Useless PR has turned NatWest’s woes into a corporate nightmare

FOUR years ago, Stephen Hester was CEO of British Land. Not a company many people know of, let alone its boss. But today, not only is Hester running RBS – one of Britain’s best known banking groups and owners of NatWest – he is a household name. First it was his salary, then it was his bonus. And now RBS’s “software glitch” has been front page news for days. Hester is making headlines again for all the wrong reasons.

With 100m banking transactions delayed after a systems upgrade went badly wrong, Hester shouldn’t be surprised to find himself at the centre of a media firestorm. Salaries weren’t paid and day-to-day payments went unprocessed. But then the story stepped up a gear. A couple couldn’t move into their new home because the payment failed. A hospital in Mexico supposedly threatened to withdraw life-saving treatment for a 7-year-old cancer victim because a British charity couldn’t transfer the necessary funds. A man was held in prison over the weekend because the court couldn’t tell if his bail money had been paid.

The story has it all and is a corporate communications nightmare. An everyday product or service failing on a massive scale, with some deliciously media-friendly human-interest angles. And at times like this, any big company is looking for the boss to step up. Hester has failed to do so – and he shouldn’t be surprised to see headlines calling for him to lose another bonus.

RBS has done some things right. It has proactively communicated, sending regular texts and emails to customers, and printed numerous apologies in newspapers, many from Hester personally.

However, none of the messages have adequately communicated a detailed explanation for what has happened. Almost a week into the crisis, the statement on the bank’s home page refers euphemistically to “problems” rather than precise details of the cause. There has been no shortage of apologies, but a significant shortage of explanation.

Lack of information about a problem – rather than the problem itself – can be the key driver of customers’ frustration. Apologies do not assuage anger. Too many companies think that groveling is the answer. It’s not. Don’t apologise – explain and take action. Then you’ll reduce anger.

There has certainly been no shortage of anger. Much of it has been on Twitter. None of the bank’s retail arms have strong, efficient Twitter services, evidenced by their relatively small number of followers. This anaemic online presence has exacerbated their problems. It is a key communications channel – neglecting it is like having half your staff walk around with their fingers in their ears. Hester probably can’t tell you much about hashtags and trends, but he needs to sort out his company’s social media policy.

Hester’s biggest blunder was to send out Susan Allen, director of customer services, to do extensive TV and radio interviews, rather than front-up himself. Rumored to be relatively inexperienced in front of the media, Allen managed to communicate with her head cocked inquisitively to one side – making it look like she was asking questions and not answering them. The little things matter, and she lacked gravitas and the rank to front what was fast becoming a national emergency. RBS’s initial description of the failure as a “glitch” was equally puzzling. It is profoundly unwise to go anywhere close to an understatement in such circumstances.

Eventually the penny dropped and Hester himself appeared. His initial absence was a major strategic blunder. Perhaps the reason he kept away was the knowledge that he is not a natural performer. He sounds like he has been dropped into RBS from a planet only distantly related to our own. His choice of vocabulary is strange, his delivery halting. He described in great detail how his technical teams had been overwhelmed rather than how they were fixing things, and provided little sense of command, control or resolution. He showed little empathy with the problems people were facing, just blandly stating how sorry he was and how hard everyone was working to put it right.

In one BBC News interview, Hester’s lack of preparation became painfully clear: “I think we should be doing the right thing in the most intensive way possible.” A statement of such vacuous meaning that it’s little wonder that the bank got itself into this mess in the first place.

James Hutchinson is a corporate messaging and communications consultant.