It would be foolish to suggest that the drastic demerger of British Gas
is the result of bad PR. Looming competition and the millstone of hugely
expensive supply deals led the company to conclude that a problem
divided is a problem halved. But its PR problems cannot have helped. And
there is little doubt among observers that the concomitant departure of
chief executive Cedric Brown was hastened by the ‘fat cat’ row which his
salary hike originally sparked back in 1994.
People have been falling over themselves this week to say how well liked
and respected Brown is within his own company and the gas industry. This
may be true, but the reputation of British Gas suffered because it
ignored the PR consequences of the remuneration issue.
Perhaps the company has now learned its painful lesson. The appointment
of PR strategist John Wybrew to the board would seem to offer hope. So,
hooray for PR. Now everyone will realise how important it is to take
strategic communications advice before blundering ahead with decisions
which may damage their companies’ reputations, won’t they?
Really? The dismal reality is that, despite the litany of recent
corporate blunders, there is still little acceptance of the link between
reputation and company performance.
Journalists have been furiously trying to wring a confession out of
British Gas that Brown’s departure is linked to the salary debacle.
Perhaps out of loyalty to their fallen hero, the company has so far
demurred. What a shame. What a missed opportunity to make a clean breast
of it, admit that they got it wrong, and put the row behind them.
Instead the smell will linger on.
Too many managements would rather blame the media, the markets, the
Government, Saddam Hussein, the wrong sort of snow, or the tooth fairy,
rather than admit that their problems are of their own making. This
blindness to their own faults is particularly evident when it comes to
public relations. The task for the PR profession is therefore to
establish concrete evidence of the correlation between business
decisions and the reputation of the company, and between reputation and
business performance. This means not only evaluating the bottom-line
value of successful PR, but proving how companies can suffer through a
lack of PR foresight.
Even with such apparently corking examples as British Gas to hand, it
will be difficult to pin down. But without such evidence, PR may never
be seen as anything more than the icing on the cake in good times, and a
dispensable luxury in lean times.