Two words – crisis and reputation – must surely strike a chord with Australian public relations and communications professionals in the corporate world as they gear up for the 2011 year.

While what’s happened in the past is not necessarily a predictor of what may happen in the future, if I were an in-house corporate PR or communications professional going into this New Year I would feel inclined to do a quiet bit of ‘brushing up’ on the latest thinking on managing crises and reputations.

If you think that’s a good idea here are three articles that have come out in late 2010/early 2011 which I believe are a useful starting point.

PR Lessons from 2010–The Year of the Mega Crisis offers some sage advice -

o It is more important to solve a problem than chase tweets.
o Knowing how to solve a problem is not enough.
o The person in charge is not always the best spokesperson.
o Look for the positive in moments of crisis.
o Recognise chaos and complexity in crisis planning and management.

The 11 Unwritten Laws of Reputation, by Any Beal in ‘Forbes’ include gems such as “Every reputation has an Achilles heal” and “Your reputation will come under attack” and “Being stubborn is more expensive than saying you’re sorry”.  Plus 8 more that are worth a read.

WikiLeaks and the new Corporate Disclosure Crisis, also from ‘Forbes’, claims to be the most thorough article available on the issues of security of corporate documents and crisis management in the event of leaks. It’s must reading for all corporate PR and marketing professionals.

Finally, if you have a little extra time on your hands you might also find it interesting – and a tad entertaining – to read Rise of the Image men – PR Man has conquered the world. He still isn’t satisfied.  It’s a ‘warts and all’ look at PR from the ‘Economist’ (published in mid-December) but its underlying theme is around the role PR plays in reputation management.

PS:  If Crisis Management and Reputation Management interests you I have written several previous articles on these topics in PR Influences.

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What a PR disaster to start the New Year! Hard on the heals of the public relations challenges the Australian banking industry struggled against late last year a group of retailers from the Australian retail industry has scored a spectacular ‘own goal’ with its advertising campaign against the evils of online trading.

One of the basic principles of PR is to avoid giving potential ‘bad news’ stories or issues more ‘air’ by commenting on, or highlighting, them. Often it just gives the ‘other side’ more credibility.

However, through their advertising and the predicted publicity it generated, retailers have just given the online industry the arguably the biggest publicity boost they have ever had. Talk about ‘own goals’ and ‘shooting oneself in the foot’.

This has to be one of the classics ‘how-not-to-do it’ PR exercises of recent times.

If, as has been reported, only about 3 percent of all Australian retail sales are made online, then it’s reasonable to assume that probably less than 10 percent Australian consumers may be active online.

As a result of the wall-to-wall publicity on television, radio and in our papers what’s the betting that a large number of consumers have already, or will soon, be looking online to see what the fuss is all about and to really compare prices.

The big retailers have, through their ill-judged (in my opinion) actions, not only publicised online retailing and bought it to the forefront of consumer’s minds. They have legitimised the online industry and the products they are selling.

What muddled thinking could have possibly led the Australian retail industry down this track?

Why would they take out paid advertisements aimed at the 150 or so Members of Parliament when they would also be read by the 10/12 million Australian adult consumers?

Why did they ever think there was a parallel with the 2010 campaign by the mining industry? That industry was entirely different. It touched comparatively few Australians. There were a whole lot of other political factors connected with this issue.

Did they ever consider what the ‘opinion formers’ and ‘influencers’ (media, Choice etc) might think, and say, about such a campaign and what influence this would have on ordinary consumers?

Did they ever consider what their customers might think, or how they might react, to a campaign that was inherently critcising them and accusing them of not being loyal to Australian retailers?

Did they not realise that their action was like throwing a match into a patch of dry grass? That it would encourage the media to investigate the whole issue of online versus retail prices? And that it would likely encourage Australian consumers (their customers) to actually try this alternative method of buying goods?

In my pre-Christmas blog about the Australian banking industry I commented/inferred that in my considerable experience in working in PR for industry groups that there seemed to be a disconnect between what executives/management did when promoting their own brands compared to what they did when looking at the world from an industry perspective.

Little did I think that in such a short time there would be such a vivid example!

Interestingly, one of the side issues is that this campaign not come from the Australian Retailers Association. Rather it is the action of an alliance of 21 key retailers- including Harvey Norman, Myer and David Jones - who are ‘doing their own thing’ . One can only imagine the splits this campaign, and the aftermath to it, are likely to cause within the wider Australian retail industry.

In fact, the Australian retailing industry has its share of issues over unity and direction as there are several different bodies representing various sectors, including the Alliance of Australian Retailers, whose own public campaign around the display of cigarettes was not without considerable controversy.

However from my perspective the sad thing is that this debacle reflects on the PR industry. One assumes that somewhere in the undergrowth there was PR input. One can only wonder whether this was as considered as it might have been? Or did the retailers simply go on their own?

PS Since writing this blog I have become aware (through the Sydney Morning Herald) that a PR agency was behind the Australian retailers campaign. It is not my desire to openly criticise fellow PR practitioners, or PR agencies, and I did consider not posting this blog. But on reflection, given that I am an independent consultant and commentator with no PR agency affiliations or vested interests, I decided to proceed with what I believe is fair comment.

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Oh to be a fly on the wall of the PR and Corporate Heads of major banks as the Australian banking industry faces a major corporate reputation, public relations and communications challenge.

Ironically, the current perceived ‘crisis of confidence’ and “PR problem’ facing the Australian Banking industry is based on criticisms against the banks that are largely ill-founded and mis-informed.

But that’s the real PR and communication issue. If large sections of the community have got the wrong-end-of-the-stick, after it was largely our strong banking sector got us through the GFC relatively unscathed, then what does that say about how well banks are understood?

The bottom line is it’s awfully difficult for banks to be liked. Let’s face it – they will never completely be.

But they need to be at least understood, and hopefully respected. Clearly they are some way away from the ideal.

So how do Australian banking industry leaders (one of whom – Cameron Clyne from NAB- has been saying for some months that the banks have to change and work harder to earn a good reputation) think they are going to turn this situation around? 

And what advice are their PR and corporate communications people giving? Are they still sitting in their own corporate silos, wearing their own colours, still subservient to their bosses (and fighting a losing battle with their internal marketing and brand people)?

Or are they getting together as a group of PR and communications professionals, and combining their undoubted talents into addressing and solving the issue with the greater good of the industry in mind?

Having worked extensively over many years for a variety of industry groups, associations, peak bodies – call them what you will – it seems that the banking industry is facing a structural issue in its PR and communications that is far from uncommon within industries.

Simply stated it is struggling over the issue of brand v generic communication.

The heart of its problem is a real conflict and tension between the egos and individual brand ambitions of the individual banks who are busily trying to ‘get one over’ each other in the marketplace and the needs of the banking industry overall, and the stakeholders who shape its reputation, who want basic generic information and communication.

It’s not new. I’ve seen this brand versus industry argument play out at almost every industry group I’ve ever worked for.

It seems to me that the banking industry is, to use a cricket term, ‘playing down the wrong line’. 

• It’s not about telling consumers and stakeholders how good the banks are; it’s about increasing understanding about what banks do and how they contribute.
• It won’t be solved by the combined might of the individual brands throwing more at advertising. The power of the brand is great for selling products. But when it comes winning hearts and minds in the community too much of it coming from brands can arguably create the opposite impression to that sought.
• This is not a media or political issue that will be addressed by becoming more active through the issuing of media releases (as suggested in article by The Australian). It’s about getting out and actually doing things that force people to look at the banking industry differently.
• The politicians may be the symptom but it’s the community that is the underlying cause. It’s consumer and community disquiet that is fuelling the pollies. Quell the fire with the consumers and the pollies won’t have enough oxygen to keep going! 
• An industry under siege and attack needs to speak with one voice. However, the Australian Bankers Association, which has historically been more of a lobbying organisation, seems to be neither equipped nor mandated to carry out a wider and more generic stakeholder communication function.

In fact I can’t help but feel for Steven Muchenberg, who as head of the ABA has been handed a poison challis.

Effectively the banks are saying – “we’ll keep all the good stuff to the brands, thanks very much. But when the going get’s tough, and we want to keep our heads down, we want you to go out and defend us”.

Go to the ABA website and it appears more like a repository of facts and information about the banking industry – great as a defensive mechanism aimed at blunting the attacks from pollies, consumer groups and the like. But it does little to proactively promote the banks.

Individually, the banks are doing a lot to be good community citizens. However, the only way to find this out is by delving into the ‘about’ tabs of the web sites of the majors – CBA, Westpac, ANZ and NAB. Nowhere can I see is the totally of that effort being communicated.

Putting it crudely it seems as if the banks control the proactive PR and marketing stuff and the ABA is there as a backstop and to be the fall guy.  Sorry – but that approach is ‘old style’.

To achieve a better corporate reputation the banking industry as a whole needs to be developing and implementing long-term outreach PR and communication programs that ‘connect’ and ultimately add-value to the Australian community.
 
However, in order to do this the industry would need to collectively agree – and if necessary self-regulate themselves – as to what PR and communication initiatives should be undertaken by brands, and at what point this devolves to the industry.

To do this it seems as if the banking industry has to rethink the purpose and role of the ABA.

It seems the ABA needs to become more than a lobby, research and industry data collection organisation.  Rather it needs to become a more reputation management, PR and communications-driven industry association and given the necessary budgets to fulfill this function.

The RBA needs to create an umbrella for the banking industry. Under this let the brands do what they do best – sell products and services

Do this and maybe- just maybe – 10 years from now the banking industry might just find itself in a better place!

But as always the issue is whether those giving the PR and communications advice are thinking of the industry rather than the brand they represent. And whether the CEO’s are listening!

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The aftermath of the BP Gulf of Mexico crisis creates a great opportunity for PR Managers or corporate communicators to sell top Australian management within their organisations on the need to think more seriously about corporate reputation management.

The importance of PR and crisis management, and the corporate reputation problems BP faced as a result of what started out as routine operational matter, have been well documented.

Most of the PR commentary has focused around the detail of how BP handled the crisis with an emphasis on what they could or should have better, how they handled the media and, in particular, the perceived shortcomings of BP Chief Executive Tony Hayward.

Of course it’s a wake-up call for all in-house PR professionals to make sure that not only do they have a crisis management plan in place; also to ensure that key executives are thoroughly media trained. It’s an area that I’ve not only written extensively about for a number of years; I’ve helped organisations put in crisis management structures and processes. And helped them test them!

But to me the lessons of the BP crisis go much deeper for in-house PR professionals (and those advising from the outside).

I believe it really provides an opportunity for those in-house PR professionals who think strategically, and who want to be seen as part of the senior management team, and to show how important reputation management is, and the role that PR and communications can play.

In my experience of working with in-house PR Managers for over 25 years, they face a number of challenges to make an impact in this area of reputation management.  This is because:

1. The PR or communications function has often grown with an implementation rather than a strategic bias to it. That makes it difficult to change internal mindsets and get a foot under the top table where strategy is decided.
2. Management, if it thinks of reputation at all, fails to understand or appreciate that there are both tangible and intangible contributors to reputation and that in many instances it is those that are intangible that can potentially have the biggest impact (good or bad) on reputation.
3. Getting serious about reputation involves looking hard within the organisation to uncover faults and issues and many in top management prefer to leave those stones unturned. In particular they often fear it will bring an element of negativity to the table, when the CEO, and in particular the Marketing Director, just want to look forward and think positive.
4. Public companies equate reputation with their share price and they think that investor sentiment is what matters. Blindfolded by their financial advisors, and in fear of transgressing ASX rules on disclosure, public communication becomes narrowly defined as ‘market communication’.
5. The PR or Corporate Affairs Manager, while recognising the need and opportunity, often lacks the in-depth knowledge to argue the case not only for reputation management but for him or her to manage and implement it. It’s a lonely task being the sole advocate!

Articles I’ve written on crisis management and the role of corporate PR  in recent months and on the general topic of corporate reputation over the years at PR Influences all provide further insights.

However, in the last few weeks a great white paper entitled ‘Reputational Risk Management: A Framework for Safeguarding Your Organization’s Primary Tangible Asset’  by Jeffrey Resnick of Opinion Research Co has been published.

If you have a serious interest in reputation management, it’s a ‘must read’ as it makes the case for better reputation management and provides examples of companies that have analysed their reputational risk profile. Furthermore it advocates the institution of corporate reputation audits and offers a blueprint for their implementation.

Another resource in this area which is one of my favourites is a PowerPoint presentation on Reputation Management from the London School of Public Relations. It’s about 15 years old, but it’s got some good stuff in it for anyone who wants to build a case for why their organisation should take corporate reputation management more seriously.

If anyone else has other sources that will help shed light on what is a complex subject please share them.

PS. On a lighter note it’s now possible to hire help from an external ‘Cyber Reputation Manager’ who will eradicate all adverse comments about your organisation on the Internet.

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I’ve always subscribed to the view that a large part of corporate PR, and a prime role of the internal PR Director or Manager, or the external specialist PR consultant, revolves around first identifying, and then mitigating against, risk – reputational risk.

This often means that in the serious end of the corporate world the internal PR professional, or the external specialist PR consultant, has to often come across looking more like the mature corporate lawyer than the young gung-ho PR spin doctor.

In the Australian operation of one multi-national I’ve done some work with over recent years the PR people are, as a matter of course, bought into every significant project just before its ready to be announced or unveiled.

Not only are they older rather than younger – and they’ve been ‘around the block a few times’. Their specific role is to act as the devils advocate. Their task is to look at things from the perspective of: “What is the worse case scenario?” “What might possibly go wrong?” “How could this initiative or announcement backfire on us?”  They try to second-guess and test every aspect of a project from the perspective of those who will be impacted by it.

It’s surprising how often those sponsoring or developing projects get so close to them that they simply fail to see the wood for the trees. Bringing an external, and unbiased, perspective to bear, while sometimes seen negatively as ‘running interference’, is simply just part of good risk management.

The fact that PR might have a role to play in risk management might surprise many, especially given that the perception that the media, and others, often have of PR professionals is of them as ‘spinners’; always wanting to package something and be as aggressive and outgoing as possible.

I also think that within the PR industry there’s a generational dimension around this issue. PR and communications professionals such as me, who have been working in the corporate sector for decades, just naturally take this devil’s advocate approach to every project.

I take the view that you have to know the possible negatives before you can build the positives. And that any communications program needs to identify, and mitigate, the risks.

From my observation those much younger often don’t come from the same perspective. They are often great on the positives, but sometimes without any comprehension of what might go wrong. As a consequence their messaging can often come back to bite them.

What got me onto this topic was an article in the long-established US PR publication ‘O’Dwyer’s Magazine’ on the BP disaster from Fraser P Seitel, a PR author and seasoned communications consultant.

He makes two key points around crisis communications, and the BP situation specifically, both of which relate to risk in a situation where everyone should be aware of the risks.

First, says Seitel, never predict what might be the consequences (and BP early on in the crisis said they thought the Gulf of Mexico spill would result in a “very, very, modest environmental impact”).

Second, downplay expectations. As Seitel says, throughout the crisis BP constantly thought they were close to solving the problem – when they were not.  As Seitel says, “it is better to “low ball” potential outcomes, i.e. anticipate the worst than it is to get everyone’s hopes up and risk having them dashed”.

To me Seitel’s practical example demonstrates the point I am trying to make i.e. that a substantive role of responsible corporate PR or communication is about advising our corporate masters to be cautious about the consequences, rather than (over) confident about their own abilities. And thinking too much about sound bites on the evening news!

Talking about sound bits the Rudd demise, which I’ve already given a perspective on (an abbreviation of which was judged the BRW ‘Letter of the Week’ in their July 8-14 edition) is not unconnected to this theme. He seemed to surround himself with a bunch of 30 year-old advisors, who appeared to be pre-occupied with the 24 hour news cycle. They seemed to have no conception as to how to mitigate against risk.

It would be interesting to know how many internal PR professionals in Australia, play the role of the inqusitor. It’s often not a popular role. But it can be worth its weight in gold.

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First it was Toyota with a major crisis that hit the world headlines. Now its BP.  PR professionals and crisis management experts are having a field day critiquing how each organisation has performed in the heat of battle. So, what does this mean for Australian PR Directors and Managers?

Ensuring that your organisation is ‘crisis-ready’ should be a key responsibility for any Australian PR Director or Manager.  You can reduce the risks by planning and training for the crises that you think are most likely to hit your organisation.

During 30 years in the PR business, I’ve had quite a bit to do with crisis management. I’ve helped clients cope with a few – but to be honest in the scheme of things they’ve been pretty minor (one in this category was a Christmas cake with stones in it – but not so minor to those who broke their teeth on Christmas Day!). I’ve also written quite a few articles on crisis management in PR Influences during the last decade.

But I’m a great believer in ‘horses for courses’. My forte is not handling the hurly-burly of a full-blown crisis that is a number one news story. There are plenty of PR and so-called crisis management experts out there who get their kicks from being at the centre of the storm.  They are good at it – especially handling the media aspect.

Rather my skill, and experience, is more at the strategy and ‘thinking’ end – putting the systems in place to handle a crisis. I’ve introduced crisis management structures, protocols and processes to a range of organisations, including some multinationals, across Australia and New Zealand. It’s my experience that there’s not many PR people who work at this end of the crisis spectrum.

The role of the PR Director or Manager in crisis management is like a football coach. You need to select a team, choose a captain, work out what’s likely to be thrown at them, develop a game plan to counter it and then practice.  The game won’t pan out exactly as you might expect, but you have a better chance of winning if you’ve done the preparation.

Look over my checklist to see how your crisis-ready your organisation  is:

1. A formal crisis management plan, protocol or process. If you are controlled from off-shore the plan needs to be workable in Australia. (Don’t scoff -  some I’ve seen in multinationals aren’t!).
2. A senior member of the management team (or ideally the CEO) to have ownership.
3. Written procedures, guidelines protocols that are accessible to those with crisis responsibilities.
4. An analysis of likely risks, with scenarios, positions and outcomes for each.
5. Delegated executives throughout the organisation with specific crisis responsibilities relevant to the crises that might impact on them.
6. Prepared documents, statements etc (in some cases even a dummy website set up).
7. Prepared media and stakeholder lists.
8. To regularly train and practice the team against your most likely scenarios.
9. Media training for your key spokespeople – again specifically around chosen scenarios
10. Communication protocols that link all the key people in the crisis management team in the event of an alert.

Most crises that hit companies are not of the magnitude that impacted Toyota and BP. However, most still have the ability to do reputational damage if they are allowed to fester and get out of control.

Whether large or small, studies show that for most crises it’s how they are managed in the first 24 hours which is the most important. As a PR Director or Manager you can reduce the risks of a crisis doing reputational damage to your organisation by planning and training.

I know it’s not exciting or sexy. But I can assure that it’s an investment well worth making. And it’s another way to demonstrate the role of PR to the C-suite.

See my blog:  Toyota – Oh what a shambles!

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Australian and New Zealand PR Directors and Managers and their PR agencies should be reviewing their roles, responsibilities and protection as legal proceedings on both sides of the Tasman put corporate public relations practices in the spotlight.

In Australia 10 former directors of James Hardie are arguing about a press release in the NSW Court of Appeal. They were found guilty last year of having breached their duties based principally on a contention by the Australian Securities and Investment Commission (ASIC) over what was said in the press release relating to the funding of Hardie’s asbestos compensation trust.

In New Zealand , where there has been a flurry of actions instigated by its Securities Commission, Lombard Finance is facing criminal prosecution, accused of misleading investors through its prospectus, road shows and other company communication efforts.

It’s ironic that in these two cases it’s been the Directors of the company that have faced the music. 

To date, as far as I am aware, no PR Director or Manager or a PR agency has been caught in the legal web, although James Hardie’s former head of public relations Greg Baxter (now with News Corp) was reportedly grilled intensively at the court hearings last year (but as a witness – not as a defendant).

And ironically one of Lombard’s Directors facing prosecution– Lawrence Bryant – ran a public relations agency in New Zealand for a number of years!

So if corporate PR practices are being put under the regulator’s blowtorch what does it mean for those in work in, and advise on, public relations and communication – from within the company and from external PR agencies?

There’s no need to panic. But there is a need to address the issue in a deliberate and formal manner so that protection is afforded to all.

I think that focusing on the following three actions will provide 90 percent protection for PR Directors and Managers and/or PR agencies:

1. All those who might draft or release corporate communication must have formal indemnity protection. In my previous PR agency life all contracts included this provision (although whether there was always a formal contract with the client is another matter!). PR Directors or Manager’s should insist on this as part of their terms of employment and this is especially important if they act as the organisation’s spokesperson.
2. At a policy level there should be a written, codified procedure for the approval and release of corporate public communication which the PR Department and/or PR agency formally agrees to. This should include appropriate levels of authority for the approval of all materials – and their release. The aim of this is to ensure that if the internal or external PR advisors follow this procedure they are automatically afforded a degree of protection (and if they don’t they only have themselves to blame if they find themselves in the gun).
3. At the implementation level ideally every piece of written corporate communication that is released (or any messaging or scripts that are to form the basis of answering questions) should be formally signed as approved by the responsible executive. In the old days a client had to sign everything produced by its ad agency.  PR people have, in my experience, been lax in this regard!

For the PR Director or Manager there’s a double challenge. On the one hand they have to act on behalf of their organisation if their PR agency decides they want to have greater indemnity protection. On the other hand they have to negotiate an appropriate indemnity for themselves.

There’s one other matter to consider. That’s when an organisation is clearly facing challenging times and the corporate communication is demonstrably risky. In such situations it is always wise for the PR or communications people to draw up specific agreements and procedural

Of course, all kinds of side issues arise. Merchant bankers, lawyers and every Tom, Dick and Harry like to get involved in press releases and public communication. Not to mention the Corporate Counsel!

That’s fine. What I’m proposing is unashamedly aimed at protecting the butt of the PR and communications people. If others get in the act and there’s a foul-up so be it.

My three actions sound simple. But from experience they can be difficult to implement. Over my career I’ve had many arguments with the legal counsel of clients about how communicators need to be, and should be, protected by indemnification. And in the rush of battle getting your Managing Director or CEO to actually countersign a simple press release can be seen as awfully pedantic and small minded.

Nonetheless times are changing for Australian and New Zealand public relations and communications’ professionals.  By taking a more professional and disciplined approach we might just help keep some of our masters out of Court. Then they would thank us!

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Australian PR Directors and Managers looking at the Nestlé Facebook controversy that is reverberating around the marketing world should be looking behind the conversations that are taking place about the power of the consumer and what Nestlé  is judged or perceived to have done wrong in the way it handled consumers.

The real questions for those responsible for public relations and communication revolve around the principles that govern the use of social media within your organisation.

The fundamental question is whether companies really understand the ramifications of getting into social media.

In all the commentary that has flowed over recent days by far the best I have seen is ‘7 social media lessons from Nestlé’s Facebook missteps’ from Andy Beaupre on ragan.com.

But in an otherwise excellent overview piece Andy doesn’t touch on who should control social media.

To me it’s a fundamental issue that all organisations who embark on the social media journey need to get right.

It’s about the purpose and authority of public relations within an organisation and the role of PR versus marketing. 

I posed this question last November when I wrote that social media should be under the control of PR.

Among other things I pontificated that “social media exposes any organisation to things going horribly wrong and resulting crises and reputational damage. That’s why PR has a strong case for control”.  

What I didn’t comment about in that article, but which the Nestlé example shows, is that any social media gaffe has the real potential to break-out into mainstream traditional media. And who is expected to deal with it then? The PR Director or Manager of course!

Most Australian organisations of any size have strict policies, rules, protocols and processes around dealing with the media. For large organisations only executives who have undertaken media training are allowed anywhere near the media – and often even senior executives do this having their hand held by the professionals.

Yet with the advent of social media we increasingly find that the gung ho people in marketing, often working with a bunch of people from ad land or interactive agencies, are increasingly being allowed to set up direct communication channels with consumers. There’s little control over them, and in the main they have no knowledge, or experience, let alone training, about how to engage or converse with critics.

What’s also overlooked is that increasingly consumer and environmental advocates, who for a long time have had to try and get their message to the consumer through the media gatekeepers, now find it much more productive to use social media channels.

While an organisation may effectively block or barricade the front door (i.e. through traditional media) these people can now come in an unlocked back door (i.e. social media), knowing that it’s a soft target protected by a bunch of product and brand people who have no idea about issues. They can easily be brushed aside and/or used. It just another version of guerilla tactics!

If I was an Australian PR Director or Manager and part of my KPI’s were based on maintaining levels of corporate reputation I would want to ensure that I had control over all the touch points that impact on that reputation.

The Nestlé Facebook controversy should be a wake-up call to ensure that social media becomes a PR responsibility.

Read an article I have previously written in PR Influences which covers:

• How does the advent of Online change communication strategy and tactics? 
• How do you cope with rumour, innuendo and falsehoods online?
• Why pr is the tool to use in online communities?
• Five tips for engaging with the online community

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For anyone working in corporate PR in Australia the Toyota recall issue deserves study as an example of one of the best “how-not-to-do-it’ in crisis management.

For those newer to the game it will provide some valuable insights into processes and pitfalls in a genuine crisis.

 For PR ‘veterans’ like myself, who have been around the block a few times, it will likely bring back a few memories.

In a crisis there are three key determinants in how successful they are handled:

1) What’s the company’s culture and attitude to disclosure?

This is where Toyota’s problems begin (as do those of so many companies). Tom Gable, a San Deigo PR guy who was part of a international PR group I belonged to many years ago, has a great blog that backgrounds Toyota’s real failings in this area.

Tom, apart from his own insights, provides some telling quotes from a Feb 6 article in the Wall Street Journal, the best of which I think is: “In Japan there is a proverb, ‘If it stinks, put a lid on it”.  Alas, this seems to have been Toyota’s approach to its burgeoning safety crisis”.

Then Ken Makovsky, one of the smartest PR guys I’ve ever worked with, who has managed to grow one of New York’s largest independent PR agencies – and resist being taken over by the voracious ad agency conglomerates – has a nice little commentary piece.

After concluding that all the fundamentals of crisis management communications are being violated, he ends by posing the question – “Is Toyota suffering from a case of ‘historical amnesia’ so profound that the company’s communications efforts have collapsed in exhaustion?”

2) Who’s controlling the communication?

The blog Ishmael’s Corner fromLou Hoffman hits the nail right on the head when he says “I am convinced every crisis reaches a fork in the road in which a company must make a choice on who’s leading the charge, legal or common sense”.

He then does a great job of analysing three Open Letter’s in the US from Toyota (its best to go back and start from his first one) showing how they seem to have moved from a legal to a communication approach. For those who have been through these exercises it will likely bring back memories!

3) Who’s fronting for the organisation?

This is the nightmare that many in PR, who have the task of being the organisation’s spokesperson, dread.  It’s the ‘job from hell’. In some cases you can feel that you are the sacrificial lamb. You need the ability to turn penetrating media questions from negative to positive, to be fluent and right ‘on message’.

When it comes to Australia, regrettably, I don’t think Glenn Campbell, Toyota’s local spokesperson ( a former client and probably the most sensitive, conscientious PR professional I have worked with) did the job that was needed with TV or radio. He appeared a tad defensive, he got a little tangled in his delivery and his messaging didn’t come out as I am sure he had hoped. Probably a 7/10 – but when a 10/10 was needed!

However, it would be grossly unfair to shoot the messenger. As I think is clear the basic problem is with the organisation, its culture and apparent attitude and a ‘disconnect’ with the real world (can you believe it was still running TV adverts for the Prius the day Campbell was fronting the media announcing a recall!).

So what’s the take out from all this?

There are many Australian PR Directors and Managers who work for organizations with overseas masters who would privately concede that either because of Toyota-like in-built cultural issues, or simply because there’s a lack of understanding as to how things are done in Australia, their worst nightmare is a crisis or product recall.

In fact my own experience is that it is only five years ago I had to create from the bottom-up a complete crisis management plan, including protocols and processes, for the Australian and New Zealand subsidiary of one of Europe’s largest conglomerates. What we did, and the questions and issues that this exercise created, ended up prompting Head Office to follow ANZ’s lead and start to put an international crisis framework in place!

The bottom line is that the Toyota episode, which clearly still has some twists and turns left in it, should provide the motivation to review or audit just how prepared you are to face a crisis – and most importantly, if you have overseas masters, what processes and protocols exist between you and they.

PS.  You might be interested in, or get some value from, two articles I have previously written in ‘PR Influences’.

1)  Media Relations: What type of spokesperson works best?

2) Media Relations: How well prepared are your management to talk to the media?

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