PAUL HOLMES: Hershey Trust decision to eschew public input regarding sale may be the costliest one of all

One of the first things I wonder when I see a troubled organization - particularly when its wounds are obviously self-inflicted - is where were its PR people when the most damaging decisions were being made.

One of the first things I wonder when I see a troubled organization - particularly when its wounds are obviously self-inflicted - is where were its PR people when the most damaging decisions were being made.

Take the example of the Hershey Trust, which controls 77% of the voting shares of Hershey Foods, and which earlier this year decided to sell the company. The trust's motivation may be noble - it wants to diversify its holdings to provide a more secure future for the Milton Hershey School, which serves the community's underprivileged children - but its decision still triggered vast criticism in the community, where even street lights are shaped like Hershey's Kisses. Hershey workers and other residents have picketed trust meetings and even attempted to make the sale an issue in the state's gubernatorial race. In fact, Attorney General Mike Fisher, a candidate for governor, has filed a petition demanding that any offer for the company be subject to court approval. Workers are concerned about job security, while residents fear a buyer could disrupt and destabilize the community. What's amazing is that a decision so controversial could have been made with so little public consultation. Was the trust so out of touch with community opinion that it didn't anticipate this reaction? Or did it foresee it, but simply not care? Whatever the explanation, the trust's failure to fully consider the PR implications of its decision has an impact far beyond the inconvenience of a few pickets or media stories. In addition to possible legal intervention - reminiscent of how community activists blocked the sale of Dayton-Hudson to corporate raiders more than a decade ago - the protests are likely to have financial implications. A food industry investment banker recently told BusinessWeek, "A company is a web of relationships with employees, customers, and suppliers. Every time you go through [the sale process], it disrupts those relationships." If an investment banker grasps this concept, why don't the trustees? The most mystifying thing here is that a smart PR approach probably could have averted the crisis, and for a minimal investment of time and money. A smart PR approach would have taken the time to understand objections to the sale. It would have listened to opponents, held town-hall meetings, explained the reasons for its decisions, and listened to other suggestions for attaining financial objectives. It would have commissioned studies to determine the sale's impact on Hershey school students, whose lives, critics say, could be disrupted by it. Most of all, a smart PR approach would have acknowledged the impact of this decision on multiple stakeholders and sought to include those stakeholders in the decision-making process.
  • Paul Holmes has spent the past 15 years writing about the PR business for publications including PRWeek, Inside PR, and Reputation Management. He is currently president of The Holmes Group and editor of www.holmesreport.com.

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