to plan for the impact, and asking for customer
patience, would have mollified me for a little while.
Instead, by not responding at all, they said, loudly and clearly:
¤ We don't care about you.
¤ We don't want your business.
¤ We're incompetent.
So, while I'm sparing the company from being named here, if any
reader is based in Southern California and wants to know which ISP
to avoid, contact me.
####
[Editor's Note: Rick Boyer and I served on a conference panel
together, where he first presented these ten points that he
was gracious enough to convert to article format at my
request. His guidelines on crisis-related legal actions are,
based on my experience working with attorneys, quite stringent
and not often practiced to this degree. But if you'd rather be
safe than sorry....]
THE TOP TEN LEGAL ACTIONS IN THE EVENT OF A COMPANY CRISIS
By Richard L. Boyer, Esq., Lucas Boyer & Haverkamp, APC
The following ten steps should be incorporated into every
company's Crisis Response Policy. Ensure that all officers and
managers are familiar with these steps, and that they will be
immediately implemented in the event of a crisis.
1. Advise Legal Counsel.
Get your lawyer on board immediately. You need someone
keeping
an eye on the legal issues you currently face or may face in the
future. All company actions and statements in response to the
crisis should be vetted by your lawyer.
2. Suspend Electronic Communications.
Email communications within your company are discoverable.
Don't
create evidence for opposing parties. An email should be sent
to
all employees who communicate via email within the company stating
that, on orders of legal counsel, the topic of the crisis is off
limits for email communications until further notice.
Employees
and consultants handling the crisis who need to communicate via
email should copy legal counsel on every email, and each such
message should carry this label at the bottom:
"This email message is for the sole use of the intended
recipient
and may contain confidential and privileged information. Any
unauthorized review, use, disclosure or distribution is
prohibited. If you are not the intended recipient, please
contact the sender by reply email and destroy all copies of
the original message."
3. Suspend Internal Memos Regarding the Crisis.
Internal memos are discoverable. In whatever manner is most
effective, communicate to all pertinent employees that, on orders
of legal counsel, issues pertaining to the crisis are not to be
communicated via memo.
4. Prohibit Unnecessary Discussion Regarding the Crisis.
Unless communications take place with legal counsel present, all
communications are discoverable. If employees are required to
testify about the crisis, they may be forced to reveal the
specifics of any discussions they had regarding the subject,
including the identities of the participants in the discussion.
The safe course is to prohibit all unnecessary communications
regarding the crisis within your company.
5. Suspend Records-Destruction Activity.
Immediately suspend your records-destruction procedures until
your legal counsel authorizes their resumption. You are
legally
obligated to preserve evidence if litigation or a criminal
investigation is anticipated. Destruction of evidence is a
serious charge whether made in a civil or criminal proceeding.
6. Back Up Your Hard Drives and Store Offsite.
Electronic discovery is becoming commonplace. To avoid
disruptions to your business in the event of a subpoena, search
warrant, or demand for production of your computer hard drives,
immediately back them up on suitable media and store the back-ups
offsite.
7. Identify, Segregate, and Secure Pertinent Documents.
All documents pertaining to the crisis will eventually be
required. Do not wait for the subpoena, demand for
production,
or law enforcement serving a search warrant to begin
collecting these documents. The disruption to your business
will be minimized if all pertinent documents are collected and
secured in segregated files in an organized and thorough manner
before the crisis escalates. An employee who can verify and,
if
needed, testify about the thoroughness of the collection effort
should be designated the custodian of these records. Within
these segregated files, further segregate and clearly label
all attorney-client privileged documents.
8. Have Legal Counsel Interview Pertinent Employees.
While memories are fresh and unaltered by gossip and communal
reflection, your lawyer should interview all employees with
knowledge pertaining to the crisis. Having the lawyer conduct
the interviews should guarantee the information elicited will
remain confidential. If possible have outside counsel perform
this task to avoid the possibility your corporate counsel will
become compromised and the interviews become discoverable.
9. Report the Crisis to Appropriate Governmental Entities.
If your business is subject to oversight by a governmental agency
or agencies, report the crisis immediately. Even if such
reporting is not required, keeping them in the loop about
developments will help to avoid antagonizing them.
10. Contact Your Insurance Company.
Provide early notice to your insurance carrier to avoid a
denial
of coverage due to untimely reporting. Some insurance
coverage
is triggered if there is even a possibility that coverage
might
apply, so even if you are certain the crisis does not trigger
coverage, tender the matter to your insurer and let it
provide a
written denial.
[Richard Boyer, a founding shareholder of Lucas Boyer & Havercamp in San
Diego, has more than 15 years as a litigator, with a practice focused in
the areas of Long Term Care and Business Litigation. Contact:
(858) 535-4000 or rboyer@lbhlawfirm.com.]
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CRISIS MANAGER BUSINESS ANNOUNCEMENTS (Blatant
Self-Promotion)<<
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TELESEMINAR: CRISIS MANAGEMENT & THE LAW
How PR Pros & Lawyers Can Work Together Effectively
Featuring Richard Levick and Ed Novak
February 23, 2-3 p.m. Eastern
I am VERY excited to be re-starting my teleseminar series with a
subject many of you think is "hot" -- Crisis Management & The Law
--
and two stellar co-presenters. Whether attempting to prevent or
respond to crises, constructive and successful interaction between
attorney and public relations professional can significantly
enhance results. Conversely, if they're butting heads, the results
can be disastrous. Wise attorneys know that public relations
considerations must be included in a CEO's deliberations, and vice
versa. Not just when faced with litigation, but also when engaged
in other sensitive transactions.
[About My Presenters]
In this teleseminar, I will play "talk show host/interviewer,"
with my call-in audience also being encouraged to ask questions
of:
RICHARD S. LEVICK, ESQ, the President of Levick Strategic
Communications (www.levick.com), the worldwide leader in legal media.
The firm has managed the media in nearly 3,000 legal matters and
crises, representing nearly half the 100 largest law firms in America
and their highest profile clients. Front page engagements have ranged
from the Catholic Church and Guantanamo Bay, to Rosie O'Donnell and
Napster. Richard and his firm have published acclaimed books,
including Stop the Presses: The Litigation PR Desk Reference.
His articles appear regularly in publications throughout the
world: For the Defense, Legal Times, The European Lawyer, Mealey's
Emerging Toxic Torts, Law Practice Management, and Asian Counsel,
among others. Richard gives over 50 speeches a year on litigation
communications and crisis media. This year, for example, he
keynoted In House General Counsel conferences in China, Hong Kong,
Australia, India and New Zealand as well as dozens of speeches
throughout the U.S. He is a frequent commentator on radio and
television on high-profile cases. PR News honored Richard Levick
as the Public Relations Professional of the Year for US Agencies
in 2002. He holds a master's degree in Environmental Advocacy
(Communications) and a Juris Doctor degree.
EDWARD F. NOVAK, head of the White Collar Crime practice at "top
100" law firm Quarles & Brady (www.quarles.com). He has extensive
jury, non-jury and appellate experience in criminal defense matters,
complex civil litigation and government agency investigations in
several areas including healthcare, environmental, procurement fraud,
RICO and securities. Ed's recent experience includes representation
of a prestigious national health care organization in a multi-federal
district and multi-state investigation into patient billing fraud;
defense of a Big Five accounting firm in multiple simultaneous
proceedings in federal and state court involving both civil and
criminal litigation; defense of a publicly held mutual fund
company in connection with a federal fraud probe; defense of
municipality in a fraud probe alleging civil rights violations;
defense of a national home builder in connection with a multi-
district federal and multi-state investigation of clean water act
violations and representation of a large national retail
securities firm in connection with a federal and state
investigation into the fraudulent sale of oil and gas limited
partnerships. He has also provided expert witness testimony on
issues of ineffective representation in criminal cases and legal
malpractice in civil cases. Ed and I have worked together on a
number of crisis management situations.
Questions to be answered will include:
¤ If the attorney and PR person disagree, to whom should the CEO
listen most closely?
¤ When do PR considerations outweigh legal considerations, and
vice versa?
¤ What types of legal matters require close collaboration between
legal and PR counsel?
¤ What can a PR person do when dealing with an attorney who just
doesn't "get it" with regard to crisis communications?
¤ What can an attorney do when his client doesn't seem to understand
the need for complementary PR?
¤ What are some "right way/wrong way" examples that illustrate
the
principles of effective crisis management in legal matters?
There are also at least two marvelous giveaways associated with
this teleseminar: "Stopping the Presses: The Litigation PR Desk
Reference" co-authored by Richard Levick, and the 30-page "Guide
for Responding to Governmental Inquiries" by Ed Novak and other
members of his White Collar Criminal practice group.
Cost: $95 for as many people as you can crowd around a speaker
phone. A CD-ROM recording will be for sale post-teleseminar at
the same price. To register and obtain more information, go to:
http://www.thecrisismanager.com.
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PLAIN ENGLISH DISCLOSURE<<
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Bernstein Crisis Management LLC has formal or informal co-promotional
and mutually beneficial business associations with a number of the
services we mention periodically in this newsletter. No, we
can't go into details because that's confidential, proprietary, etc.
But our relationship is NOT "arms distance" and you should know that,
since we regularly write about these services as we use them for
crisis and issues management or other purposes. That said, you should
also know that Bernstein Crisis Management sought the relationships
because its staff is convinced that these services are the best of
their kind for Bernstein Crisis Management's needs and those of its
clients. If you have any questions about these relationships, please
contact Jonathan Bernstein, (626) 305-9277.
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ABOUT THE EDITOR & PUBLISHER<<
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Jonathan Bernstein is president of Bernstein Crisis Management LLC,
http://www.bernsteincrisismanagement.com, a national crisis
management public relations agency providing 24/7 access to crisis
response professionals. The agency engages in the full spectrum of
crisis management services: crisis prevention, response, planning
& training. He has been in the public relations field for 22 years,
following five-year stints in both military intelligence and
investigative reporting. Write to
jonathan@bernsteincrisismanagement.com.
Bernstein Crisis Management LLC is located at 1013 Orange Avenue,
Monrovia, CA 91016. Telephone: (626) 305-9277.
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GUEST AUTHORS are very welcome to submit material for "Crisis
Manager." There is no fee paid, but most guest authors have reported
receiving business inquiries as a result of appearing in this
publication. Case histories, experience-based lessons, commentary
on current news events and editorial opinion are all eligible for
consideration. Submission is not a guarantee of acceptance. Format
submissions as MS-Word documents using Courier New 12 pt font. Top,
left and bottom margin 1", right margin 0.8".
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Articles in "Crisis Manager" were, unless otherwise noted, written
and copyrighted by Jonathan Bernstein. Permission to reprint will
often be granted for no charge. Write to
permission@bernsteincrisismanagement.com.
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can be found at:
http://www.bernsteincrisismanagement.com/newsletter.html.
A collection of articles about Crisis Management can be found at:
http://www.bernsteincrisismanagement.com/articles.html.
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When I find a site that I think will be useful to my readers or
site visitors, I put it here:
http://www.bernsteincrisismanagement.com/links.html
If you have a site that would be of specific use to crisis managers
and want to discuss a link exchange or other cooperative effort,
please write to me, jonathan@bernsteincrisismanagement.com.
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All information contained herein is obtained by Jonathan Bernstein
from sources believed by Jonathan Bernstein to be accurate and
reliable.
Because of the possibility of human and mechanical error as well
as other factors, neither Jonathan Bernstein nor Bernstein
Crisis Management is responsible for any errors or omissions. All
information is provided "as is" without warranty of any kind.
Bernstein Crisis Management and Jonathan Bernstein make no
representations and disclaim all express, implied, and statutory
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including, without limitation, warranties as to accuracy,
timeliness, completeness, merchantability, or fitness for any
particular purpose.
Unless due to willful tortuous misconduct or gross negligence,
Jonathan Bernstein and Bernstein Crisis Management shall have no
liability in tort, contract, or otherwise (and as permitted by
law, product liability), to the user and/or any third party.
Under no circumstance shall Bernstein Crisis Management or Jonathan
Bernstein be liable to the user and/or any third party for any
lost profits or lost opportunity, indirect, special,
consequential, incidental, or punitive damages whatsoever, even if
Bernstein Crisis Management or Jonathan Bernstein has been advised of
the possibility of such damages.
A service of this newsletter is to provide news summaries and/or
snippets to readers. In such instances articles and/or snippets
will be reprinted as they are received from the originating party
or as they are displayed on the originating Web site or in the
original article. As we do not write the news, we merely point
readers to it, under no circumstance shall Bernstein
Crisis Management or Jonathan Bernstein be liable to the user and/or
any third party for any lost profits or lost opportunity,
indirect, special, consequential, incidental, or punitive damages
whatsoever due to the distribution of said news articles or
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has been advised of the possibility of such damages. Authors of
the original news story and their publications shall be
exclusively held liable. Any corrections to news stories are not
mandatory and shall be printed at the discretion of the list
moderator after evaluation on a case-by-case basis.
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