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Trust comes in many flavours, and in a developed market economy trust should in the best of worlds be an unambiguous concept. It isn’t. The most obvious difference between ‘trust’ and ‘trust’ in a developed market economy is the one you find in the number of connections or degrees between you as a consumer and the product/provider.

1st degree trust can be defined as direct contact with the provider. You know the provider, and you trust them. This makes you buy their product.

2nd degree trust is contact via referral. You know the referrer and you trust him/her, hence you trust the provider. This makes you buy their product. Not as willingly as a 1st degree, but a buy is a buy.

But a regulated market economy put forth more complex trust scenarios since you may also get additional sets of 1st degrees, which is what we at nielsenandcompany.com calls the marketer’s wet dream. The most common example is when the provider needs to follow a set of rules and regulations that confirm the quality of the goods you buy, rules and regulations that the customer is aware of - rules and regulations that reinforce the actual sales of the goods. If you when using this 1st degree trust as a provider, you will get a doubled 1st degree trust. But if you end up in a critical situation, this may become a double-edged sword.

In Sweden we have an interesting sequence dealing with minced meat where a provider’s representatives have created new best before-dates in order to sell out-dated minced meat one more day. The sequence consists of stressful, extraordinary as well as critical situations since now the customers don’t trust the provider (1st degree) due to the fact that they’ve actually broken the law (broken their second 1st degree).

In order to deal with this, the company in question started out blaming it all on their processes and not on the behaviour of their management and their employees. Major mistake, because they by doing so didn’t address both sides of the double-edged sword. The sword in this case consists of rules/regulations and behaviour non-supportive of the rules/regulations as well as non-supportive of the company brand.

In this case, it all boils down to behaviour.

If you erase your trust with your customer due to behaviour, you need to rebuild trust with new behaviour. Forget all you’ve read about communication strategies, repeated corrected behaviour is what it takes. When repeated behaviour has been established, you can start communicating it e.g. by engaging your advertising agency or you PR-agency.

For more info from a multi-disciplinary consultancy on how to solve it, feel free to contact us.

Just wanted to share this pitch (early sales stage) which was sent off today dealing with an organization’s brand. We would love comments from professionals or non-professionals reading this blog:

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Dear xxx

thanks for a nice conversation some days ago and a nice phone chat today.

Common history and possible common future

To follow up, as I told you, I’ve been perusing your site and been reflecting the site against your brand in order to see connecting points. As a consequence of our meeting and my actions, I would love to give you a few suggestions on how you can enhance your brand making your message come through - even to the sceptics now disabling their listening abilities when hearing your organization’s name.

On your company

I really hope that you don’t mind me giving this sales pitch, but I see that the Gordian knot is not letting us (nor any other consultant) get in as an external know-it-all saying the whats, the whos, the this and the thats. Your organization has come this far using its potential and it will get even farther, but our experience tells us that too often the organization’s potential is not fully utilized. In other words: We know that you know how to use it, but you just don’t know it - yet.

On nielsenandcompany.com

Our professional background forms the belief that we don’t believe in external know-it-alls - which from time to time can create a conflict with us being referred to as the external know-it-all. We prefer seeing potential customers utilizing our cross-disciplinary knowledge in letting you as an organization - and in your case the ideological POV - work yourself towards creating a platform that will make it easy for you to get across. In that way we also enable you to do it several times - with or without us.

The next action

Instead of starting my email with a specific phrase, I’ll end it with it: “Just say when you want to hear more, and we’ll find a time and a place.”

You have a great day,

Mr Nielsen

When working with a sequence involving stressful, extraordinary and critical events and situations, one of the challenging issues is making the management understand what they are facing and the impact it may have on the company. To do so in a very simple manner, you can use the three-layer golf-ball as a metaphor.

Any stakeholder you ask will say that companies can be summarized into three simple statements: (1) What the company is - The brand; (2) What the company can - The organization; and (3) What the company does - The output.

You don’t need to be a golf player to understand that the golf ball’s shell can be compared with the output, output as in products, services and everything else that is visible for all stakeholders. The next layer, which is a little softer in a golf ball, often functions as an enhancer as well as a “glue” between the shell and the core. Very much just like the organization functions, as a reinforcer making it possible to execute the brand into an output. Finally you have the ball’s core, which symbolizes the company brand. The golf ball’s core is the one that creates the long drives - just like the brand is the core that creates the long-term company.

So, how can this metaphor help management in assessing the impact of a crisis? Well, you just need to find out where the ball got damaged. Did you get a dent in the shell? Did you have an eroding mid-layer resulting in for example a non-performing organization? Or did you in fact build the company on non-existent values making the core an empty one?

Wherever the damage is, you need to correct it in order to have a ball going straight - to continue doing your business. But remember that the closer the issue comes to the core, the more wiggling and unstable the ball will be when set in motion making the long drives impossible. And finally, it is a complete waste of time and efforts to use your communications skills or communications channels to explain the reasons for the ball wiggling as long as you don’t rectify the problem causing the wiggling.

But what about the users of the golf ball - the customers and the other stakeholders - don’t they matter? They do, but that’s another blog story.

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This blogpost is the extreme summary of a three hour talk from the
multi-disciplinary business consultancy nielsenandcompany.com
on how you prepare against and deal with risks, issues and crisis.

Contact us for more information.

People choose to use the word ‘crisis’ when describing highly distressful matters. “We have a financial crisis.” “We have a production crisis.” “We have a crisis in our organization.” “We have a PR-crisis.” “We have a _____-crisis.” Feel free to fill in the empty spot, but before doing so, check out what happens when you do so.

Although ‘crisis’ may seem as a fitting description for the individual, or a very effective way for newspapers to sell more copies, it is a very ineffective word when dealing with the matter at hand due to its vagueness and its negative emotional impact. ‘Crisis’ connotates and creates fear, and fear is the most effective vehicle in disabling the individual’s potential of finding and implementing solutions.

Although consultants at nielsenandcompany.com don’t mind you - nor our competitors - using the C-word, we prefer to describe whatever our clients are facing as “a sequence of events or situations creating a pressure for stakeholders that can be defined as stressful, extraordinary or critical”. Such a definition does not sell newspapers - “The company is facing a series of stressful, extraordinary and critical situations due to accusations regarding child labour” - but it takes away the unprecise definition the C-word brings with it.

As a consequence the definition reduces the emotional pressure the C-word normally instigates, hence providing a better environment for finding a solution. Our client starts to understand that we as a team face a series of issues to deal with and we can get to work solving one issue after another. And of course, we can give the customer an exact price in providing solutions for each issue instead of a lump sum for a ‘crisis’ they perceive having no control over.

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Feel free to download and check out the free preview of Fix It! A book focussed on your company when preparing against and dealing with corporate risks, issues and crisis.

Fix It! Preview Edition

If you would like to buy and read the book, click here. Please remember that if you are a registered customer at nielsenandcompany.com, you can claim your free copy.

Yes, what’s up with Ericsson?

I got the question on the phone from a friend of mine a couple of weeks ago. He was driving through Sweden while talking to me.

- Their five year plan has expired, I replied, using my gut feeling in combination with my knowledge of Ericsson the last 10 years. - They probably haven’t updated it.

- What do you mean?

- Obviously they predicted some problems in 2001, which made them create a 5 year plan remedying the problems based on an analysis of current status. The plan commenced rather immediately. I remember a lot of friends with leading positions at Ericsson that had to go during that period. The problems hit real hard the year after, 2002, and Ericsson stuck to the plan making the cure a little easier. A “qualified” guess is that the cure hasn’t been updated all along. Now we see 2007, and here goes…

- Sounds like hindsight if you ask me.

- Sure, hindsight it is. When dealing with hindsight, I promise that we’ve got 20/20 vision as all other consultants. But you asked me a question regarding current status and not Ericsson’s future. A better question from you would have been: What’s the next move from Ericsson?

- Uhh?

- Let’s go back to 2001 and 2002 and see if we can learn from history where they can go. In 2001 and 2002 the mobile phone industry was experiencing a fierce positioning. They still do. But nevertheless, Ericsson made some strategic choices that were successful when dealing with restructuring. But probably, during the process which included saying good bye to some of their employees, some advisors went the same way hence making it difficult for Ericsson to keep up with an ongoing positioning and re-posititioning. Actually I think they haven’t been doing their homework with their stakeholders the last couple of years. Stakeholders meaning their markets and their customers. Yes…I am not only talking about the stakeholders as the ones bringing them money financing their next move, the ones suing them right now, but the stakeholders buying their…

Our phone call dropped. Still the phone industry hasn’t solved the issue when the person you are talking to is driving into a tunnel in the middle of nowhere.

There is a lot of turbulence going on in the stockmarket. The most turbulent can be seen with Borse Dubai’s possible take-over of OMX.

OMX is resistant and treats the take-over as hostile, since OMX would prefer to be partnered up with NASDAQ.

Sometimes it can be wise to skip the short-term protect-your-own-sphere perspective, and change to a long-term co operate-with-potential-partners perspective.

The key to a potential solution could easily be found if the three parties accepted the fact that it is better to cooperate than end up in what you could call an expensive massmedia dead-lock, as the situation is per now. The form of cooperation could be a more substantial cross owning of each other’s shares. This would give the parties a chance to become better acquainted in order to explore the joint venture before a potential merger.