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!

Related posts:

1. An important role for the PR professional in managing risk
2. Nestlé Facebook controversy: another reason why PR should control social media

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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