Reputation Management and The PPP Loan Disaster

Reputation Management and The PPP Loan Disaster

Reputation Management and The PPP Loan Disaster: How Some Large Companies and Banks Alienated Small Businesses — An Opportunity to Make Amends

Update 4/23/20 — Since yesterday, more of the large companies that received PPP loans have vowed to return them, including Kura Sushi, Sweetgreen, Ruth’s Chris Steakhouse, and DMC Global.

Update: 4/21/20, 3:00 PM — Steve Mnuchin said in a press conference that large companies will have to return the PPP loans they took or prove they meet the criteria to receive them. Harvard University will also have to return its $8 million PPP loan. More funds were approved for PPP loans for small businesses.

Update: 4/20/20, 6:30 PM — There are now class-action lawsuits filed against Bank of America, Chase, US Bank, and Wells Fargo.

4/20/20 – When the U.S. Congress approved the Payroll Protection Program (PPP) to allow the U.S. Small Business Administration (SBA) to distribute $350 billion to small businesses in March, the criteria seemed to be clear. This was meant for businesses with fewer than 500 employees, most of which would have greater difficulty accessing funding to see them through the coronavirus pandemic than would larger companies.

On April 17, it was announced that Ruth’s Chris Steakhouse (Ruth’s Chris) received a PPP loan for $20 million, Potbelly Sandwich Shop (Potbelly) and Shake Shack each received PPP loans for $10 million, despite each having at least 10 times the 500-employee limit for the loan and reporting annual profits in the multi-millions. As public companies, their financial statements are publicly available. Understandably, there are lots of enraged small business owners who did not receive PPP loans because funds were exhausted.

After I wrote the first draft of this article on April 19, it was announced that Shake Shack had returned the $10 million PPP loan they received. The company issued a statement that explained that they had initially based their eligibility for the loan on the fact that each of their locations had fewer than 500 employees. However, when they learned that other companies who could use the money more, they decided to return the loan and secure funding elsewhere. It will be interesting to see if other companies follow suit.

What Were They Thinking?

With no public statements issued to date in response to the backlash from Ruth’s Chris or Potbelly, people are left to speculate as to why these large, well-funded public companies, would apply for PPP loans in the first place. One might venture to guess that this was a decision made only with financial security in mind and without consideration for the potential damage to the companies’ reputations, let alone the damage to other small businesses that could not survive without a PPP loan. Such decision-making is very short-sighted.

The Damage is Already Occurring.

Some people view the actions of these companies in this way: there is a shortage of bandages and while some small businesses are bleeding out right now, some bigger businesses are stockpiling the bandages in case they need them in the future. You can read the angry comments on social media posts with hashtags like #boycottruthschris and #boycottpotbelly. There are also negative Yelp reviews about what people are calling a “corporate money grab”.

Banks Are Also Being Blamed.

JP Morgan Chase (Chase), the bank that issued the loans to Ruth’s Chris and Potbelly, is also receiving some blame from small business owners that believe these large businesses received preferential treatment in the PPP loan-decision process. Some are asking why these loans were approved and question whether the bank favored companies that owed them money. Chase is now experiencing its own reputation-management issues as #boycottchase is used in many social media posts from incensed small business owners that are demanding transparency about the bank’s loan allocation process.

Wells Fargo is receiving similar vitriol on social media with #boycottwellsfargo hashtags used by disgruntled small business owners that applied for PPP loans early only to be later notified that funds had run out. A lawsuit has been filed against Wells Fargo that alleges that they reprioritized the applications to serve larger companies before smaller ones.

Decisions Made Solely Based on the Bottom Line Can Backfire.

When a business makes a decision solely on financial gain and without thought to the effects of that decision on public perception or actual harm to others, there are often disastrous consequences. This is never truer than during times of crisis. Companies, or individuals for that matter, that appear to be overly opportunistic at the expense of others are judged especially harshly. At times like this, actions and optics are extremely important.

Appearing to exhibit corporate greed and using public funds meant for companies that truly need it to survive or appearing to favor your big-money clients can have high financial costs. Unless they do something very soon, these companies are likely to lose revenue from boycotts, reputational damage and, possibly, experience reduced stock valuations based on decreased revenues and negative media and social media coverage.

When Many Companies Are Giving, No One Likes a Taker.

With so many companies giving money, resources, and time to help others during this pandemic, anything that could be viewed as corporate greed seems especially egregious by comparison. As people share positive stories of companies quickly reconfiguring their facilities to manufacture much-needed equipment and products, donating money, food, hotel rooms, and other items to help our first responders and ordinary citizens to get through this pandemic, no one wants to support businesses that appear to be taking advantage of the situation.

There Is an Opportunity to Repair the Damage, to Some Extent.

While some people will never forgive these companies for their actions, there is an opportunity for them to repair their reputations and move forward with a demonstration of greater sensitivity to their fellow humans.

Here is a simple, three-step plan that Ruth’s Chris and Potbelly can follow: 

  1. Give the money back.

To some, this may seem extreme, but large companies that received PPP loans and return them immediately could repair damaged reputations and may prevent boycotts and future sabotage from an angry public.

  1. Issue a heart-felt apology with action steps.

The apology should include specific actions the company is taking to make amends and provide help during the pandemic and, possibly, thereafter. Shake Shack’s fast action in returning the funds and the company’s public statement about their initial reasons for applying for the loan and then returning it serve this purpose.

  1. Include public affairs/public relations professionals in decisions that involve public funding.

There is a long history of U.S. citizens expressing outrage over the use of public funds to prop up large companies. The decisions companies make in these situations are NOT solely financial. They have major repercussions. Companies should be proactive and include the right team members to offer different perspectives on the potential consequences of their actions so they can make better decisions in the first place.

The Banks Should Also Take Quick Action.

Chase and Wells Fargo should be transparent about their PPP loan application process. When I asked a representative of Chase on April 17 if they processed the applications of larger companies first, she said that they did. The SBA had indicated that these loans were meant to be processed on a first-come-first-served basis, so this was not the response I was expecting.

Chase and Wells Fargo can easily clear up any allegations of unfair treatment to small businesses by doing the following:

  1. Publish the loan numbers of the companies that received funding in sequential order.

They would not have to release any private information about the companies to do this.

  1. Explain how they came to the conclusion that these large, public companies should receive the loans that they did.

This is especially important given the fact that they are public companies with other sources of funding and they do not appear to the funds to keep their operations going and their employees paid during the pandemic.

  1. Be transparent about PPP loan-processing procedures going forward.

They should share a concrete plan that will ensure transparency and adherence to SBA rules regarding the allocation of PPP loans going forward.

  1. If they are in the wrong with their practices, they should issue a heartfelt apology.

Doing this before the truth is revealed when public records are shared by the SBA would be the best course of action.

Will it Work?

Doing nothing will surely lead to further damage to the reputation and, most likely, the bottom line of each of these companies. Some people will never forgive these companies for their actions and will do everything they can to destroy their reputations and businesses, but some will forgive them if they do the right thing.

Quick action, such as that taken by Shake Shack will put the company back in many people’s good graces. Many Americans like stories of growth and redemption, and they can be understanding when people admit to a mistake, especially when it was due to a misunderstanding. Some people hang onto their grudges, so there is little one can do about that.

The banks will have a more difficult time regaining people’s trust because people take their money and, thereby, their survival very seriously. In any case, repairing or minimizing damage and setting the course for a better future is always a good strategy.

Lisa Elia, the author of this article and founder and lead trainer at Expert Media Training, provides services crisis communication services, media training, presentation training, investor pitch coaching, and other communication services.

For a complimentary consultation contact our office at 321-821-3088.

Or, email us at team@expertmediatraining.com.

Would you like more tips and articles delivered straight to your inbox? 

Click here. 

Communication Matters logo; newsletter by Communication Expert, Media Trainer, Presentation Trainer, and Investor Pitch Coach Lisa Elia
Lisa Elia, Media Trainer, Presentation Trainer, and Communication Expert, and Founder of Expert Media TrainingThis post was written by Lisa Elia, a media trainer, presentation trainer, pitch coach, communication expert, and speaker. She trains clients around the world for media interviews, speeches, internal and external presentations, panels, investor presentations, and promotional videos, and provides executive and team communication coaching.

With more than 25 years of experience, Lisa has prepared clients for interviews with TODAY, GMA, The Wall Street Journal, CNN, ESPN, and hundreds of other outlets. Lisa has shared her expertise with national media outlets that include Inc., Entertainment Tonight, E!, and many others. Clients include entrepreneurs, Fortune 500 companies, and everything in between as well as athletes, celebrities, and other public figures.

 

To arrange a complimentary consultation with Lisa, click here.

Four Steps to Prepare for Business Reopening During COVID-19

Four Steps to Prepare for Business Reopening During COVID-19

Four Steps to Prepare for Business Reopening During COVID-19

Now Is the Time to Plan for Changes in Procedures and Communications

With all of the adjustments that most companies have made to respond to the COVID-19 pandemic, it’s easy to focus primarily on the challenges in front of you. However, for business leaders, this is precisely the time to think about the shifts you will need to make to do business when social distancing mandates have lifted. You can take the same approach to planning for business reopening during COVID-19 that I use when working with clients to create both a general communication plan and the health-related component of a crisis communication plan. Communication planning is best when it is customized, but here are four steps that most businesses can follow.

Four Steps to Prepare for Business Reopening During COVID-19

1. Identify risk perceptions and misconceptions.

2. Identify actual risks.

3. Examine and upgrade procedures.

4. Communicate about upgraded procedures internally and then externally.

As you dive into each step more deeply, it can be beneficial to get input from team members at various levels of your organization through quick surveys or checklists. Here are the four steps with more detail.

  1. Identify Risk Perceptions and Misconceptions.

Go through every step of an interaction that a person might have with your business and consider what your customers or clients, employees, and others might believe are the risks to their health. These perceived risks may or may not be valid, but by addressing them properly you can help allay people’s fears.

Consider that many people’s attitudes about personal health and hygiene may be forever changed. During the social distancing mandates, many people will have become accustomed to the perceived safety of their homes where they can control their environments. When social distancing mandates are lifted their fears concerning the virus and germs, in general, won’t simply vanish.

A new, higher standard of hygiene will be expected by many people from all walks of life. If you question whether or not health and hygiene habits change with new information, consider the behavioral changes that people have made in response to scientific studies. To cite some examples of old behaviors that have changed: smoking used to be allowed on airplanes (and in almost every environment), bobbing for apples was a party game, and just about no one used to wipe down the handles of grocery carts. History has shown us that people can and do adapt to change and expect it when it protects their health and wellbeing.

  1. Identify Actual Risks.

Four Steps to Prepare for Business Communications After COVID-19 from Expert Media TrainingIdentify points of surface-contact and face-to-face human interaction that are required in your business.

Take inventory of items that might be shared, such as coffee machines in offices, pens, or touch-screens where visitors sign in at a business office, and the more obvious door handles, retail store counters, dining tables, and restrooms.

  1. Upgrade Procedures.

Now that you have identified risks and perceived risks, develop procedures to address them, and to enforce compliance with your new and existing hygiene practices.

If contact with a surface is necessary, determine how the surface can be cleaned in a way that is sustainable in terms of labor and materials. If phone apps, motion-sensor technology, or other methods of eliminating surface-contact are possible, consider them.

Regarding face-to-face human interactions, we will probably all need to follow the lead of health professionals once social distancing has ended. Of course, this will vary greatly from industry to industry.

Replace items that are shared with safer alternatives. For example, if you have a stack of coffee cups near your office coffee machine consider replacing it with an enclosed cup dispenser.

Determine whether extra staff members will be needed to uphold your new hygiene standards and how this you’re your affect costs, organizational chart, and training procedures.

Consider changing your hiring practices to find employees who have the psychological makeup to comply with your new hygiene practices, if necessary.

If you produce products, create measures to ensure that manufacturers adhere to your hygiene standards, such as occasional live virtual tours to see the production or packaging of your products in real-time.

Talk to your vendors to find out what they are doing to maintain or improve their hygiene practices.

  1. Communicate About Upgraded Procedures Internally and then Externally.

Once you have determined the changes you will have to make regarding procedures, consider how you will communicate them to your staff, vendors, manufacturers, customers, clients, and other people who will be affected. These communications can include:

      •  ∙ internal communications, such as memos and training handbooks and videos;

         ∙ vendor hygiene-adherence agreements;

         ∙ contract revisions and amendments with manufacturers;

         ∙ and external communications with customers, clients and the general public, such as emails, texts, social media posts, videos, press releases, ads, and content on your website.

Be clear about the changes you are making in your products, services, and/or procedures in an effort to protect people’s health. In times of uncertainty, people crave certainty. Be resolute about the things you can control that will affect them.

Four Steps to Prepare for Business Communications After COVID-19 from Expert Media TrainingAdjust the tone of your communications to meet people where they are in terms of emotional state and practical concerns at the moment and projected into the near future. Infuse your communications with warmth, hope, and the emotional components of your brand. Backed up with solid plans and actions, your words will have more meaning.

 

Lisa Elia, the author of this article and founder and lead trainer at Expert Media Training, provides services creating communication plans, media training, presentation training, investor pitch coaching, and video communication skills training.

For a complimentary consultation contact our office at 321-821-3088.

Or, email us at team@expertmediatraining.com.

Would you like more tips and articles delivered straight to your inbox? 

Click here. 

Communication Matters logo; newsletter by Communication Expert, Media Trainer, Presentation Trainer, and Investor Pitch Coach Lisa Elia
Lisa Elia, Media Trainer, Presentation Trainer, and Communication Expert, and Founder of Expert Media TrainingThis post was written by Lisa Elia, a media trainer, presentation trainer, pitch coach, communication expert, and speaker. She trains clients around the world for media interviews, speeches, internal and external presentations, panels, investor presentations, and promotional videos, and provides executive and team communication coaching.

With more than 25 years of experience, Lisa has prepared clients for interviews with TODAY, GMA, The Wall Street Journal, CNN, ESPN, and hundreds of other outlets. Lisa has shared her expertise with national media outlets that include Inc., Entertainment Tonight, E!, and many others. Clients include entrepreneurs, Fortune 500 companies, and everything in between as well as athletes, celebrities, and other public figures.

 

To arrange a complimentary consultation with Lisa, click here.

Crisis Communication Tips

Crisis Communication Tips

The following crisis communication tips are meant to provide you with your initial steps. If you need help managing a crisis, call us at 321-821-3088. Or, email us at team@expertmediatraining.com.

 

Crisis Communication Tips to Get You Started

 

Crisis communication tip #1: Don’t hide.

If a situation that reflects negatively on you, your client or your company has become public knowledge and the media are contacting you for a comment, here are some steps to follow:

Do not answer questions from the media on the spot, but do take their calls and tell them you will get back to them within a certain timeframe, whether it’s minutes or hours, but try to do it quickly enough for them to meet their respective story deadlines. Stall tactics rarely work. If the media print or broadcast that you did not respond to their requests for information, the public may assume you’re guilty or that you have something to hide, which is not what you want.

Create a statement and responses to the questions you may be asked by the press. In the heat of the moment, you may not think as clearly as usual. Enlisting the aid of experts who are objective and forward-thinking can help you to contain and manage the situation most effectively.

 

Crisis communication tip #2: Control contact with media and the public.

Don’t allow your staff members or team members to speak with the press about the situation. Ask that your family members and friends do not do so either. Only your designated media spokeperson(s) should address the media.

Ideally, employees, vendors and others should have been advised not to speak to the media on your behalf. Perhaps they have even signed confidentiality agreements, as does everyone who works in our firm. However, it’s good to remind them of your policies during times of crisis.

 

Crisis communication tip #3: Take responsibility when appropriate.

There are times when it’s best to assume responsibility and quickly address what you are doing to rectify a situation. For example, if you sold a product that turns out to be faulty, consult a lawyer about what you should and should not say about it, but do address it. You can recall the product through news alerts that you send to the media and distribute it through social media, if many have been sold. If only a few products have been sold, you can contact the customers directly and offer them a refund or a replacement of the product.

The worst thing you can do is ignore the situation, which can lead people to hire lawyers, investigate further and generally make a bigger deal of something that could have been kept in check with some simple communication.

 

Crisis communication tip #4: Listen.

Sometimes the best way to prevent a situation from becoming a crisis is to listen. Listen to people’s complaints and comments, even if there is nothing that can be done about them.

For example, if you have said something regrettable to someone who is now making a public issue of it, apologize to the person directly, which may make the situation go away: sometimes people just need to be heard.

If the issue continues to become more public, seek professional help to address the situation. This is not a time to wing it, and professionals can help you create a clear message and make a plan for damage control and containment.

 

Crisis communication tip #5: Take action.

Explain how you are taking action to address the situation. For example, if one of your staff members has said something inappropriate to someone, craft a specific response that explains why this is not in accordance with your company policy and how the employee is being reprimanded (or dismissed, in some cases). If you have implemented new policies due to this situation, explain what they are.

 

When crises arise, the most important thing to do is to not panic. Then, get the help you need to create a swift and thorough crisis communication plan.

 

To arrange a complimentary consultation to discuss your crisis communication needs, call us at 321-821-3088.

Or, you can email us at team@expertmediatraining.com

Plan Ahead by Creating a Crisis Communication Plan Before You Need It

The best time to work on your crisis communication plan is before a crisis arises. You will have greater clarity of mind without the pressure of a crisis, so you can effectively strategize on how you will address each audience, from employees to customers, to investors or other stakeholders.

If you’re a service provider, crises can arise from several situations, including being discredited publicly, a verbal misunderstanding, or the use of a poor choice of words. If you produce a product, crises can arise from a fault in your product, problems with distribution, or questionable manufacturing procedures, among other things. These things can happen to individuals or companies of any size, from one-person shops to the largest corporations in the world.

For celebrities, athletes and other public figures, how a crisis is managed can make the difference between preserving or losing lucrative endorsement deals and prospects.

Planning ahead will help you to feel more in control and prepared for just about anything.

 

To arrange a complimentary consultation with Lisa Elia, the author of this article and the founder of Expert Media Training, call us at 321-821-3088.


 

Lisa Elia, Founder & Lead Media Trainer & Presentation Trainer at Expert Media Training®This article was written by Lisa Elia, a Los Angeles-based media trainer, presentation trainer, communication expert and speaker. In addition to helping clients with crisis communication management and planning, she trains clients for media interviews, speeches, investor presentations and promotional videos. With more than 20 years of experience, Lisa has prepared clients for interviews with Today, Good Morning America, The Wall Street Journal, CNN, ESPN, and hundreds of other outlets. Lisa has been interviewed and shared her expertise with national media outlets that include Inc., Fox News, Entertainment Tonight, E! Entertainment and many others.

To arrange a complimentary consultation, call us at 321-821-3088.

Or, you can email us at team@expertmediatraining.com


 

Humor, Hubris and Hiccups – Thoughts on Wording

Humor, Hubris and Hiccups - blog post on wording by Media Trainer Lisa Elia

In an age where photos and graphics are used to tell stories, it’s interesting how words, and wording, are no less important than they were in the past.

Consider how a quote can make its way around the Internet, crossing time zones and continents.

Make it funny and people can’t wait to share it.

Your voice as a writer and speaker emerges and continues to develop over time.

What you choose NOT to say is just as informative of your brand as what you do say.

Is complaining part of your brand?

Is talking about how tired you are part of your brand?

Probably not.

The way you present yourself to others and the way you treat others, with your pen and your presence, shapes your brand.

Do you think people seem smarter when they’re putting down others?

Do you love it when you read something that shows someone has passed from confidence to arrogance?

Probably not.

If your words are not perfectly composed, do you want people to pin you to a wall for it?

When you’re speaking in public, do you want people to laugh if you stumble?

Probably not.

It makes it easy to know what others want when you look at things this way.

This is what it comes down to:

Humor is welcomed by most, understood by some, and disdained by few.

Hubris is disdained by most, understood by all, and welcomed by few.

Hiccups happen–figuratively in our writing, or literally, when we’re speaking. We’re not always going to be perfect. How you handle hiccups is what matters.

Go back to the humor, perhaps.

As you become more publicly known, you can still be yourself, but show the world the best version of yourself.

Want additional tips, thoughts and advice on wording? Check out these blog posts:

I’m Just a… And Other Undermining Statements to Avoid – Communication Tips from a Media Trainer

How to Avoid Using Jargon in Media Interviews and Communications – Tips from a Media Trainer

Authenticity and Your Message – a Note from a Media Trainer

Glossary of Media Interview Terms – from Los Angeles Media Trainer Lisa Elia

 

Crisis Communications Following Natural Disasters

If your company has been affected by Hurricane Sandy, create a communications plan to address the concerns of each target audience–employees, clients and customers, investors, shareholders. Address how the company is taking measures to restore strength and make up for lost income and productivity or property damage.

People want to experience a company’s awareness and receive assurance in times like these.

For more detailed information on creating a crisis communications plan, read our previous blog post on this topic.

To arrange a free consultation, call us at 321-821-3088.

Or, you can email us at team@expertmediatraining.com

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