Skeletons in the Closet Pose a Contemporary Risk to Reputations
Most crisis communications plans focus on contemporary reputational threats and don’t consider ghosts from the past. That can be a tragic mistake in an age when the past is no longer hidden or silent.
The History Factory has conducted research indicating a majority of corporate executives underestimate the threat posed by skeletons in their organizational closets. As many private and nonprofit organizations are discovering, the revelations can be a devastating blow to reputations – and bottom lines.
Jason Dressel, president of the History Factory
Jason Dressel, president of the History Factory, a non-traditional PR agency that helps entities assess and address their heritage, says overlooking questionable past behavior is a dangerous road to travel unaware in an “era of rapidly shifting societal norms and standards”.
“For consumers surveyed, learning of a company’s past support for divisive social or political causes or environmental negligence was most problematic,” Dressel writes. “That doesn’t line up with executives’ expectations” who are focused on crises related to “racial injustice, sex, gender discrimination and financial improprieties.”
The agency’s research indicates 60 percent of consumers would no longer use a product with a dark shadow in its past, while 42 percent said they would evangelize to others to avoid those products as well. A majority of executives mistakenly assume consumers would come back if they took corrective action.
Consumers don’t have much faith in the standard corporate playbook when it comes to the emergence of problematic action from their pasts, a sign that company leaders should re-examine their plans.
Dressel says typical crisis response doesn’t fare well in cases when old skeletons suddenly resurface. “Consumers don’t have much faith in the standard corporate playbook when it comes to the emergence of problematic action from their pasts, a sign that company leaders should re-examine their plans,” he says. “Executives highly favored company leadership personally acknowledging the wrongdoing, but consumers appear skeptical of that approach.”
The excavation of the past in the present adds stress to corporate, nonprofit and college communications staffs that already are stretched thin dealing with unfolding COVID-19 issues. Dressel insists the risk is too great to ignore. He points to a recent Saturday Night Live sketch that lampooned efforts by brands such as Aunt Jemima and Uncle Ben and big names like Lloyd’s of London and JPMorgan Chase to come to grips with their “problematic pasts”.
The place to start is the crisis response plan by expanding the risk audit to include legacy issues. According to Dressel, those issues can include shady or predatory business practices, workplace discrimination and safety, human rights violations and environmental damage.
Do more than a casual search, he advises. “Do the research into media coverage, internal communications, annual reports, court filings, academic studies and publications (both published and unpublished).” Don’t overlook exploring the backgrounds of founders and donors whose names are on walls or whose statues grace entrances.
When you uncover questionable conduct, it’s important to apply a contemporary standard to evaluate. This is less a matter of passing judgment than anticipating how the conduct could be judged on social media or by key stakeholders.
The final step in risk assessment, Dressel says, is to apply context. Are past questionable practices still persist? Could the practice recur or was it a one-time incident? “Context is critical to understanding how threatening the discovery may be and how to respond,” he explains.
After the heritage risk assessment, one or more crisis scenarios should be developed, with special attention given to critical constituencies, sources of good advice, potential remedial action and trusted messengers.
One of the unsung values of a thorough risk assessment as part of crisis preparation is to identify actions that can be taken now to reduce risk. When it comes to skeletons in the closet, the inclination may be to let them stay in repose. But Dressel argues that approach is increasingly untenable. He urges a proactive approach to discover the old bones of current-day vulnerabilities and take corrective action.
Expect skepticism and cynicism as opposed to praise when trying to compensate for past misdeeds by removing a name or donating to a relevant charitable cause. As Dressel observes, skepticism and cynicism may be a lot less painful than an explosive disclosure that rocks the foundation of your reputation.
[This blog draws on a column written by Jason Dressel that appeared on ragan.com.]