I’m sitting in a local coffee shop sipping my second espresso and now feel suitably fueled up to pen my second blog on the Co-op Bank saga. Events have spectacularly developed over the last week with the arrest of the former chairman, Paul Flowers, on drug related charges. The resignation of the chairman of the Co-op Group, Len Wardle, who appointed him has only resulted in feeding the flames of this fire.
The whole event has taken a political twist after it emerged that Mr. Flowers had allegedly agreed funding from the bank to Labour’s Ed Balls. This week has been like watching an episode of Casualty. How much more blood can be spilt by the Co-Op and how much damage is this doing to the parent brand? It seems that a large part of the blame is being put firmly in the Co-Op’s hands. A survey by YouGov saw 45% of people blaming the board who appointed him. For me, there are two issues emerging from the chaos.
An ethical stance
The first is about how to put the ethical stance back at the heart of the brand. As the banks website states “As a Co-operative business, we believe in ethical values and in putting our money where our mouth is. We have worked on numerous campaigns and projects all over the world as we put our ethics into action to make a difference”. It seems that the company has forgotten its own brand values. Where do the values talk about chasing profit, running up debt, corporate social irresponsibility or about drug taking and expense fiddling? Ethics are what make the Co-operative brand different and the company now needs to come out fighting. To do this it needs to focus on its heritage, history and core values and do this much stronger than ever before. As consumers we are going to need to be reminded of what makes the Co-operative group different and be convinced that the current issues are a one off. There is a lot of brand equity in the Co-operative, now is the time to cash some of it in. It’s time to get your best advocates working hard for you and it’s time to demonstrate to us all the work you do behind the scenes, including charity and good causes.
Managing a Crisis
What I find excruciatingly painful to watch is the Co-op’s media response to this crisis, and what appears to be an inability or naivety in managing the bad news. First, they went on the trail of ‘let’s drown the bad new with some good news’ by announcing the opening of their new £100million office in Manchester. Which was a lot like announcing that the Titanic has just sunk and saying “well at least we are insured.” And now, nothing, absolutely nothing on the website and no real response to or in the media. It’s been left to the Labour party to defend the co-operative movement, which seems bonkers to me. Crisis management is critical to managing your brand integrity, as every service business knows. How you deal with complaints is critical to your brand’s perceptions. Can you imagine Richard Branson not commenting and Michael O'Leary’s recent announcement to step back from public comment demonstrates their commitment to and understanding of their brands.
For me there are three rules of managing a crisis such as this.
First, make sure you have a credible spokesperson. If it’s not the Chairman or Managing Director it needs to be someone very senior from the communications team. This is important as it ensures there is only one official response and one channel for the media to contact. It means that you can grab the agenda back with press conferences and medial releases and interviews. Second, don’t bury your head in the sand. You need to be actively commenting, actively addressing the issues, even if you don’t have all the answers. You need to be saying something or the void will be filled by the medial and their spin on events. Lastly, go on the defensive and defend what you know to the true. Tell people about all the good things that you are doing and ensure that your voice is heard.
What recent events at the company demonstrate is that all brands need to ensure they are true to their core values and must not stray from what lies at the heart of why they are here. It demonstrates the importance of planning for the unforeseen and not being afraid to stand up and defend what you believe in and what you know to be true. Let’s hope that the Co-operative can pick itself-up and move forward stronger as a result.