Let the Response Fit the Scandal

Presented By : Bijoy E.V (bijoyev@yahoo.com)Venue: IBS-Bangalore

Date: 2011 (Dec 18 – Dec 21)Ref: Alice M. Tybout & Michelle Roehm

@ HBR Dec 2009

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Idea in Brief• A blanket approach to scandal management

won’t work. There are too many angles from which scandals might strike.

• An effective response is one that’s been calibrated to the characteristics of the brand, the nature of the event, and the parties being blamed.

• The authors offer a four-step Framework for crafting just-right reactions.

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The Scandal effect

Clearly, scandals can very easily extend beyond the original perpetrators and affect other companies in

the value chain. They also may spill over to businesses outside the value chain that are viewed

as similar to the alleged guilty parties

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A Framework forManaging Scandals

Systematic way to gauge whether they should act immediately or sit tight and wait for the air to clear.

Step 1: Assess the incidento The spill over effect – A company’s own good behaviour does not

guarantee protection from scandal

o The rebound effect. - Public’s attitude toward the original offender may actually become more favourable

o The customers’ mind-set.

Step 2: Acknowledge the problemo Avoid premature statements related to the cause, focus

on the process of investigation, and prevent further harm.

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A Framework forManaging Scandals

• Step 3: Formulate a strategic responseo False allegations - allegation is proved false, the

company should issue a strong denialo True allegations. - If an alleged wrongdoing proves to be

true, addressing it is more complicated and will typically involve some combination of explanation, apology, compensation, and punishment

• Step 4: Implement response tactics.o Based on Customers prospective, Put it to see now the

negative out come can be avoided

• Which issues should be addressed, and at what level of detail?• Who should deliver the response, and with what kind of tone?

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Closing Note

Executives cannot rely on preventative measures to protect them from scandal damage. They must be

ready to respond

Having an executive crisis team at the ready, a contingency budget set aside for crisis response

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Thanks!