When Fake News Targets Your Company

ADI IGNATIUS: I’m Adi Ignatius.

ALISON BEARD: I’m Alison Beard, and this is the HBR IdeaCast.

ADI IGNATIUS: All right, so, Alison, did you know there is a social media report that says the lead article in last month’s Harvard Business Review is actually a coded prophesy for the end of the world, and this thing is going crazy viral?

ALISON BEARD: Wow, that is highly alarming; I didn’t know that.

ADI IGNATIUS: Well, because it of course didn’t happen.

ALISON BEARD: [Laughing]

ADI IGNATIUS: And that’s really the topic of this week’s IdeaCast: fake news and how companies can respond to it.

ALISON BEARD: Yeah, it’s interesting because I think about this so much in the realm of politics and science, but I haven’t really thought about it affecting businesses. Is it pretty prevalent?

ADI IGNATIUS: Yeah, it is prevalent. I mean, it’s hard to say exactly who the perpetrators are, whether it’s rivals, whether it’s short sellers, whether it’s just trolls trying to create some entertainment for themselves. You know, there’s a case, a few years ago, Albert Bourla, the CEO of Pfizer, was shown in a video supposedly saying that by a certain year, “We will reduce the number of people in the world by 50 percent.” OK, that’s not a good statement, but that’s not what he said. What he had said was, “We will reduce the number of people in the world who cannot afford our medicines by 50 percent.” Somebody doctored it, and Pfizer had to deal with the fallout. So, it is definitely a problem, it’s a growing problem, and companies need a strategy for it.

ALISON BEARD: So, what do you do to counter this phenomenon? Who did you talk to?

ADI IGNATIUS: So, my guest is Patrick Haack, who’s a professor of strategy and responsible management at HEC Lausanne. He’s the co-authors of the HBR article “How to Counter Fake News.” Yeah, and it’s not enough to show that the information is incorrect. The old playbook of bringing out the CEO or someone from the comms department to say, “This is incorrect” probably won’t help you. What’s necessary is to demonstrate that other influential people similarly discount this fake news and that your company’s reputation is and should be intact. So, it actually requires high-level attention and needs to be taken seriously. So, this article really points to ways to be prepared for it. So, here’s my interview with Patrick Haack, professor of strategy and responsible management at HEC Lausanne.

ADI IGNATIUS: All right, so, Patrick, welcome to the IdeaCast.

PATRICK HAACK: Thanks for having me.

ADI IGNATIUS: Alright, so we’re talking about willful fake stories that are meant to harm a company’s reputation and are meant to go viral.

PATRICK HAACK: Yeah.

ADI IGNATIUS: Okay. So, obviously we’re going to get into some of the remedies, but let me start with a few basic ones. If there’s a fake news report damaging to a company, what about just ignoring it?

PATRICK HAACK: Ignoring fake news might backfire because silence can be seen as sort of confirmation; and given the speed and virality of fake news, it might not work out well, right?

Another type of strategy typically recommended by the traditional playbook is removing the content, but here the problem is some sort of digital hydra effect. So, you cut off one fake news story, and then it reappears again, and even multiple times in the form of repulse and screenshots and so on.

And then finally, of course, one of the key strategies of course is fact checking, providing accurate facts. But also here we know of many examples where the company provided facts and tried to get the record straight, but nevertheless, the narrative and the fake news just continued being spread and went out of control and went viral.

ADI IGNATIUS: There’s also the Streisand effect, where efforts to hide information actually can backfire and bring more attention to the negative information than ignoring it might. How does one avoid the Streisand effect trap?

PATRICK HAACK: Yeah, that’s an interesting one. So, Streisand Effect is named after actor singer Barbara Streisand, who tried to suppress information, actually a picture about her house in Malibu in California. And I think the picture was taken for the purpose of reporting on coastal erosion, and attached to the picture was her name. So, Barbara Streisand was concerned in terms of privacy, understandably, but then she sued the photographer, right, and this actually then raised attention to the picture. And interestingly, before suing, I think only four people have downloaded the picture. And then after this became public, more than 400,000 people actually accessed this picture, showing that, well, if you try too hard to censor or suppress information, it backfires.

Now, how to avoid the Streisand effect. It’s probably very challenging to identify the point in time when one should communicate as a company. And it’s actually interesting because another classic recommendation and crisis communication is stealing thunder. Stealing thunder means, OK, if you know have a problem, it could be a fake news crisis. it’s better you disclosing the problem and not one external source, right? Because this actually helps creating favorable attributions. People say, OK, they actually did disclose that issue themselves. So, we give them credit for that, right? Again, how to identify this sweet spot, when to come forward with information and when not, I don’t know. I think this is really a challenge for future research.

ADI IGNATIUS: Um, OK, and let’s talk about to what extent companies can prepare for this. You know, if the best offense is a good defense, what can organizations do before the fake news comes out that goes viral? Is there anything that companies can do ahead of time to minimize the threat that could come?

PATRICK HAACK: Yeah, absolutely. They can prepare, and we suggest three tactics. So, the first thing we propose is monitor social resonance. So really trying to understand, OK, who’s influencing the story? When does the story cross a visibility threshold? Second, what companies can do, they can ensure transparency. So, this is really about earning trust and credibility before a crisis hits. This can be achieved through independent audits, certifications, inviting stakeholders to visit factory sites.

McDonald’s did, for instance, a very good job. They were facing allegations, false allegations, of pink slime in the burgers, and then they came up with a campaign called Our Food, Your Questions. So, they had a Q&A website. They had live sessions where actually people could see how burgers were prepared. People could visit sites and restaurants. So, this is the type of transparency companies can establish before a crisis hits.

Then the third tactic we propose is more focused on action when a fake news crisis hits. Here, the core idea is that you need to activate allies, so you need to reach out to your network, trusted partners, and other key stakeholders and asking them, Hey, you need to help me here in this crisis. Maybe also considering that your reputation is at stake. So, you really need to get this support to ensure that people realize, OK, it’s not only the company saying this piece of information is false, but actually other people, many other people are saying this.

A good example is perhaps Taco Bell. Taco Bell was accused to have fillings in the taco containing only 35 percent beef. And then they actually started very sophisticated campaign. They had ads and big newspapers saying, “Thank you for suing us.” And they brought in third-party validation, including the US Department of Agriculture saying, Well, this is actually incorrect.

ADI IGNATIUS: So, some of the fake news claims are ludicrous. What’s the threshold for when a report that seems ridiculous, beneath comment, actually needs to be addressed?

PATRICK HAACK: That’s a very tricky but important question. You need to monitor influential actors like influencer, but also industry peers. Is this being picked up by the news media? So, you need to invest your social listening tools. Again, it’s a fine line between communicating too early and trying to debunk and communicating too late. So, you want to identify the sweet spot, and this is extremely challenging.

ADI IGNATIUS: Talk a little bit about your experiments. How are you gathering research on all of this?

PATRICK HAACK: So, in our research we studied the reputational impact of fake news. We actually distinguish between two types of reputation judgements. The first one is a person’s private belief regarding the reputation of a company, and the second thing we measure is a person’s belief about the belief of others. So, let’s assume there’s a fake news crisis. So, I might say, OK, I don’t believe this nonsense. However, I’m less certain regarding others, like the average person. And we know from research on media effects that people tend to assume that media messages have a greater impact other people than on themselves, that other people are more susceptible to influence or more easily swayed by media messages, right. And this is exactly what we find in our research.

In our research, we conducted a couple of experiments drawing on typical fake news scenarios. People had to read these cases. We provided them with some vignettes. We also had some fact checking, like people being told, Well, this is actually fake, be aware. And then we measured both types of judgments, what people privately believed and what they thought other people would think in terms of reputation. And most interestingly, people’s belief of what other people believe actually had an impact on their private beliefs, and it also shaped their behavioral intentions. So, even though people realized, OK, this is fake, they nevertheless adjusted their private beliefs to what they perceive to be the beliefs of others. And this also had an impact on behavior. They were less likely to invest in the company, and they were also less likely to buy the product, a product of the company.

ADI IGNATIUS: So, there’s just real cost here.

PATRICK HAACK: And this is really important because it essentially says, or, shows, even though people are aware that a fake news story is false, the traditional approach based on fact checking is not effective, at least not fully effective, because of this adjustment effect. And that’s why this traditional approach based in fact checking needs to be complimented with what we call social proof tactics. Companies, they need to increase confidence that also other people actually realize, OK, this piece of information is false. And this is kind of the main message we want to convey in our article.

ADI IGNATIUS: So, let’s go back to social proof. So what would social proof look like in practice?

PATRICK HAACK: Social proof in practice means I realize that many other people, including peers and experts, are not being swayed by the fake news. And this gives me confidence in my own judgment. So, social proof actually allows me to judge whether a piece of information is correct or right, whether certain behavior is right or appropriate. So, I really need this and link to others to understand, okay, what is the consensus here in my reference group, right? And this can be society at large, but it can also be my family, or it can be my work team or my organization.

ADI IGNATIUS: Okay. So, Patrick, as you know, we are always very practical in trying to give companies, leaders actionable advice right now. So, if someone’s listening to this and say, Yeah, I want to get better at handling the fake news threat, what can CEOs, what can people in the C-suite do right now?

PATRICK HAACK: Well, I guess here, start small. The goal is not to eliminate fake news. I think you can’t; the goal is rather to reduce its negative impact on reputation and trust, and yeah, you protect the trust you have built with the community.

Maybe one thing one could do is, well, sit down with your communications team and ask, “Hey, at what point does fake news about us become big enough that we must respond?” Right? Again, think about the Barbara Streisand effect and when a company should steal thunder instead. Here it would be important to define clear thresholds so you don’t amplify small stories unnecessarily. So, I guess the focus would be what is the volume of mansions, the influencer pickup, and do we see any media coverage, especially in the mainstream media? And you may also want to identify two or three of the most likely themes for fake news, be it, well, a topic related to supply chains, labor practices such as child labor or product safety.

I think another thing that can be done fairly quickly is to send a message to employees, sending a short internal note to staff explaining that fake news is a risk, and encourage your employees to flag suspicious content because essentially your employees are the first line of defense. And yeah, relatedly and more generally, map and brief your allies. Maybe identify five to 10 credible actors outside of your company, experts, satisfied customers, partners, and share your values and commitments and just let them know that you may call on them and ask for the help if fake news spreads.

And finally, maybe also review, and I think you could do this easily in the coming days, review what kind of credible public information you already have. So, do you have some sort of independent audit or certification? Do you have prepared a behind-the-scenes video? Do you have a webpage with customer FAQs, or do you have some sort of myth busting, a myth versus facts page?

ADI IGNATIUS: And who should be dealing with these issues? Is this for the communications department, or should this be dealt with at a higher level than that?

PATRICK HAACK: It depends case by case, I would say. I mean, typically it would be the comms team and the risk management team, but then it depends. If the fake news is actually quite severe and it gets out of control, then of course you want to get in senior executives up to the level of the CEO. So yeah, it depends case by case.

ADI IGNATIUS: Anything else that CEOs should keep in mind as they deal with this problem?

PATRICK HAACK: So, if you’re a company leader, and you see fake news, and it’s getting viral, please speak up. Help establish social proof. So, even if the fake news affects a competitor, maybe you have some sort of short-term benefit because, well, maybe people move to you and are more willing or interested in buying your products. But on the other hand, if fake news is affecting your competitor, it might actually create a negative industry spillover. And more generally, it can actually then also lead to a decline in trust, trust in our institutions, trust in media, but also trust in ourselves and into each other. And given that trust is really so fundamental for, well, any type of social activity, I think it’s really important to raise the voice and say, Oh, well this is actually wrong. This is fake news.

ADI IGNATIUS: That’s useful advice. This is a really interesting topic. So Patrick, I want to thank you for your time. I want to thank you for being on the IdeaCast.

PATRICK HAACK: Thank you again for having me. It was an honor.

ADI IGNATIUS: That was Patrick Haack, professor of strategy and responsible management at HEC Lausanne. He’s co-author of the HBR article “How to Counter Fake News.”

Next week, Alison will look deeper at how teams will be rebuilt in a fast-moving future.

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Thanks to our team: senior producer Mary Dooe, audio product manager Ian Fox, and senior production specialist Rob Eckhardt. And thanks to you for listening to the HBR IdeaCast. We will be back with a new episode on Tuesday. I’m Adi Ignatius.