Strategies for averting a crisis

PR directors from some of the most scrutinised firms met last month to discuss reputation. Peter Crush reports

‘You can live down everything except a bad reputation’ – so said Oscar Wilde. At last month’s rain-lashed
Communication Directors’ Forum on board the Oriana, it was corporate reputation that dominated proceedings – a subject high on the agenda of today’s PR practitioner.
Among the delegates on the cruise ship was a remarkably candid Jonathan Walsh, corporate marketing and communications director at Nestlé UK. On the liner, moored just off Guernsey, he told the gathered throng: ‘If I were the CEO of Nestlé, I’d be really hacked off that it’s taken eight years for the issue of healthy eating to get to the forefront of PR strategy.’

Walsh was referring to a  memo he showed delegates, revealing that Nestlé wanted to promote itself as a ‘wellness’ company back in 2000.

Earlier that day, the Department for Education and Skills announced that the sale of junk food would be banned from schools from September. Walsh’s criticism stemmed from the fact that only last year, when it backed the
vending ban, did Nestlé CEO’s stated ambition come to pass.

Open and honest
Walsh continued: ‘When I first met with the Government last year I thought I was going to be criticised
because of our [poor] reputation.’ In fact, the consultation of Nestlé has resulted in a compromise deal – the company will continue to supply school vending machines, but must  swap candy bars with healthier snacks.

It is rare for a senior PRO to publicly acknowledge the low regard in which his employer is held – but this conference was an open platform for such discussions on reputation and how it can be measured. Reflecting February’s Harris Interactive survey of Fortune 1,000 companies, delegates on the Oriana revealed perceived loss of reputation to be CEOs’ greatest anxiety.

Walsh’s advice was simple – PROs must be more accountable to the rest of their organisation, while corporate affairs and marketing teams should ally themselves with the PR department. ‘I have been a walking advertisement of this,’ he claimed, commenting on the recent widening of his remit to take in marketing as well as PR.
‘Nestlé’s corporate comms director Ian Rayson and I kept on going to the same meetings. That’s when we decided that our roles should be one and the same,’ he expounded.

Walsh’s message was stark: ‘There is a trend developing where consumer marketing in all spheres is beginning to have its standards set by government. PR practitioners need to know more about the corporate agenda.

‘More and more of my assignments have marketing objectives built in because the corporate and consumer agendas are now the same. PROs should be the ones defining the corporate agenda because in theory, it is we who have the most skills to do so.’

This clarion call was more rousing than the rather predictable ‘PROs must reach the top table’ chant. It
was supported by Jonathan Chandler, director of public affairs and comms at Coca-Cola Europe, another firm in the firing line around the obesity issue.

Decision time
‘PROs must decide how they want to apply their skills – merely to optimise already existing programmes, or for bold and exciting projects for the future,’ said Chandler. ‘Coke recently faced a choice in terms of how to maximise its PR. The solution we came up with was to map out our values and virtues in order to make our reputation stand out.’
He added: ‘This has become an integrated approach to marketing and PR that enables us to plan for anything, from how to promote our link with the World Cup, to highlighting sustainability and CSR. Now we can grind out an execution that works but which still allows us to have great ideas.’

Beyond the experiences of Coke and Nestlé, there was much for delegates to chew on around the subject of managing reputation crises.

Alan Wild, managing partner at reputation management agency Aritake Wild, predicted telecoms would be the next sector to face focused consumer activism. ‘Reputation issues usually face firms where consumers are urged to switch provider by campaigners,’ he said. ‘We’ve seen the evolution of anti-corporate activity: first it affected energy providers, followed by the sporting goods and the food and drink sectors. Technology companies will face the same threat as they get drawn into issues about lack of exercise, crime and lack of cohesion in society.’

Perhaps companies should pre-empt anti-corporate activity by entering into discussions with campaigning NGOs? ‘No,’ was Wild’s emphatic response. ‘You’ll share information and common ideas, but NGOs will still want to say how bad you are, rather than how good you are. You have to be willing to take that risk if you want to involve activists.’
Wild also dismissed the notion that a company could afford to ignore the concerns of a sceptical public. He
congratulated the policies of firms such as Nestlé – which has joined forces with other suppliers to tackle obesity as an ‘industry problem’ rather than a company-specific one.

Others sought a different approach to reputation management. Atholl Duncan, head of comms at Scottish Water, said his company would target all groups that acted to undermine it (see box, p27).

The risk arena
Nick Sharples, director of corporate communications at Sony Entertainment Europe, spoke at a low-key
session that turned out to be one of the finds of the conference. He pointed to ‘reputation risk management’ as
another arena in which PROs should demonstrate their skills.

‘Traditional risk management is handled in silos, without real understanding of how department heads combine to paint an overall picture,’ argued Sharples.

‘Reputational risk management recognises that a more holistic approach is needed. This is where the comms director comes in – he or she is the obvious and perfect choice.’

So many PR fiascos, said Sharples, could be averted with coherent risk management, which is why PROs must take control of the discipline.

‘One computer company was recently involved in a last-minute government lobbying campaign because it had failed to find out whether import authorities would categorise its product as a multimedia player or a computer,’ he said, explaining that the product could have cost an extra ten per cent to import if categorised as a computer.

He added: ‘This would have been hugely embarrassing for the company if it was forced to repackage and re-promote the device to consumers.’

Naturally, admitted Sharples, no CEO likes to devote resources to the prevention of scenarios unlikely to happen. However, he said PROs could command the ear of their boss if they focused on small reputation risk management projects and attached monetary value to them.

‘Doing this sort of work half-heartedly is worse than not doing it at all,’ he added. ‘It’s also another aspect of PROs’ work that won’t necessarily earn them any gratitude. That said, it will earn them boardroom respect, which is almost impossible to put a price on in terms of gaining influence on overall marketing strategy.’

But if company reputation was the emphasis of this conference, internal communications – and promoting a company’s virtues from within – was deemed to be the key to projecting a positive outward image.

For London Underground head of communications Andrew Jones, the organisation’s problems have largely stemmed from lack of trust in management. Its own studies show that only 39 per cent of staff believe what their bosses tell them. Jones said this lack of faith was a major cause of poor customer service, which in turn was harming the image of the Tube.

Last year, LU launched ‘Time to Talk’ – a series of events where managers addressed frontline workers to discuss company strategy. With 3,600 questions subsequently posted by employees, the LU claimed the initiative to be a success. The next phase, ‘Your Time to Talk’, will see managers and staff take part in focus-group-style

If it sounds more HR than PR, the message from Jones was that PROs would do well to get used to, and
become involved in, such activity. ‘We’re having to join up our comms work with that of our employee
relations colleagues,’ he told delegates. ‘We’re even beginning to talk the same language as them. We specifically want to target those staff who are unsure of where they fit within the organisation.

‘The RMT actually went mad with us because we started to publish minutes of management meetings. We’re on a mission to bust the myths spread by unions.’

How to ‘engage’ employees (perhaps the most overused word at this year’s conference) was hotly debated. According to Mike Johnson, chairman of the FutureWorkForum, PROs are facing what he called ‘new rules of
engagement’. Johnson spoke of a breed of workforce, aged under 35, for whom career and material wants are playing second fiddle to the desire for better work/life balance.

Getting staff on side
Although Johnson did not specifically suggest that internal comms should follow an ‘employee segmentation’ model, the inference was there. And his theme of targeting certain groups of disaffected staff was returned to later by Stephen Windsor-Lewis, employee involvement and comms director at BAE Systems.

‘This is the next big improvement in internal communications,’ he announced to fellow shipmates. ‘Effective messages take into account the audience they target, and it is no longer plausible to treat everyone in an
organisation as the same.’

He continued: ‘PROs probably think they do this intuitively, but unless they are more thorough in the analysis of their message dissemination, they will not know whether or not their communication has been successful. PROs need to say “OK, we’ve got ten different internal audiences, and of these, three or four matter most”.’

Windsor-Lewis recently oversaw a rather sticky internal comms project – which involved telling BAE Systems’  13,000 staff that their final-salary pensions could be threatened. ‘We knew the unions could hurt us badly, so
we found out which members of staff were more influential to colleagues than others.

‘Our pensions director spoke to these influencers and a comms plan was built around the presentation of our messages to this group. Our honesty with these people was crucial in getting the changes voted through.’ n

The snubbed journalist
Hell hath no fury like the wife of BBC business correspondent Rory Cellan-Jones, apparently. She obviously gets the full force of her other half’s grumblings after a hard day’s work at the office. ‘“Maitland Consultancy, more like Maitland Conspiratory,” she says to me,’ joked Cellan-Jones in a keynote speech. He asked why firms prefer to risk reputation by avoiding TV: ‘If I were writing headlines about PR, they’d be like “City slickers shun spotlight”, “PR professionals prefer papers” and “Broadcasting baffles bosses”.’

According to Cellan-Jones, PROs have old-fashioned notions that getting into the Financial Times or Daily Telegraph is preferable to TV. ‘The reality is that the FT’s circulation is just 136,000. Although the Telegraph’s is much higher, its business news has become a throwaway section since becoming a pull-out. The 1O O’Clock News on the other hand has five million viewers. It is a bizarre decision to not put your CEO in front of so many people. Next, Debenhams, Shell, Exxon and all the banks deserve naming and shaming here. I’ve never been able to speak to them.’

He added, half-mockingly: ‘It’s in the bloodstream of journalists to stitch up un-co-operative companies. If they won’t fill a vacuum, we’ll use someone else.’

Cellan-Jones cited a recent BBC story on how the screen of Apple’s iPod Nano had a tendency to crack. ‘Apple is one of the worst firms for not engaging with broadcasters. It refused a spokesperson, so we did vox-pops with people on the street who slagged off the products.’

He warned: ‘This is a company that feels it is able to ignore broadcasters when times are good. It is storing up trouble for itself in the future when things might not be so good. Journalists remember how they have been treated.’

The flak dodger
Atholl Duncan, director of corporate affairs at Scottish Water, used to write the types of headlines he now has to bat away, having formerly been managing editor of news and current affairs at BBC Scotland.

In 2003, after Scottish Water suffered a torrid six months of bad press – including a vomiting-bug spread through its water, and a 300 per cent price hike for business customers – Duncan was poached to turn things around.

‘Our reputation was extremely poor, so we were bold and decided to initiate a firm rebuttal policy on every story that dismissed us,’ he told delegates in a talk on deflecting bad press. ‘In tandem we promoted our community projects and our improvements to sewerage cleaning.’

Although progress was slow to begin with, Duncan said positive stories are on the increase. However, he acknowledged that corporations such as his will always suffer some level of reputation-bashing.
‘In 2004, 74 per cent of stories were positive – but this has not increased at all since. I’m trying to establish what the acceptable level of negativity is for a water utility company. This is a good example of where directors of communications should come together to share information.’

Elsewhere on board

Can community involvement policies really be measured?
This was the intriguing question asked by Jon Batterham, research director of PR evaluation company EdComs, on board the Oriana. ‘Measuring brands’ impact on reputation is an important skill,’ he said. ‘BT has just announced results of an internal study that shows reputation is the second most important concern of customers. It also found that without CSR, its reputation would decline by ten per cent.’

The International Visual Communications Association
The IVCA used the forum to launch ‘Effective Partnerships’, a code of conduct to protect the rights of agencies at pitch. As well as being distributed to IVCA members and those of the British Web Design and Marketing Association, the booklet will be sent to comms directors at FTSE 1,000 firms.

Confidence coaches
On the ship, PROs were advised on how to rub shoulders with marketing directors and CEOs. One-on-one sessions dealt with everything from voice projection to maintaining composure during awkward meetings. Speaker of note was former actor-turned business guru Garth Spiers. On the role of the PR director, he said: ‘We are all playing roles, being actors. Too often PROs are bad actors though; they don’t come in on cue, and they don’t say the right words.’

How to write a press release
Even that simplest of tasks, writing an effective press release, did not escape the attention of this year’s conference. ‘PROs forget the reader, waffle, use too many nouns, use too much jargon, and are inconsistent and careless,’ insisted Rupert Morris, former associate editor of The Week. ‘Thus the stuff they put out is a chore
to read. If you forget what journalists want, they will forget you.’

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