In the past two years, Regester Larkin has grown from strength-to-strength, not least in the Middle East where we now have a new office in Doha (in addition to our regional head office in Abu Dhabi) and a client list of national and international companies of which we’re enormously proud.  I’m always happy to talk about Reputation Management in the Middle East at any time; around a boardroom table, with a potential client, at a conference, or simply over a coffee or a shisha.  I can be contacted at rob.sherwin@regesterlarkin.com, and you can still find me on LinkedIn http://ae.linkedin.com/in/robasherwin

Rob

Yesterday, the UAE Telecommunications Regulatory Authority (TRA) announced on its website that BlackBerry services would be suspended within the country as of 11th October.  And today, the story of the UAE government’s dispute with BlackBerry manufacturer RIM is a leading story in publications ranging from the Wall Street Journal and the FT to the BBC’s website.

Whether or not the UAE government is justified in demanding access to the BlackBerry security codes, there are at least two immediate impacts of the TRA’s decision.  The first is the frustration and inconvenience that will be caused to the UAE’s c.500,000 BlackBerry users (and presumably a similar number of BlackBerry-using business travellers transiting annually through Dubai and Abu Dhabi airports) who are now faced either with the prospect of having to buy an alternative smartphone and go through the typically bureaucratic process of switching mobile phone subscription, or at least the uncertainty of not knowing whether the UAE and RIM will settle their dispute before the deadline.

But that’s a relatively minor irritation in the grand scheme of things.  And to their credit, the two government-owned telecoms operators (including Etisalat who kept so quiet during last summer’s troubles) have taken full page adverts in the local newspapers today to try to reassure their BlackBerry customers that alternatives will be made available.

Much more importantly, the decision by the TRA (and we will probably never know the level of higher-up-the-decision-chain support the announcement received) has managed to achieve the sort of front-page press attention that Dubai and Abu Dhabi’s marketing machines can usually only dream about … except that the lingering impression left in the mind of all readers is rather more likely to be concern about a country where the government is so desperately keen to be able to access the personal correspondence of its citizens, rather than a strong urge to visit or invest in the country.

One can only imagine whether the author of the TRA’s press release yesterday had any idea of the global perceptions of his/her employer’s country that would be created today when he/she turned yesterday to the TRA’s web publishing software and pressed ‘Publish’ …

The rather unappetising picture was published by Gulf News yesterday after a Dubai resident found the dead lizard floating in his newly-purchased can of baked beans. The baked beans, manufactured by Kimball, a Malaysian food distributor, were purchased from a local Choithrams supermarket.

The response so far has been swift. The Food Inspection Section at Dubai Municipality immediately pulled all Kimball baked beans from the same batch and has asked the public to call a dedicated hotline number if any further cans from this batch are discovered.  As the regional supplier of Kimball products, Choithrams has been issuing statements and speaking to the media on behalf of Kimball.  Furthermore, the local supermarket chain is acting as the facilitator between Kimball and Dubai Municipality.  Kimball has also sent its own quality control officers to investigate the case.

By the standards of oil spills and plane crashes, this incident may barely constitute a ‘crisis’.  But in food retailing, trust in the product and the brand is absolutely vital.  And when anything goes wrong, the media spotlight will always find on the biggest and most recognisable brand involved. In this case, Choithrams must be commended for assuming responsibility in handling this situation. Kimball is a relatively unknown brand in the UAE and while it is owned by the multinational organisation, Campbell Soup Company, Campbell’s have not involved themselves at this stage.

Choithrams’ willingness to speak about the matter will presumably reassure shoppers that they can continue to shop in the store without the risk of finding further reptilian additives …

Thanks to my colleague Jacqueline for this post.

And yet Sharjah Electricity and Water Authority (SEWA) has absolutely nothing to say.

Indeed, given that the very same disruptions to power supply occurred last year, one might have expected SEWA to have learned from the experience and actively put contingency plans in place.  Of course, one might also have hoped that electricity capacity, or alternative supplies, could have been fixed over the previous 12 months.

It would appear though, sadly, that a government utility monopoly, with no competition (other than from individuals investing in back-up generators) has not felt it necessary to prepare itself over the past year to communicate with its customers should the power shortages reoccur. 

So SEWA’s CEO is unavailable for comment and the company’s PR manager can only respond to the inevitable and entirely predictable media questions with: “If it’s about power outages we have no statement.  We have no comment.“. 

It therefore doesn’t seem entirely unreasonable that Sharjah residents and businessmen are furious, because the only logical conclusion of such a poor corporate response is that the company simply doesn’t care.

Since Thursday morning last week, airspace above Britain and much of Europe has been closed. The cost to airlines, and to the fragile economic recovery, has been huge.

Adding insult to injury is the lack of crisis leadership shown by some of the key protagonists. But, in this unpredictable and unprecedented crisis, where should this leadership come from?

Well, it’s not the airlines. Even the weariest of business travellers and the most frustrated of holidaymakers can’t blame the carriers. In fact, the airlines have demonstrated once again that they are the masters of crisis management. Flights were cancelled, crews billeted, customers kept (largely) informed and attempts made to calm the city. Praise where praise is due.

Leadership in this crisis must come from governments and regulators. But it has been hard to find. Indeed, there has been an elaborate game of ‘pass the buck’ developing. In the UK, for example, the Civil Aviation Authority seems to officially make the call to close/open airspace, but it bases that entirely on the advice of NATS (National Air Traffic Services). In turn, NATS seem to be getting their steer from the Met Office and its Volcano Ash Advisory Centre (a new addition to the list of ‘organisations you never knew existed but are actually quite important’).  So no clear leadership amongst the regulators. What about governments? The EU has been largely absent. The UK government – in the middle of an election campaign – did not grasp the seriousness of the crisis quickly enough. It convened its crisis committee, COBRA, a full three days into the developing situation.

It is hardly surprising, given this lack of accountability, that the decision to close airspace for safety reasons is suddenly being criticised as an overreaction.

It is a situation crying out for leadership. If airspace closure is the right decision, defend it. If intervention is required to help stranded passengers, do it. If change needs to happen to prepare for next time, make it happen. Without this leadership, the risk is that there is a period of directionless drift… not unlike the cloud of ash itself.

Corporate reputations are challenged (and often damaged) not only by dramatic incidents such as those described in my previous post, but also – and more commonly – by people ‘going public’ with complaints about the company.  The front page of the business section of The National today is a fine example: a photograph and article about the frustrations that some tenants are facing in Dubai’s largest shopping mall.  The company that owns the mall was “not available for comment”.  It won’t come as any surprise therefore to learn that this same company – Emaar – that chooses not to comment when its reputation is being so publicly challenged, is the same company that chose to keep quiet when the same mall’s giant aquarium sprung a dramatic leak.

Open communications to acknowledge legitimate criticism and convey your side of the story are important to protect corporate reputation both when something dramatic and sudden happens, and also when mounting criticism reaches the media – and ideally of course, long, long before that point.

I was rather surprised when several of the participants in the room reacted to my supposedly dramatic scenario with comments along the lines of: “I’m afraid that happens rather regularly …”.

And so it was that I was introduced to the world of crisis management and communications within shopping centres.

I was reminded of that session last weekend when I read of the terrible knife attack at a mall in Dubai.  This violent and tragic incident occured only a couple of weeks after the almost comic news that the enormous aquarium at Dubai’s largest mall had sprung a leak.  None of the fish escaped, but I couldn’t help conjuring-up images in my mind of sharks feasting on the sugary sweets in the neon-coloured candy store opposite.

With dramatic armed robberies, and even multiple fatalities in store-opening crushes, it’s clear that – perhaps particularly in this region where so much of life is conducted in indoor air-conditioned public spaces – shopping malls in the Middle East need to be well prepared to respond to dramatic incidents.

If, as in the case of the aquarium leak at Dubai Mall, the management choose to keep quiet about what is happening, they can be pretty certain that there will be no shortage of ‘citizen journalists’ armed with sophisticated mobile phones to report on events, direct from the scene.  This particular video, posted both on the website of Gulf News newspaper and YouTube has been seen nearly 400,000 times.  So if shopping centre managers want to have any chance of seizing the initiative to protect their reputation, they need to be prepared and willing to respond very swiftly to any crises – using all communication channels available to them.  Because, at least in the Middle East, crises in shopping centres are clearly more common than you might think …

I don’t profess to be an expert on financial PR and how and when markets should be alerted to bad news.  But it’s absolutely clear that despite the plethora of blue-chip banking and public relations advisers that Dubai has retained over the past 12 months of financial market turmoil, Dubai spectacularly misjudged its announcements about Dubai World’s restructuring and Nakheel’s debts last Wednesday (and Thursday, and Friday … as the clarifications continued to trickle out).

In reputation management terms, perhaps the greatest ‘learning’ (dreadful word) from the rollercoaster ride of external perceptions of Dubai over the past year, is that whatever you say must be supported by proof points.  Dubai’s rapid rise from unheard-of Arab trading port to international brand recognised by every London cabbie was based largely on the ‘proof points’ of its tourism offering – a 7 star hotel (whatever that really means), a fantastic airline, international sporting events, year-round sunshine etc.

But ever since the credit crunch started to impact Dubai last October, there has been a dangerous lack of proof points.  No amount of ‘positive messages’ was ever going to calm investors’ nerves when so few statistics were ever provided to back them up.  And why would anyone have wanted to put themselves forward as a senior official spokesperson for Dubai when even a rookie journalist would have torn holes in the positive assertions thanks to the lack of supporting evidence.  So the vacuum of official information has been filled with reams of speculation and rumour, such that when a few facts did start to emerge on Wednesday evening, analysts all over the world assumed the very worst.

Brand Dubai may have finally achieved what it wanted – global recognition.  But how sad that for want of transparency and honest proof points, that recognition will in many quarters be something along the lines of: “Oh yes, Dubai, I’ve heard of that place – it’s bust isn’t it?”.

The Dubai-based family-owned jewellery group has origins going back to 1907, but relatively recently raised $270m in an initial public offering on the Dubai International Financial Exchange.  The transition to a public company, from a family run one requires a significant change in attitude towards media, stakeholder and shareholder engagement.  

Damas initially issued only a one line statement to the markets when they suspended trading on Sunday – a rather limited announcement for a relatively major event.

A notice issued on Monday, however, made up for this shortfall as Damas sought to emphasize that it was now fully in control of the situation and committed to ensuring that such unauthorised transactions could not happen again: “The Board remains fully committed to the highest standards of corporate governance, and has implemented procedures to ensure that the repayment is conducted in an appropriate and timely manner and that all transactions are fully scrutinized in the future to prevent a recurrence.”

Whilst this was reassuring, little effort has been made to reach out to consumers, and so far no updates have been made to Damas’ website, or its investor relations pages.  Neither had the company put a human face to the announcement, making no spokesperson available to the press.  Eventually The National was able to track down comment from one of Damas’ board directors in Italy, Gaetano Cavalieri.

As well as putting the shareholders first, listed companies also need to understand the need for greater transparency. It seems that Mr. Cavalieri recognises this, saying, “When a private company, especially a family company, becomes a public company everything changes.The commitments are different. The board is committed to protect its shareholders first.”

Damas now need to be careful that Mr Tawhid Abdullah does not become a scapegoat for the issue.  Statements given to Reuters said, “The company today announces that it has accepted Tawhid Abdulla’s resignation as managing director and CEO due to his disclosure to the board of what is understood to be unauthorized transactions conducted by him.”  But Mr. Abdullah retorted, “the news about me making unauthorised transactions is not true.”  Damas need to avoid at all costs the incident becoming an act of airing ‘dirty laundry’ in public.

It is not surprising that in family firms with no other shareholders, the movement of money between the company and other investment activities of the family members is a fairly fluid and opaque affair.  A public listing requires that such activities become either fully transparent, or cease altogether.  But at least Stock Exchange disclosure requirements also necessitate that information about improper dealings are made public immediately so that other family firms that have made similar transitions – and they are numerous across the Gulf – can learn lessons from such incidents.

With thanks to my colleague Kate Brader