An industrial dispute can be a rigorous test for any organisation requiring a thorough understanding of the key players and the issues at stake. Handled badly, disputes can escalate and company brands can be forever tarnished.
It only takes one disgruntled employee to cause a media backlash which can be devastating for any company waging a serious war for customers. But how can disagreements be prevented from escalating, and if they do, how can the storm be weathered?
In 2001 Marks & Spencer announced the closure of its 18 French shops, leading to a French, indeed international, outcry and prompting the introduction of a new French labour law. Marks & Spencer ended up paying millions of pounds to compensate the 1,200 members of staff who were made redundant. The media backlash was severe.
Five years on, many respected household names are still risking turning themselves into apparent corporate monsters through bad publicity.
This year, Sainsbury’s has been sued by Louise Tarbuck for disability discrimination. Tarbuck is asking for over £1m in compensation. Tarbuck suffers from ulcerated colitis and believes she was unfairly dismissed and furthermore that Sainsbury’s failed to make adjustments to her role given her disability. Sainsbury’s deny the allegation, but the media machine has already converted this into a high profile battle.
What these cases illustrate is that while companies may know the letter of the law, and may have put in place sophisticated policies and practices, legal compliance is not enough. Businesses need effective communication strategies which inform and engage employees, not only to preserve morale, but crucially to protect brand reputations and public good will.
To deliver successful and effective communication, businesses have to have a credible business strategy that outlines a business reality from a customer and external viewpoint. They also need to be clear about what they want to deliver, why they are different, why this will succeed and what their values are. Above all, they need to be consistent in their approach. They need to recognise the wants and needs of their internal audience (their employees) so as to align motivation with corporate ends, assess how their message will be received and handled and decide who will be responsible.
Finally, they need to have measures of success. Tried and tested methods of gauging internal communications include conducting a risk assessment which audits employee perceptions and feelings, producing a senior management plan of action, setting up staff or work councils and regularly reviewing the same to ensure that there is buy-in from all sides.
Honest dialogue with recognised employee representatives is also critical. Staff surveys, suggestion schemes, newsletters, and corporate challenges all assist, while legacy structures, recruitment, pay reviews and diversity issues all have to be dealt with in a congruent way. Even if circumstances prevent companies from becoming the ‘employer of choice’ they can at least win a reputation for honesty and fair dealings.
Should a crisis unfold, the PR staples of formulating the messages which resonate with different audiences and delivering them to the right ears are vital to keeping one step ahead of the game. Handled well, potential publicity disasters can be diffused and even exploited to help them emerge in better shape than before. As the saying goes, a crisis is an opportunity in disguise.
The key to crisis communications is preparedness and speed; indeed, the former enables the latter. It is important that a company has a crisis plan, has trained spokespeople to be ready with the messages it wants to communicate and to make sure systems and channels are in place for the delivery of the messages to key stakeholders in the story – employees, employee representatives, major clients and investors, journalists, community leaders.
At the outset of a crisis, management should form a crisis team, identify the players and audiences and begin to work out its position. This can be tricky, given partial or imperfect information. While it may be too early to make a full announcement with journalists hot on the trail, stonewalling will only give others the initiative in moulding general perceptions of the situation, so a holding statement is needed.
The purpose of the holding statement is to buy time, but it must not feed the story by being overly defensive or too bold. First breaks of the story frequently define all future coverage of the events.
Viable holding statements might contain an expression of concern, commit the company to finding out the facts, promising action and restating values. They should never admit liability or make conciliatory offers such as compensation. The core message should be simple, airtight and capable of furnishing examples.
Timing and effective communication are crucial. One ill-considered action can escalate tensions and wipe out good-will, polarising the “them and us” atmosphere. For instance, it may be necessary to satisfy the markets with a release forecasting staff cuts to the financial press, but the workforce must also be considered. Failure to do so may lead to employees first hearing of job losses in the newspapers. This can wreck internal relations and become a story in itself to drive a fresh set of organisational woes. In many instances the media can communicate with the workforce far quicker than management!
Employee disputes and industrial action will remain a minefield to be picked through with the greatest caution. However, with a thorough understanding of the legal context and a refined awareness of the art and realities of communication, a problem need not cause lasting damage to a painstakingly constructed business brand.
Gavin Ingham Brooke is the Managing Director of Spada and Ranjit Dhindsa is an employment partner at Reed Smith.
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