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How to deal with the media? Taken from June edition of Enterprise Risk
Special Focus - Reputations
Richard Branson recently told the Institute of Directors, "your reputation is the most important thing in business". Sean Jackson asks how to manage the most personal risk of all when things go wrong and how to make sure shareholders and the general public hear about the things you do right?
Whether or not Virgin's Branson is right or wrong about reputation being the
most important thing in business is up for debate. Whether or not Branson sometimes
gets the boundaries blurred between image and reputation is also highly questionable.
What cannot be argued though is that his manipulation of the media and aggressive
protection of the Virgin brand have made his company and his name one of the
most highly regarded on the market. But, just one public blunder could raze
his empire to the ground.
There are countless examples of corporations' reputations being dragged through
the mud with the chain of events that can lead to reputational damage being
as varied as the methods used to deal with them. Some foul-ups are easily avoidable
and some are quite simply irretrievable. But with the right crisis management
some catastrophies can actually be turned around to reflect favourably on the
management and subsequently on a company's market valuation.
"Corporate reputation is often the first casualty in a business crisis,"
says Philip Huntley, a senior crisis and security consultant with Aon Giuliani
Protocol, a crisis and reputation management services consultancy. Taking
control in perilous moments will be remembered as true leadership. We also
know that failing to take responsibility is permanently damaging.
"As individuals, our reputations represent our ability to operate freely
in the world, to broker deals, to make promises, to demand that promises made
to us are honoured. Reputation is the personal currency with which we all trade.
The same is true on a much larger scale, for corporations. A company that loses
its good name, if only for a short time, suffers damages, sometimes irreparable
damages, to its market capitalisation and shareholder value, and it its ability
to regain its competitive position in the business community," says Huntley.
Prevention is better than cure. That goes without saying. But it is the first thing that a public relations executive will say when quizzed about how to recover from a damaging mistake. And if the number of corporate disaster, is anything to go by, then a lot of senior managers have never talked to a PR executive, let alone had any media training.
"As with any aspect of risk, prevention is better than cure. So it is
more important to prepare for potential risk," says Ron Finlay joint managing
director of PR agency Fishburn Hedges. "Risk managers and communications managers
should work together in crisis management. We will carry out a risk audit to
identify perils that cause reputational damage, their probability and impact
on a scale of one to five. This helps us to prioritise and prepare contingency
plans."
All PR agencies should offer their clients media training and not just as a technique of deflecting awkward questions, on the contrary. The relationship that exists between a business, its PR agency, the press and finally the world at large is
a balancing act. A lot of corporates view the media, trade and general consumer press alike, with an air of distrust, and it has to be said that people would rather read about what went wrong than what went right, and journalists would almost certainly prefer to write about it. But when properly handled, the media can be used to put out a positive message quickly and to a wide audience.
Companies need to understand how the media works and how to give appropriate
information. Learning how to be a good company spokesperson is an evolutionary
process and training is ongoing. Good spokespeople make it look easy, but most
aren't naturals," says Tom Coombes managing director of PR agency Cognito Europe.
"Good media training makes the journalist's job easier. It ensures the spokesperson
provides accurate, succinct answers and useful supporting information. It also
ensures the individual in question is the most appropriate person to speak
with a particular journalist on a particular topic."
But what happens if your founder describes your product as "crap" or you're
forced to recall a product for one reason or another? What you should not do
is stay quiet and hope it goes away. In 2000 Bridgestone tyre company was forced
to recall 6.5 million tyres that were linked with 150 fatal crashes on Ford
cars. Chief executive Yoichiro Kaizaki refused to become involved and ignored
the role of public relations, following the line of Ford's PR policy at the
time. Ford then broke the silence and tried to force responsibility onto the
tyre manufacturer. The Bridgestone share price dropped from over Y2500 to below
Y1000 and Kaizaki was forced to step down. Despite passing the buck Ford chief
executive, Jac Nasser, did not fare much better.
When you find yourself in a crisis, you need to tell it all, tell it now
and tell it fast. People wrongly go to ground. Sometimes you just have to face
the music," says Claire Walker managing director of PR agency Firefly Communications.
"You need close contact from the chief executive down to the people who were
affected. When you are dealing with the public, empathy is required. The general
public is far too clever and the media is far too cynical so the chief executive
can't just turn up for a quick photo call."
"We suggest very strongly that our clients have media training. People
are frightened of the media and there is no need. People wrongly assume that
journalists are out to get them, but they are just out to do a job. We encourage
our clients to prepare for a crisis, it is part of a company's overall business
continuity scheme. The crisis management team needs the chief executive, the
head of IT and HR. You need five or six individuals who are capable of sorting
out a problem," says Walker.
However, if your founder does call your product "crap" as infamously happened
with former UK high
street jeweller Gerald Ratner, you might as well shut up shop and hope for
the best. "I was at the Gerald Ratner "crap" speech and that was a monumental
cock-up. It was impossible to recover from that, he had to go and the company
had to change its name. And you know why it was such a disaster? Because it
was true," says Peter Morgan head of media strategy at PR agency Weber Shandwick
Worldwide.
Morgan, who spent 12 years on the other side of the fence as a business correspondent with the BBC, recommends that everyone goes through some type of media training. He also said, that with enough experience it is easy enough to spot someone who has had training.
"If a company gets roasted in the press it is bound to be concerned because
its employees, business partners and customers will see it. The idea of a massive
backlash is a real concern for major international companies," says Morgan.
"The internet and global news services mean it is difficult to hide skeletons
in the cupboard. You need to be entirely clear about the message you want to
communicate and demonstrate the proof that it is your way of doing business."
When Lloyd's of London implemented its Reconstruction and Renewal plan (R&R)
in 1996, it faced some serious questions by the press. Its reputation was in
the balance. It was in the fortunate position of anticipating the difficulties
ahead of the game, but still needed to put in place a watertight communications
strategy. Peter Hill, now an independent PR consultant was in charge of Lloyd's'
corporate communications at the time and explains the importance of monitoring
media coverage.
"There was a level of scepticism among the press that Lloyd's could pull
it off. It is always a much better story that a bulwark of the City is about
to go under the waves. The national press was more sceptical of the prospects
of success than the trade and technical press who followed the day to day business
of insurance. We monitored and evaluated the messages on a constant basis that
were being reported in the trade press as they were put out.
"We also did an awful lot of market research at the time, both home and
overseas. This is a very important facet, not just for Lloyd's, but for any
large company involved in any sort of crisis or any extended period of concern
about whether or not something will succeed and hence the future of it reputation.
You need to measure how effective the messages are because if you don't know
that, you are nowhere frankly," says Hill.
Monitoring press coverage boils down to more than just measuring column inches and comparing that with the cost of advertising. Public relations executives calculate that a mention in editorial copy is roughly five times more valuable than brand advertising, and conversely an unfavourable mention can be five times more damaging. A number of specialist agencies exist that analyse press coverage. Hill employed the services of Nick Grant, managing director of Mediatrack.
"Clients use it for assessing market opportunities as well as managing
reputation protection, and reputation development. People say it takes about
ten years to build a good reputation and about a minute to lose it," says Grant.
"The more you develop the more that you create and control the parameters.
The more people see you, particularly journalists and therefore their audiences,
then the greater control you have on influence, particularly in a crisis management
sense."
The basic metrics involved counting the stories that are achieved and analysing
each of those stories for the level of impact. The media tracking company scores
the stories according to the impact. The agency will take into account readership
data, the visibility of the story, the size, whether or not there are visuals
or graphics and naturally the quality of the editorial content, the incidence
of competitor mentions, and the strengths of the journalist's intent.
"We have a detailed protocol which deals with the issues, messages and
content which are mentioned in the story. It is a sophisticated operation to
get right. If a client is seeking to promote a concept, it is very rare that
a journalist will simply repeat the company's message blindly, so the issue
becomes being able to define what break-down elements within the corporate
purpose have been achieved in a single story.
You ought to be able to predict the elements of a crisis even if you can't
predict the timing. You should be able to model the kind of things that go
wrong and prepare for that," says Grant.
Reproduced with kind permission of Sean Jackson, Enterprise Risk
www.er-magazine.com
sean.jackson@informa.com