CommBank's mea culpa

It took a while, but the Commonwealth Bank has finally apologised for a scandal involving forged signatures and dodgy financial planning. 

Geoffrey Stackhouse, Managing Director, Clarity Solutions

Ian Narev’s dramatic Mea Culpa for the CBA Financial planning scandal has been heavily criticised this week. But it’s wrong to dismiss it out of hand, they did a lot of things right.

Aside from a few hiccups the overall strategy did the trick. More importantly it got the sharemarket’s tick of approval with CBA shares closing up, and near historic highs.

Let’s start with what worked.

The apology itself was an absolute gem. It was structurally sound, "hit the hurt" in the customer’s hearts, and set out a clear path of penance to make things right.

I loved the way Narev acknowledged the loss of trust, the pain it had caused customers, and took responsibility for the problem and the solution.

It showed that the Bank, and he personally, ‘got it’. And although Narev's delivery felt like he was still recovering from a total empathy bypass, it still worked.

Once his apology won him the right to speak, Narev was able to deliver a corker of a key message – characterising the crisis as a “management failure, not a legislative failure”. That one line acknowledged the blame while neatly sidestepping calls for a Royal Commission.

But it wasn’t all rainbows and sunshine.

Aside from missing the opportunity to nip this crisis in the bud years before it became an inferno, the biggest blunder was letting Narev go AWOL during the critical first days.

Narev didn’t cause the problem, but as the public face of the Bank he has to be the public face of the crisis – he is the Chief Reputation Officer.

Not having the CEO on site to face the music completely undermines the efforts to show the Bank takes it seriously. Worse, he was off on holidays. And then he left the country immediately after his presser.

Although not on annual leave this time we are told.

His absence sends the wrong message and makes the whole thing look like a PR stunt. This was nicely summed up by the outraged Merilyn Swan, whose family were victims, when she said ''It seems the chickens are simply being invited back into the henhouse for dinner with the fox”.

It was a ripping couple of days if you weren't involved with the crisis. And my top three insights from watching the comms strategy play out are:

1. Have the CEO, or whoever is your ‘face’, on site and ready to face the music.

2. Apologise early and often but make sure it’s genuine and addresses the real outrage.

3. Pay your penance. You need to have skin in the game, to hurt like your customers.

Whether it’s grounding your fleet of A380s, withdrawing your product, or submitting to independent reviews and compensation, the pack will keep baying until you bleed.

Want to give your crisis plan and crisis spokespeople a realistic workout? 

Click here for more details about our crisis sims, or contact Geoffrey Stackhouse to discuss it personally.