Lumber Liquidators was the subject of this week’s crisis, as the company has seen its stock price take a wild ride down and back up after allegations raised in a ’60 Minutes’ story. The story alleged the laminate-flooring material sold by the company didn’t meet emission standards for the chemical formaldehyde. The story prompted one U.S. senator to call on federal agencies to investigate, and the company’s stock plunged as a result of the negative coverage.
Vincent Schiavone, executive chairman, ListenLogic: “Rule number one: Don’t make things worse! That is exactly what Lumber Liquidators did by agreeing to an on-camera interview. Lumber liquidators is experiencing an attack crisis in the digital world where consumers, media, activists, lawyers, regulators and politicians are aligned as stakeholders on an issue damaging to the reputation and value of the company.
“While the strategic goal driving stakeholders, short sellers and tort lawyers seems to be financial in nature, the enabling trigger issue is the health and safety of ingredients in the product. The core issue driving the conversation is corporate profits at the health risk of the customer.
“Lumber Liquidators chose to participate in the ‘60 Minutes’ story, something they should not have done. Often putting senior executives on the spot in an interview puts the company at greater reputation risk than issuing a statement. A written statement would have been less damaging. If a company is going to respond to an attack issue they need to be prepared to answer the key question: ‘What did you know and when did you know it?’ That answer determines if you can or want to apologize, take responsibility, reassure that all is OK and promise it will never happen again.
Read the entire piece here.
This week the crisis experts looked into the comments from the New England Patriots and how they are handling the controversy over deflated footballs. The team’s coach, Bill Belichick denied any knowledge of deflating game balls, then held a second press conference in which he talked about the science of deflation and made a reference to the 1990s comedy “My Cousin Vinny.”
Vincent Schiavone, executive chairman, ListenLogic: “[This] is not really about under-inflated balls…it’s not even about the larger questions: ‘Did the Patriots and coach Belichick get caught cheating again?’; ‘Does nice guy Tom Brady cheat?’; ‘Do all teams and all quarterbacks prepare their balls outside of the official rules?’ All communications from all involved parties are focused on one thing–the Super Bowl. The Super Bowl is big business, the most watched and most valuable sporting event in the U.S.
“All parties are handling it the best they can under the circumstances. The number one rule of all crisis communications is to not say anything that will make the situation worse. Any admission by Mr. Brady, Mr. Belichick or the Patriots would force the NFL to do something about it before the Super Bowl. The driving strategy for this crisis communication is ‘Do not do or say anything that may impact the Super Bowl!’
“Mr. Belichick’s response that he had nothing to do with the balls and ‘You will have to talk with Tom” was not so good. Neither was his response he looked into the process and then presented plausible explanations as to why it could happen. The coach is seen as distancing himself from the crisis and throwing his [quarterback] under the bus.
Read the entire piece here.
ListenLogic Co-Founder and CEO, Vince Schiavone, recently presented at The Wharton School’s SEI Center for Advanced Studies in Management’s Annual Board Meeting. The executive session, titled ‘Bridging the Silos – Revving Up for the Next Big Thing,’ took place at the Kimmel Center for the Performing Arts and featured a wide array of session on topics ranging from the NFL to political campaigns.
Vince’s featured session, titled ‘Big Data Social Intelligence: Reducing Risk, Building Brands and Driving Growth With Social Media’ focused on how the crossroads of big data and social media is revealing unprecedented valuable insights and opportunities for companies and is becoming instrumental in growing and protecting corporations and their brands.
Participants in the session included executives from organizations like Advanta, Estee Lauder, Hewlett-Packard, The Milken Institute and SEI, among many others.
The Wharton Schoolâ€™s SEI Center for Advanced Studies in Management was founded in 1990 and was designed as the first â€œthink tankâ€ on the future of management education. Previous presenters include Peter Drucker, Kenichi Ohmae, Percy Barnevik, Esther Dyson and John Seely Brown.
ListenLogic Chief Strategy Officer, Mark Langsfeld, recently hosted a focused webinar on the growing social risks and threats facing companies across the Food & Beverage industry. The session, which runs under 30 minutes, was attended by a myriad of leading brands across the food and beverage sectors and discusses an array of topics on social risk, including:
– Product recalls
– Extortion attempts
– Liability claims
– Employee sabotage
Mark also reviews how leading providers of food and beverage products are strategically protecting themselves against the growing social dimension of enterprise risk.
The key takeaways of this webinar include helping you to understand the complex social threats facing Food & Beverage companies, reviewing specific food and beverage social crisis cases and the corresponding lessons and providing insight into strategies and best practices for advanced brand protection.
If you’re interested in viewing a replay of the webinar please click the link below.
ListenLogic’s recently released book Avoiding #FAIL: Mitigating Risk, Managing Threats and Protecting the Corporation in the Age of Social Media has already been featured twice in the Wall Street Journal’s Risk & Compliance Journal. The first feature, entitled “Executive Gaffes, Amplified”, discusses how executive and corporate missteps are getting amplified on a daily basis across social media. The piece features ListenLogic’s Avoiding #FAIL book as a unique, powerful resource for executives to understand the social dimension of enterprise risk to manage and mitigate a growing variety of complex social threats ranging from sabotage and extortion to brandjacking and impersonation.
The Morning Risk Report points to Avoiding #FAIL as a strong example of this growing social corporate risk growing trend in the fact that the book features over 100 case studies of social threats against and missteps by corporations and executives. The cases include companies like Apple, ESPN, Google, LinkedIn, Netflix, McDonald’s, Southwest, Starbucks and Target. Avoiding #FAIL serves as a handbook to help executives and corporations understand the emerging social dimension of enterprise risk and how to effectively detect, track and mitigate these threats.
The Wall Street Journal also wrote a feature entitled “Where Companies Go Wrong With Social Media” and focuses on ListenLogic’s perspective on enterprise social risk and how our advanced social intelligence and threat detection solutions help corporations protect themselves against the myriad of growing social threats. ListenLogic’s CEO, Vince Schiavone, explained to WSJ Editor Nick Elliot, â€œMost large corporations havenâ€™t evolved their understanding of social media, the amount of damage it can cause and how quickly that can happen.” He went on to explain, â€œThe risk of not properly understanding and monitoring [social media] is increasing every day.â€
To get your copy of the Avoiding #FAIL book click here.