PR and Reputation

ISSUES, CRISES AND REPUTATIONFriday, 7 January 2011

Itʼs about ...Issue identification

Issue evolution

Business continuity

Crisis planning and management

Crisis communication

Planning

Hostile acts

Business continuity

Role of media

Lobby groups & activists

Ethics and CSR

Impact of new technology

... and REPUTATIONFriday, 7 January 2011

While this lecture is about all these things, in the end it boils down to one key topic ...

• REPUTATION

Not only an organisation’s reputation, but yours as a PR practitioner.

What’s an issue?

nounan important topic or problem for debate or discussion

In PR terms:Something that prevents an organisation from operating effectively

Friday, 7 January 2011

What’s a crisis?

noun ( pl. -ses |-ˌsēz|)a time of intense difficulty, trouble, or danger : the current economic crisis


In the PR context

Something of concern to “publics”and/or stakeholders

Linked with reputation

Issues lead to ...

Crises lead to ...


Issues & crisis management (communication)

“…helps organisations properly manage issues before they emerge or escalate into critical problems.”

– edelman.com


or ...“Issues management is really a form of risk management. It

reduces the risk of the organisation being worse off than it would be if it hadn’t dealt properly with the issues.”

Strategic Public Relations – Harrison, 2008


Harrison offers a pretty sound definition of issues management.

• (see quote on slide)

• Or, as your reading says (Galloway, p2): “it’s about picking up the signals from the environment”.

Where does it come from?

Age of risk

Corporate, govt. behaviour

Friday, 7 January 2011Harrison alluded to the fact that risk is the parent of this discipline. As we’ll see, any risk to a company is an avenue for issues and crises to develop.

Many people believe we are living in an age of risk. This then prompts them to write about and agitate about all sorts of perceived problems, from he environment to justice. If they feel even stronger they get involves in protests. These are issues.

Corporate and government behaviour is increasingly being scrutinised. No more so than in the past three to four months with the latest global economic meltdown and recession. People are less trusting of those in positions of power.

As a consequence, organisations (business & govt) have to be more aware of the warning signs of discontent.

DifferencesIssue:

• Starts as a factor

• Mid to long-term

Crisis:

• Event

• Happens quickly

Friday, 7 January 2011• An issue is an external or internal factor, usually lasting over a mid-to-long timeframe, and usually involving an organisation within an industry, topic or situation. It can represent a serious obstacle to achieving the organisationʼs objective and cause damage to not only its reputation, but its fundamental business, if not managed well.

• A crisis is an actual event or occurrence, usually of short timeframe, which puts a single organisation, and its methods of operation, under intense public and media scrutiny and which can, if not handled properly, materially impact on the business.

In simplistic terms, it is often the case that an issue is an implied or potential event which can be proactively managed, while a crisis is an actual event or occurrence which requires a reactive response.

How an organisation responds to an issue or crisis can often have more impact on public awareness than the event itself. Thatʼs why it is important to develop a plan for dealing with both issues and crises.

The aim is to have strategies and tactics in place that will allow your organisation to always be perceived not only to be in control of the situation but also sensitive to the concerns of key stakeholders and others with a legitimate interest in the matter.

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An issue is (usually)… A crisis is (usually)…

Long-standing, slowly developing, or predictable, that impacts on an industry or product category

An emergency or event that is unforeseen or seen as only a remote possibility, that impacts on a single organisation

Something that can be identified, monitored and managed as it emerges

Short-lived (although a crisis such as product tampering or extortion can last for several weeks)

Brought into the public arena (or at least fuelled) by protagonists or activists and reported on by media

Attracts significant - and sometimes hostile - media attention. In extreme cases, the crisis can be ‘championed’ by media

Friday, 7 January 2011Summary of the differences between issues and crises

Examples

ISSUES CRISES

Impact of new technologies e.g. genetically modified foods, stem cell research

Accidents that kill, maim or injure people e.g. industrial accidents, fire, explosions, plane/train crashes, food poisoning

Alleged side-effects of products e.g. food products that cause obesity or IT products that emit radiation

Environmental concerns e.g. discharge of waste, not meeting environmental standards, OH&S practices leading to injury or death

Industry-wide corporate practices e.g. director or management corporate remuneration

Organisational-specific corporate malpractice e.g. fraud, embezzlement, anti consumer practices


PRʼs role

Managing the outcomes

Lessening the damage

Guards reputation


Pr has three roles to play when it comes to crisis communication.

1. It manages the outcomes. Of course, “manages” is not an ideal word, insofar as crises are virtually impossible to manage. Of course things such as the media can be “managed” in a sense, in that they can be kept up to date with information. But the end result of their reporting can not be controlled.2. The management takes the form of lessening the damage.3. Guarding reputation is linked with how successful a crisis communications program is. Some orngistions in a crisis can emerge with reputations often enhanced, despite the serious nature. For example, the September 11 attacks in the US. Fire 7 rescue authorites emerged with reputations enhanced, but intelligence agencies were criticised for not cooperating to prevent the attacks.

Hereʼs the thing ...

Reputation Management

“A good image is a terrible thing to lose – 30 years of hard work can be destroyed in just 30 seconds.”

– Bill Patterson, Reputation Management Associates


all That said, reputation can be destroyed instantly.

Research commissioned by the airline shows the media reports have seriously hurt Qantas’ reputation.“I have no doubt over the last eight weeks given some of the (media) articles… we have suffered brand damage.”

- Geoff Dixon, QANTAS GM


Reputation and image

Image can be bought and is short term. It is largely what an organisation says about itself.

Reputation is earned and built over the long term. It is largely what others say about an organisation.


Environmental scanning

“... the whole setting in which the organisation operates”. (Galloway)Friday, 7 January 2011

Understanding issues management will help you grasp how an organisation relates to the factors that surround and effect it. In this context, “the environment means the whole setting in which the organisation operates” (Galloway).

We’ll look at environmental scanning in more depth next week. Although this week we have copies of the local paper, and will briefly look at some examples. But it is at the heart of all you will do in this unit, and in a PR issues management role.

West Australian 23 Feb 2008

Holly and friends - Australia's first cloned calves(Photo: The Institute of Reproduction and Development)


What Iʼd now like to do is provide some recent examples of news items which could be considered as “warning signs”. Some are in their early stages, others developed into ongoing problems.

PRʼs role• Engage and support management • Plan for crises • Identify and monitor issues (scan)• Assess risk and probability • Communication with stakeholders • Manage the media


SO in summary, PR’s role is to ....

These are the things you’ll have to keep in mind as you work through your assignments.

Plan, donʼt pray• Monitor the environment • Prepare a crisis management plan • Think and act strategically • Form a crisis response team • Never say never • Know your stakeholders


The key strategies to work with in issues and crisis management are:

Your armoury•Environmental scanning •Vulnerability audits•Media training •Disaster response training •Disaster recovery planning •Stakeholder management planning


These are some of the tools of the trade in this highly-specialised discipline. We will be looking at two in (red) specifically.

Read, listen, watchPress

• The Australian,

• The West Australian

Radio

• Talkback, 6PR, ABC 720

TV

• ABC 7pm news

• 7.30 Report

• Stateline

• Insiders

Web

• Perth Now


From today onwards, I’d expect that you would be closely monitoring at least these media in order to build a profile, or audit, of the issue you will follow.

Features of issues and crises

•Issues have lifecycles


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Phases

Potential Imminent Current Critical Oops, missed that one!

LATENT

EMERGING

HOT

FALLOUT

“Pre”Potential

Public

Critical

Dormant

Friday, 7 January 20111. How issues develop and progress (Baskin and Aronoff)

LatentWe describe an issue as latent when it is in the process of being formed.

EmergingAn issue is emerging when • it begins to appear in journals and specialty media• it is adopted by a lobby or special interest group• opinion leaders become aware.

HotA full-blown issue in current debate

FalloutAn issue in this mode is ready to be rekindled. Think of the remnants of a fire. Sparks can rekindle the original hot issue any time because the issue had high visibility; awareness of the general public was high.

Botan (Blue)


Another two view of the stages of an issues. It just gets down to the wording. Any of these models will suffice.


Examples of issues moving through lifecycles. Could these have been prevented from becoming crises?

“If it hadnʼt been for those pesky kids!” Like the plot from an old Scooby Doo cartoon, GlaxoSmithKline has found itself in the middle of an unseemly PR disaster over its false and misleading advertising claims concerning the Vitamin C content of its supposedly ʻhealthyʼ Ribena brand drink.Who would have thought that one of the worldʼs most powerful drug and food companies could be undone by two 14-year old New Zealand high school pupils? But it was! The two kids performed their own science tests to determine the sugar and Vit C content of Ribena, and found the content claims to be completely false. Contacting the company, the pupilsʼ letters and emails were ignored then fobbed off by the powerful corporate. After securing some media interest, GSK has been investigated and found guilty of false and misleading advertising, marketing and packaging, and now faces up to $3million in fines; also, the companyʼs new Ads donʼt mention any Vitamin C content!

Friday, 7 January 2011Honesty in public relations is supposedly the cornerstone of the discipline – at least thatʼs what is taught at university. Clearly, while many PR people believe in this ideal, some companies and CEOs do not.

The most recent case of corporate dishonesty in Australia involved GlaxoSmithKlineʼs Ribena blackcurrant juice, which was found (by two 14-year-old NZ students) not contain the vitamin C the company claimed it did. The company then fobbed off the children, who had written to it. The company was fined $202,000 and forced to admit there were no noticeable quantities of vitamin C in the drink, contrary to information on the cartons. It also admitted claims that blackcurrants contained four times the amount of vitamin C of oranges might mislead people about the content of its undiluted Ribena product. Pretty damming stuff.

On 6 May the company launched an advertising campaign, fronted on TV by John Sayers (Managing Director of GSK Consumer Healthcare, Australia). Bad move, John. Nice try, though. Consumers have been stung by this lie for too many years. How many parents have raised children thinking they were receiving a good dose of vitamins? A heavy does of advertising does not address issues relating to credibility. Advertising is seen by an ever-sceptical audience as lacking credibility. After all, the company is paying for it. What is needed is a healthy does of third-party endorsement from a reputable source, via PR. The trouble is, what reputable person (Iʼm thinking scientist, sportsperson, celebrity mum or dad) would touch this product with a barge pole.

All Sayers could say in the ad was: “The testing method used to determine the level of Vitamin C was unreliable and we were unaware of this at the time.” Sure you didnʼt, John. If the method was so unreliable, why did you put the wrong information on the packaging. Deception.

He continued: “We are sincerely sorry for any confusion caused." Oh thanks, John for letting us know we were “confused”. As if we were at fault.Itʼs sanctimonious, badly-worded advertisement. They have treated consumers with contempt. Who would want Ribeena? Iʼve got the solution to their dilemma. But Iʼm not about to offer free advice to this company. Iʼll save that for my students.

The issues

False product claims

Abuse of corporate power

Arrogant stakeholder relations

Inept PR response

Friday, 7 January 2011As a quick case reader, the issues include (not in order); • false product claims by GlaxoSmithKline# •# abuse of corporate power# •# infusing arrogance in stakeholder relations (with the kids)# •# inept PR handling leading to adverse publicity

The outcomes

Consumers empowered

Rebranding

Reputation damaged

Stakeholders shaken

Fines

Friday, 7 January 2011OUTCOMES# •# demonstration of consumer empowerment# •# massive product rebranding and new communication campaign costs# •# reputational damage# •# dent in stakeholder confidence# •# and $3mill financial penalty via the punitive finesOther questions also needing answers;# •# where was Glaxoʼs CSR and corporate leadership?# •# Where was GSKʼs scientists and product teams in all this duplicity?# •# Where were the food and drink marketing regulatory bodies before the school pupils got involved?# •# What was the role of advertising and PR agencies in perpetuating the Ribena health myth?

Avoiding issues

Environmental scanning (or monitoring) is now the fastest growing category of public relations research.

REHAME, Media Monitors, Google, Technorati

Friday, 7 January 2011Anticipating issues issues can obviously help avoid some crises and, in turn, protect reputation. How do we do it? The answer is by “environmental scanning”, which I mentioned earlier in this lecture, and in week 3, when you had to look at the role of Media Monitors.

What is it?

“The monitoring, evaluating and disseminating of information to key decision makers within an organisation.”

(Public Relations: The Profession and the Practice.Lattimore, Baskin., Heiman and Toth. 2007)


Anticipating issues

“Environmental” scanningMedia

Blogs

Speeches

News forums

Customer service feedback

Employee feedback

Stakeholder satisfaction surveys


What environments?

Social

what’s happening in society?

Political

Physical

the immediate and personalspace we live in


Key to media monitoring

Don’t just scan for direct mentions

Look at trends, developments and what your competitors are doing.

Examine PR problems and opportunities


Role of the PR practitioner

“Boundary spanner”

Devil’s advocate

Be honest

Friday, 7 January 2011More than any other executive, the PR practitioner must be aware of what is going on, both inside and outside, and how each of the organisation’s functions inter-relate.

I practice this is often hard to achieve. However, in practising PR, a young practitioner can often demonstrate the profession’s worth by making their employer aware of trends, dynamics and possible outcomes.

• This puts the PR professional in the position of “boundary spanner” ... the analogy being that he or she is a link between all areas, audiences and influences that effect an organisation.

• The role can often be sensitive and complex, and the PR person will often find themselves acting as devil’s advocate, arguing a case from both sides.• In this capacity you will sometimes have to present scenarios that may offend a major public, so you’re going to have to be honest and brave enough to provide advice management may not want to hear.

In this role, you move away from being a communicator, to what Newsom and Turk (2004) call an “interventor”. I liken it to being a broker. You provide communications advice

PR and Reputation

Education

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