Several years ago, the communications director of a high street bank was surprised to find his organisation’s name on a list of FTSE 100 companies that had suffered a recent crisis, as stated on the marketing flyer for a media training company. Confused, he contacted the owner of the business making such claims.

The crisis, he was told, related to a disgruntled customer bricking up the doorway of his local branch of the bank. For one of the country’s biggest financial institutions, that wasn’t a crisis. It was simply the type of issue it dealt with every day.

It also proved a welcome relief because, ironically, the amateur brickie wasn’t even the bank’s customer. No.

He was upset with a different bank on that high street after it rejected his small business loan application, but, having spotted a police car outside dealing with a different matter, decided, rather than wasting the bricks, to vent his frustration on its rival.

Indeed, he later told his local newspaper that he had ‘nothing against’ the bank he’d vandalised; it was simply ‘plan B’.

And the moral of the story: one man’s issue is another man’s crisis.

But let’s not talk about men and their issues…

A new report from FleishmanHillard argues that companies are being overwhelmed by ‘compounding crises’.

The snappily titled Leading in the era of the Compounding Crisis [Fleishman’s emphasis], claims that crises are no longer isolated incidents: they are constant and compounding. In fact, 99% of the 150 business leaders surveyed claimed that they faced multiple, simultaneous crises in the past year; half see it as a regular occurrence. (Me, I’d argue that many of the crises cited are issues with better PR.)

But here’s the thing. The report lists 14 risks that these business bosses fear, ranging from cyber attacks to employee misconduct. Yet, having recognised these, in the majority of crises, fewer than half those surveyed feel ‘highly prepared to respond to this risk’.

In fact, the ones they feel most secure in managing are ‘dealing with customer service failures (55% say they are ready, perhaps from experience), while 54% claim they’re prepared for ‘coordinated disinformation’ and 54% are ready for ‘product safety issues’.

(I imagine the bosses of Tylenol (Kenvue) were similarly sanguine until a certain orange-coloured president made unsubstantiated claims linking the painkiller’s use by pregnant ladies to autism.

After all, the Tylenol response in 1982, when former owners Johnson & Johnson recalled all products when seven people died after taking painkillers laced with cyanide, is held up as an exemplary crisis response. But I digress.)

The bosses’ biggest fear: 91% believe a cyber attack has the greatest potential to ‘severely damage EBITDA [or as I like to call it, earnings before everything that is a deduction] and/or market capitalisation. Yet only half feel prepared to respond to this risk.

I’m sorry. What? You fear it but you don’t know how to deal with it? Er, isn’t that your job? Either you 1) are ignoring the advice of your corporate affairs officer, 2) employ a corporate affairs officer who is unaware of this risk (don’t at me: I know these people don’t exist), 3) arrogantly think it won’t happen to you, or 4) assume you know it all.

But as a boss, you are failing in your fiduciary duties if you don’t at least do some rudimentary crisis scenario planning. (Incidentally, I imagine leadership at Marks & Spencer, Co-op and Jaguar Land Rover all had prior training in cyber-attacks… which makes you wonder what the impact would have been without.)

Other issues they fear that have the potential to impact profitability, such as customer service failures (90%) and employee misconduct (79%) all relate to culture, which after all comes from the top!

The report suggests that 72% of these unprepared CEOs believe their role in driving trust in the business has never been ‘more critical’, while 63% believe they are more heavily scrutinised in the way they handle internal issues, such as workplace culture or diversity, and 60% claim they stakeholders are more vocal in critiquing their performance than ever before.

This report is a corporate affairs officer’s ‘reasons why you should listen to me’ manual. (I know it wasn’t intended for that: Fleishman prefers to position its findings as a ‘reasons you should employ our services’ opus…)

It also highlights the gap between a CEO’s recognition of the potential impact of an crisis (or issue) and their naivety in how these can be mitigated.

Unless you’re Gerald Ratner standing on a stage telling the audience that your products are crap and last no longer than a prawn sandwich, this gap has the potential to shrink. It just requires your CEO swallowing their pride. (Stop laughing at the back! Show them this report.)

PS: This is the statistic that makes me giggle.

Almost eight in ten (77%) CEOs worry about the impact of ‘leadership behaviour’ on the bottom [no pun intended] line, which unless it relates to a finance director cooking the books or a legal adviser playing hard and fast with the rule book, usually means their own illicit relationship or inappropriate behaviour, but only 47% claim they are prepared to deal with the outcome.

In other words: the rest are simply in denial that they will ever be found out.

PPS: I am being a tad hard on FleishmanHillard: it is a really interesting report, with lots of practical advice.

CORPORATE REPUTATION

Who is controlling your corporate narrative?

It’s an interesting question in these days of large language models and generative AI.

A company in dispute with its union recently asked ChatGPT about the disagreement. To its surprise, the union’s version of events was fed back. The union controlled the narrative.

At the recent Corporate Affairs Summit in Dublin, Phil Ryan, head of digital strategy at our sponsors Sodali & Co, asked delegates if they had asked a generative AI model a simple question: tell me about the company I work for.

Its response is the new reality.

As Ryan put it: corporate reputation is now, in part, determined ‘by a machine and the information it decides to use, the bits it ignores and the tone of voice it chooses to present that information back’.

Sodali & Co has spent the past six months resource testing major generative AI models, asking six questions about hundreds of companies.

1. Tell me about this company?

2. Tell me about the CEO of this company?

3. What’s the investment case for this company?

4. Is this company a good place to work?

5. Had this company faced any issues or criticisms?

6. Is this company a good partner or good to do business with?

It found that, in the event that the model cannot find any reasonable information, it seeks out lower, quality websites that comms departments likely have dismissed in the past.

This meant that, for one client, each of the AI models dismissed it as one of the worst companies to invest in, in terms of capital employed. In reality, the company was one of, if not the best, in its sector in this area.

Sodali also found that, despite the expense and effort afforded to companies’ corporate websites and digital estates, for many these represented just 10% of the sites used by LLMs to respond to queries. Others were luckier, accounting for as much as 40% - but that was the maximum.

While many recent reports on generative AI have claimed that earned media dominates in LLM searches, Sodali found that national media coverage only tended to be referenced when asked about companies’ issues or criticisms they faced. And unexpectedly, it discovered that supplier testimonials actually moved the LLM needles.

While there is an argument that GEO is simply another form of SEO and it’s still all about keywords, Sodali’s analysis found several subtle differences which are worth bearing in mind.

• Lack of real-time indexing: LLMs may not reflect the current status of a specific website page

• Cached content: LLMs may be referencing cached pages, or those which are no longer available

• Reliance on training data: Many LLMs were fed on training data that was a moment in time

• Prompt issues: The structure of a prompt may result in an out-of-date page being referenced until it is replaced

• Insufficient technical context: While search engines understand when a page has been moved, removed or edited, it is unclear whether LLMs have similar expertise

This means it is more important than ever to audit your digital estate.

Is anyone doing anything really clever in AI? It’s the question I’m constantly asked.

I would say that the more savvy corporate affairs directors have already done (or are in the process of doing) what Ryan advocates.

They are discovering their organisation’s vulnerabilities, and working to tackle these. They are also in the midst of re-writing corporate websites in a format that LLM models favour (think listicles and executive summaries) while removing outdated pages that could negatively impact GEO searches. It’s not rocket science.

ODDS & SODS

📢 Well, here’s a thing: new research into ‘boasting on LinkedIn’ suggests it can mask incompetence. Whaddaya mean? All those AI gurus may not actually be, er, gurus? As for those CEOs who get up at 5am to meditate and run a pre-breakfast marathon, are they, er, lying?

Researchers at Tsinghua University in Beijing studied the LinkedIn posts of financial analysts and found that those who deliberately talked themselves up were more likely to make incorrect forecasts. This was especially true for those who were less experienced, had fewer LinkedIn followers or were, no kidding Sherlock, men.

The researchers claimed the ‘strategic self-promotion behaviour aimed at compensating for skill gaps and increasing visibility’. 🤥

🛏️Forget duvet days. A study of 2,000 business owners found that 35% had fewer staff sick days after they actively encouraged employee team sports. The others reported torn ligaments, twisted ankles and black eyes… oh, sorry. I made that bit up.

Unispace, a company with a ‘mission to be your trusted partner in creating experiential spaces - across physical and digital environments - that deepen connections, foster a sense of belonging, and propel success’, has (unsurprisingly) found that workers want less noise and distraction, with 75% saying these hinder performance, and more spaces designed around calm, comfort, and customisation.

More worryingly, one in four say their workplace isn't comfortable while 21% report their space doesn't support their role. If only there was a company with a mission ‘to be your trusted partner in creating experiential spaces’….

📰 Watching ITV’s The Hack about the Guardian’s Nick Davies’ investigation of the News of the World’s hacking scandal, I’m reminded of two things.

One, a story about a former Downing Street adviser who arrived at a journalist’s leaving party with a briefcase stuffed with sensitive documents. Left unattended, it proved too tempting for certain hacks, who proceeded to ‘borrow’ said briefcase, and examine its contents in a secure venue. Result: a handful of ‘topical’ articles, and a hastily negotiated détente. I hope said adviser is more circumspect this time around.

Two, the drama reveals Davies’ frustration at other media outlets failing to following the story. As Paul Murphy, investigations editor of the Financial Times, recalled at a Luncheon Meet event I hosted last year, hacks need to leave something on the table for their peers to follow. Or to ‘gift’ them the day two story…

🙊 It’s a new broom at Unilever, where Michael Stewart, formerly of the parish of PwC, joins as chief corporate affairs and communications officer. And I hear it’s all change at Diageo, following the departure of global brand and communications director Brendan O’Grady.