Making their cases

The challenge for in-house public affairs execs is communicating clearly with the public while keeping on the right side of the lawmakers.

The challenge for in-house public affairs execs is communicating clearly with the public while keeping on the right side of the lawmakers.

In a perfect world, corporations wouldn't need public affairs staff. Then again, in a perfect world, nuclear power plants don't lose power. The Entergy corporation operates 10 nuclear reactors in America, including two less than 30 miles north of Manhattan. The company has been locked in a fierce battle over the existence of that plant, known as Indian Point, with members of the community and local lawmakers for years; no one wants the next Chernobyl in their backyard. So when the power suddenly and inexplicably failed across much of the Northeast on August 14th, Indian Point's neighbors were understandably nervous about the state of their local reactors. Jim Steets, a public affairs executive at Entergy, doesn't usually work at Indian Point, but he was there on the 14th. "I was working out of a swing office when my computer and the lights went out," he remembers. Like most people, it took Steets some time to figure out just how extensive the outage was, but it took barely that much time for his cell phone to start ringing. "All the local media know my cell number," he laughs, "and they were all able to get through even though Verizon wasn't really working." The questions were predictable: Did Indian Point cause the blackout? Was there an accident? And if not, if the source of the outage was elsewhere, what exactly happens to a nuclear reactor when it loses power? Should local residents be worried? To be sure, Steets' first concern was the public and their safety. But minimizing any impact on Indian Point's standing in the ongoing policy debates wasn't far behind. The answers to the media's questions were deceptively simple: Indian Point did not cause the outage, and like most things, nuclear reactors simply shut down when the power is cut off. In this case, the reactors had performed precisely as they should, and there was no cause for alarm. "Once the media understood that we were affected by the blackout like everyone else, they could concentrate on the real causes," he says. "We really didn't become the story." Avoiding unwanted publicity Not becoming the story: it's one of the greatest accomplishments of any in-house public affairs executive. Pitching a reporter to get press for your boss is one thing, but convincing any journalist that a potentially damning - and juicy - story doesn't deserve his attention is altogether more satisfying for someone like Steets. Which is to say nothing of the joy it surely brought his CEO. Thanks to Steets' quick reaction, there are no stories of panic for lawmakers to recount in congressional hearings. There are no damning headlines for environmentalist groups to use in direct-mail campaigns. Instead, Entergy has a real-life example of how nuclear power performs when under stress. And it's an example that will come in handy as the public and legislative debate over Indian Point's continued existence goes on. Entergy's story is a poignant illustration of the fine line between public relations and public affairs - two terms that are too often used interchangeably, even by those who know better. In PR, the ultimate goal is public perception: Do they trust your brand? Do they admire your CEO? And most important, are they excited to buy your product? In public affairs, the focus is the people who write the laws that affect your business. Do elected officials want to see your company do well? Are they sympathetic to your interests? Is the committee chairman who oversees policy for your industry reading positive coverage about your company every morning, or is he or she courting votes in a community that would rather be rid of you? Harrah's Entertainment, operator of 25 casinos throughout the US, faced just such a situation when it set up shop in New Orleans in 1994. The city had legalized gambling a year earlier, but wasn't exactly welcoming the industry with open arms. "When they first approved casinos in New Orleans, they estimated the market at $1 billion a year, so they imposed a $100 million fee - a 10% tax," recalls Jan Jones, Harrah's SVP of government relations and communications. "But the actual market turned out to be about $250 million, so that tax turned out to be more like 50%." The casino went bankrupt twice over the next six years. So in 2000, the company prepared to ask "a legislature that essentially didn't like us" for a $50 million tax cut. Local lawmakers were focused on the downsides of gambling and hence had no interest in making life easier for Harrah's. But Jones put together a campaign that showed them what they didn't know. Employees went to the media and wrote to legislators, saying, "This is my lifeblood; this job is what keeps me off your unemployment rolls. The medical coverage they give me keeps me out of your emergency rooms," says Jones. A paid-media campaign featured the various local charities that benefited from Harrah's contributions, and the casino's vendors took to the airwaves with messages about how their relationship with Harrah's had improved their businesses. "The legislature realized the value in doing the right thing," Jones says. "We got the $50 million tax adjustment." New Orleans officials weren't the only ones who learned a lesson. Harrah's discovered the golden rule of public affairs: "You should be running a continual campaign," says Jones. "Perception will become reality if you do not answer a negative, or at least change the message." Hence Harrah's casinos now include grassroots "activity rooms" where employees can write or e-mail their representatives. Executives are encouraged to serve on local boards. And the company is paying much more attention to its relationships with the charities it supports. "We make sure we pick charities that are proud to be associated with the gaming industry and are willing to say, 'They've been there for us and we'll be there for them,'" explains Jones. Proactivity is key to public affairs In the final analysis, being proactive about your standing with lawmakers is what corporate public affairs work is all about. It makes things much easier when the eventual crisis hits, and it can even help a company keep its distance from certain issues, no matter how vital they may be to its corporate interests. Rhonda Bentz is the director of public affairs for Visa. On the legislative front, bankruptcy reform is a major issue for credit-card companies. They'd like to make it harder for consumers to use bankruptcy to avoid paying their debts. But Bentz isn't eager to talk about that. She'd rather highlight the positive. "We want to show what we do as a business to help educate consumers on money management or ID theft," she offers. "We don't just let senators know how we feel about a certain bill. We'd rather show members of Congress the positive things we are doing. We do a lot as a company to prevent consumers from ever filing for bankruptcy in the first place." Those things include helping schools around the US set up computer labs where students can take Visa's own financial-literacy courses. However, when it comes to the legislative battle over bankruptcy reform, Visa, like many American companies, would rather step aside and let their industry's trade group (in this case the American Banking Association) get their hands dirty. Why? Because as much as Visa would love to see bankruptcy laws tightened, they'd just as soon not have the word "bankruptcy" appear alongside its name on the front page of your daily newspaper. "A lot of what I do is determining when it's best to keep us out of the news," says Bentz. ----- Jim Beam under fire Crisis communications is a huge part of any public affairs job. Stopping a minor crisis from becoming a major media event requires quick reflexes, great press contacts, and a savvy mind. Just ask Stephanie Moritz, director of communications for Jim Beam. On Tuesday, August 4, lightning struck a Jim Beam warehouse in Kentucky and ignited a massive fire. The entire building was destroyed, including the 19,000 barrels of aging liquor. To the casual observer (or the uninformed reporter), it was a massive loss for the company. But quick thinking by Moritz and her team lent immediate perspective to the event, even turning the catastrophe into a media opportunity. Moritz, a former press secretary with the Illinois House of Representatives, and her team quickly released some key statistics. The lost warehouse was just one of 64 Jim Beam facilities in the state, and the 19,000 barrels lost accounted for less than 2% of the company's overall bourbon supply. But they didn't stop there. "We announced that we would replace the relatively young bourbon that was destroyed with an extra 12 days of production," she says, thereby whetting the appetite of anyone who may have been mourning the tragic loss of liquor. As follow-up, Jim Beam ran ads in local papers the following Sunday thanking the firefighters, policemen, and warehouse employees who were affected by the incident. Community reaction was positive, with everyone from first responders to customers to local officials calling to express their concern and gratitude. Says Moritz, "It was a good example of how you take a situation and really make the best of it."

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