On the line

Telecoms are trying to find ways to rebuild their credibility.

Telecoms are trying to find ways to rebuild their credibility.

Trial by fire is the only way to describe how corporate communications and PR teams responded as unending crises snowballed through the telecommunications industry this year. Essentially, PR firms learned to respond to unyielding questions about fraud, bankruptcy, and government investigations on the run. News of the telecom meltdown obscured all other stories coming out of the industry, forcing even those who weren't tainted by scandal to alter their communications to cut through the noise and make sure their audiences didn't look at them with suspicion and doubt. "You don't have any choice but to deal with it," says Brad Burns, SVP of corporate communications at WorldCom, which had to withstand its CEO quitting, its CFO being fired, and one of the biggest corporate bankruptcy and fraud scandals in history. "The scope and magnitude of what we've had to deal with over the past five months has been unprecedented. "In a twisted way, this is what folks in communications live to do," Burns muses. "We wouldn't want these conditions under any circumstances. But when you love what you do, then it's not about being overwhelmed. You just step up to the plate. I wouldn't want to live through it again. But anyone could do this job during the glory days - the glory days take care of themselves. It's in these circumstances that you earn your worth." Jerry Santos, SVP of corporate communications at Global Crossing, knows exactly what Burns is talking about. Santos came on board late last year, and was quickly thrust into the company's telecommunications bankruptcy and fraud scandal. "A lot of us were using muscles we never used before," says Santos. "We just had to deal with one crisis after another. And there were two ways to handle it. You could either hide under your desk, which is what some companies were doing, or just get out there and communicate. We told our story quickly and honestly. We went out to employees, media, and customers in particular." Disclosure was also the key word at WorldCom, as Burns worked to repair WorldCom's credibility while the company took its lumps. "We're still going through the process of restoring credibility," says Burns. "We feel we're bottoming out with the negative press. We'll still take our shots. Once you've gone through a lifetime CEO resigning, fraud within the company, bankruptcy, and former executives being indicted, at some point the pendulum has to start swinging the other way." When Santos arrived at Global Crossing, external firms handled media relations. The first thing he did was bring all communications in-house, so the company could speak with one voice throughout its crises. "We've been a role model in terms of employee communications," asserts Santos. "We have two or three employee calls a month. We have road shows so executives can face employees and deal with issues such as executive compensation and accounting. And we're getting out there and talking to the press. [Global Crossing CEO] John Legere is doing interviews every day or two. He's visiting customers. We want to make sure people in Detroit, London or Montreal get the same messages." Steve Jursa, senior partner and global technology practice leader at Porter Novelli, says he's been lucky that none of his telecommunications clients - including BellSouth, Nextel, and Qualcomm - have been besieged by scandal. But that doesn't mean they haven't been affected by their competitors' troubles. "There are a lot of very well-run telecom companies that are suffering from the industry's negative image," says Jursa. "So it's about focusing on the fundamentals." Reaching out to new audiences But as Jursa and others focus on the fundamentals, there has been a shift away from focusing on the technology behind telecoms, and a renewed attention to the value. Some audiences are still interested in speeds and feeds, says Jursa, but he has brought in more of the firm's practices, as telecom clients need to reach out to new audiences in new ways. "We're always looking for new and interesting ways to communicate," says Jursa. "Everybody wants to be strategic, and provide thought leadership. We've seen an increase in the practices we have involved - we've brought in our consumer and corporate practices. You need to have the consumer piece, the tech piece, and the corporate piece, all integrated and supporting each other." But it's not just the accounting scandals weighing down the industry. It's a deadly mix of too much network capacity and too much debt that led to the implosion of the industry, explains Paul Rand, EVP and director of Ketchum's global tech practice. The focus has been establishment - or reestablishment - of credibility, says Rand. "When other telecom companies are tarred and feathered, you want to make sure the baby isn't thrown out with the bath water. There has been so much guilt by association. Simply by being in the telecom sector, there is an immediate credibility issue, which has to be addressed before any other messages can be heard." Companies can't be defensive, but must acknowledge the challenges they face, and why they are well positioned to come out of the telecom implosion as leaders in their field. "You have to make sure the financial community understands the company's health," says Rand. "The analysts are next, because they are important influencers. But talking about a company's technology for technology's sake is not getting a reaction. It's about the ability to link that technological development and progress into a bigger story of a business' overall productivity. It's the next evolution in telecommunications, and the smart companies are already positioning themselves for it." Getting past the backlash Once companies are able to get past the telecom backlash, they are finding a receptive audience. "What we've been focusing on is why our clients are doing well, because all those stories about the flameouts are now old news," says Paul Forecki, VP at Sterling Communications, whose telecom clients include Vivace Networks and CoSine Communications. "We focus on why they are doing well, and what segments of telecommunications are doing well. We've found journalists are more and more receptive. It's more about the business. Before it was all speeds and feeds and one-upmanship. Now it's more about the company and the concept. Your audience wants to know about ROI and the value. You have to convince people that your client is going to be around six months from now." The press and other audiences are hungry to hear about the exception to the rule, argues Stephen Jones, managing director of Ogilvy PR's global technology practice. The pessimism and scrutiny that have colored so much of the perception of the telecom industry is still there. But with so many good stories to be told, audiences are looking for that exception to the rule. "There has been a bunker mentality" among telecoms, says Jones, and for good reason. "But the opportunities are imminent. The media is more prone to write about the exception to the rule and the contrarian development. The obituaries have been written for the past 18 months." One company that took that initial bunker mentality is Williams Communications. The company closed itself off as it slid into bankruptcy. "Public opinion really turned against them," says Michael Kempner, president and CEO of The MWW Group, whom Williams hired to help the company through its bankruptcy. "We came in, and it took some education to get them to communicate again. This was a company that traditionally was very open. Once we had management buy into the need to communicate, the people, the press, and the government officials were very open to listening to the facts. Even in Chapter 11, you still have to perform, and you still have to show credibility." "There are a lot of lessons learned in managing a crisis," says Qwest VP of corporate communications Tyler Gronbach, who speaks from experience. "You want to communicate as quickly as possible. We faced issues that could impact the stock value or the service we provide customers. We felt we needed to proactively communicate, and provide as much information as possible. We wanted to stabilize the situations that could start spiraling out of control and stop the rumor mill." Maggie Fitzpatrick, SVP and director of technology PR at APCO Worldwide, points out that much telecom news is being driven by government entities. "Now more than ever, our clients want help with public affairs. We need to keep an eye on regulatory action, and how our clients can position themselves amongst that change to remain competitive." "We don't want to do too much kicking when others are down, but we have developed a PR strategy to differentiate ourselves," says Eric Rabe, Verizon's VP of media relations. "Because if you don't talk about the positives, people will remember what they don't like. We've been quite successful in differentiating ourselves, not just from the WorldComs and Global Crossings, but also from AT&T and SBC. Customers want to deal with a company they trust and can count on. At the end of the day, all our messages are designed to get people to do business with us." -------------------- The client-agency relationship An increasing number of telecoms firms are pulling most, if not all, PR services in-house. Verizon, Qwest, and Global Crossing don't have agencies of record. Neither does AT&T or WorldCom. The reason: Corporate communications teams are finding it easier to deliver consistent messages with fewer external PR teams. Qwest's Tyler Gronbach says his company recently stopped using Ogilvy for tech-related PR because his staff could handle the work itself. When Jerry Santos joined Global Crossing a year ago, one of the first things he did was bring PR in-house. "When I got here, Global Crossing had gone through M&As," he says, "and there were just too many communications people. So I brought everything in-house to make sure they were speaking with one voice." Some telecoms still work with agencies. WorldCom works with APCO Worldwide, The Merritt Group, and The Harbour Group on a project basis. Global Crossing works with Bailiwick Public Relations, Verizon works with Chlopak, Leonard, Schechter & Associates, and Qwest still works with Schenkein & Associates. Despite fewer telecoms using AORs, many hire agencies on a project basis, and PR firms still say they see a bright future for their relationships with telecoms. Sterling's Paul Forecki sees a new crop of telecoms emerging, while APCO's Maggie Fitzpatrick says companies are relying more on PR than advertising because ad buys are too expensive. And Ogilvy PR's Stephen Jones believes that if agencies are seen as partners during telecommunications companies' "darkest hours," then they stand to benefit when those companies are on the mend.

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