09/13/2010 11:54 am ET Updated May 25, 2011

The C-Factor: How Credibility Plays a Role in Crisis Management

Imagine your organization:

  • becoming the target of a class action lawsuit alleging fraudulent marketing practices; or,

  • being accused of creating a hostile workplace environment; or,

  • learning, without advance notice, that it is the target of an investigation by a state attorney general.

    Not a great worry yet, you say, because there are two sides to every story, right?

    No. Issues don't have only two sides, and no matter how well crafted the message, the credibility of the messenger -- what I call the "C-Factor" -- is as or more important in terms of impacting your stakeholders. Let's look at some of the potential stakeholders for any of these situations:

    • Organization's executive team (and their families)

    • Other employees (and their families)

    • Shareholders

    • Board of directors

    • Customers/clients

    • Vendors

    • Municipalities that depend on revenue from and/or interact with your organization in some significant way

    • Residents of municipalities that depend on revenue from and/or interact with your organization in some significant way

    • Competitors (yes, they definitely have a stake in what happens to you, albeit a "reverse stake")
  • All of them have their own points of view on your crisis situation, and all of them are going to be expressing their points of view to everyone they know.

    In the absence of issues-specific information from you, each of your stakeholder groups is likely to come up with its own conclusions and opinions about what is actually happening.

    And each of them, as groups or as individuals, have their own "C(redibility) Factor." Like the famous "Q-Factor" associated with recognizable celebrities, I'm suggesting that everyone has a C-Factor -- the degree to which they are credible to others. When any stakeholder speaks about an issue, his/her/their C-Factor impacts the extent to which their messages are believed.

    I will leave it to the research and statistic experts to quantify C-Factor, but I can offer some experiential and subjective observations about the importance of considering the C-Factor:

    Matching the C-Factor to the audience. Who's going to be most believable speaking to employees? Is it the CEO? In some organizations it might be, in others it might be a lower-level manager. Who should speak to shareholders? The chairman of the board? The CFO? There must be a situation-specific analysis of their C-Factors.

    In a consumer versus business complaint/issue, the consumer always starts with a higher C-Factor in the court of public opinion. In the wake of everything from Enron to Worldcomm, Toyota to Tiger Woods, even once-lauded Johnson & Johnson, and many others, suspicion of business motives and practices are high. If a consumer sounds credible, and is already starting with a higher default C-Factor, the business has to do a lot of work to balance perception. If the consumer sounds like he or she is ranting, they lower their own C-Factor. If the consumer hires a reputable law firm, his/her C-Factor goes up. If a law firm known to take "just about anything" on a contingency basis takes the case, the consumer's C-Factor may go down.

    C-Factors can combine or be enhanced through association.. If an organization or individual with a high C-Factor endorses a business' honesty or products, the business' C-Factor is raised. On the other hand, if those opposed to the organization or individual have their complaint supported by a high C-Factor organization (e.g., Sierra Club, ACLU), then the opponents' C-Factor gets a bump up.

    C-Factors are not necessarily based in reality. Some individuals, because of their personal charisma, have a high C-Factor, sometimes even after they have committed publicly known "sins." Witness Bill Clinton or Marion Barry. Ditto for some organizations, such as the Better Business Bureau, whose fact-checking is, in my extensive experience, woeful, and whose record-keeping is often inaccurate and dated. Yet if there are "BBB complaints" against your business, consumer reporters automatically think that you're in the wrong.

    We, as crisis managers, must consider C-Factors when deciding "who should talk to whom" and whether certain strategies should be employed. Real or not, they play an important role.