Have you ever heard of Odebrecht?

It was inevitable that it would be a worldwide story. Two construction workers killed in a partial collapse of a stadium being built to host the Football World Cup opening game in Brazil next year.

How did the relevant Brazilian parties respond to this news?

When contacted by Reuters shortly after the incident, the building company, Brazilian industrial conglomerate Odebrecht, declined to comment. I accept they didn’t have all the information but to not even offer an expression of sorrow is pretty extraordinary.

The stadium owner released a terse statement that read “The board of Sport Club Corinthians Paulista hereby deeply regret the accident earlier in Corinthians Arena. No other information at this time.” Can you imagine a British company getting away with that?

Contrast that with FIFA’s response: "We have learnt of the death of workers with great sadness … The local authorities will fully investigate the reasons behind such a tragic accident."

In the absence of information, you won’t be surprised to hear that there was immediate speculation that the collapse could delay the delivery of the stadium in time for Fifa's December deadline. And that the media rehashed past stories about how Brazil has struggled to deliver stadiums, public transportation improvements and other World Cup-related projects.

When Odebrecht did release a statement, I don’t think it’s one that you or I would have written:

“Odebrecht Infraestrutura and Sport Club Corinthians Paulista regrettably inform that an accident occurred this afternoon on the construction site of Arena Corinthians that led to the death of two workers: Fábio Luiz Pereira, 42, a Munck operator/driver from the company BHM, and Ronaldo Oliveira dos Santos, 44, an assembler from the company Conecta. Shortly before 1 p.m., the crane lifting the last module of the stadium’s metallic roofing structure toppled, which led the module to fall onto a circulation area of the east building and partially damage the LED façade. The stadium structure was not compromised. This was the 38th time that this procedure had been carried out on the site and a module the same size had been installed just over a week ago in the stadium’s south sector. Teams from the fire department are currently on the location. At this moment, all efforts are being concentrated on offering complete assistance to the families of the victims.”

I'm sure you'd never heard of Odebrecht before today. I bet you have a negative view of them now. Their handling of this incident is a classic example of how poor communication delivers poor reputation. 

Damned if you do or don't .... and how a clear corporate story would help

I was at a seminar this morning about corporate storytelling. Evening Standard journalist, Anthony Hilton, suggested that PR teams often over-react to what should be seen as low-level criticism, especially online. 

His thesis was that even intelligent people can't remember yesterday's newspaper headline. Therefore reacting to every little negative is a waste of time because ultimately it will have no impact. Wait until it is clear that you have a major trending issue that will have lasting impact on your reputation before doing something about it.

I am sure he was being a little mischievous. And then I thought about Asda's little local difficulty yesterday. 

Asda has withdrawn a Halloween outfit it was selling online as a "mental patient fancy dress costume". This followed public criticism on Twitter and from charities working in the mental health field.

Asda did it well enough, offering "sincere apologies for the offence it has caused" (not some mealy-mouthed "sorry if anybody has been offended") and making a "very sizeable donation" to mental health charity Mind.

Storm in a teacup; quickly nipped in the bud; good issues management. Its PR team is right to believe that if it let all these 'minor' issues go unchallenged as Anthony Hilton suggests, then the public would begin to define for themselves what kind of company is Asda. And that might be far removed from Asda's sense of itself.

But Asda's approach to the costume issue also raised hackles with their audiences. Tweets asked why Asda was "pandering to the professionally offended"; individuals suffering mental health issues said they were not in the least offended by the costume; others suggested that "it wasn't the fancy dress costume that caused offence. It's the crass description... What was wrong with #Zombie?"

Asda has a very clear marketing story - Asda saves you money. But I'm less clear as to Asda's 'corporate story'.

If hypothetically I understood that Asda has a deep and abiding sense of social purpose over-riding its commercial interest, I could easily surmise and understand why it will always "pander to the professionally offended". I'm not going to bother negatively tweeting my upset at their response to the costume issue.

So maybe Asda could look to identify and articulate a clear, concise, consistent and compelling corporate story about itself. Then maybe Anthony Hilton would be right and Asda would not need to engage in so much time-consuming tactical PR.


Andrew Caesar-Gordon

South African Police Chief In Radio Ramble

Click here for a great example from South Africa of how not to do a radio interview.

The head of the South African Police Service (SAPS), national police commissioner General Riah Phiyega, has just completed her first year in office. A political appointment – Phiyega has never been a police officer – she has had to deal with a succession of crises.

These have included the Police shooting dead 34 protestors at the Marikana mine; the news that the detective leading the investigation into Oscar Pistorius himself faces seven charges of attempted murder; and revelations that around 1,500 police officers have been hiding criminal records. And this week, as the SABC put it, “yet another embarrassment in a long line of foul-ups”.

On Saturday 31st August, Commissioner Phiyega gave a media briefing. It was an opportunity to reset the SAPS narrative and announce a string of senior appointments to take forward the fight against crime. Instead, the headlines were dominated by the blunder surrounding the appointment of Mondli Zuma as the new police commissioner for Gauteng province (which encompasses Johannesburg). Hours after appointing him, she was forced to remove him when it was revealed that he was facing criminal charges of drunken driving.

In a statement, the SAPS stated that Zuma had failed to comply with a recently issued directive for police officers to declare if there were any pending criminal investigations against them. Phiyega said “I became aware of the court charges against Major General Zuma just after the media briefing today. I immediately met with him to establish the facts … I have therefore taken a firm decision to permanently withdraw his appointment … I am sad and disappointed in [him]”; he will face disciplinary action.

So what did Phiyega do wrong in her Radio 702 interview?

First of all, she had not considered the audience and secondly she failed to control the interview and exploit it for her own purposes. She was defensive in tone and on the back foot throughout. It could have been so different.

To close down this issue, she needed to side with her audience who wanted to hear an apology or admission that there had been a cock-up. It doesn’t have to appear weak to admit this if it is combined with communicating strong actions (e.g. “we have taken steps to ensure that it will not happen again and we have definitely pro-actively checked out his successor”).

With that out of the way, she could then have simply made it clear that Zuma was fired as soon as she became aware that he had omitted to tell the truth and then used it as a hook to communicate positive messages and begin to reset the SAPS narrative.

Instead, to the opening question “Are you embarrassed?”, after a long pause that made her appear uncertain or calculating, she said ‘no we are not embarrassed’ (tip: don’t repeat negative or pejorative words in an interviewer’s question - it’s a gift to the headline writers as it was in this case). She then rambled on about procedures in a manner that was neither convincing nor concise. Incredulous, the interviewer came back with the same question and when ignored (don’t ignore questions – it makes you look evasive; address them and move on to your positive messages) he then peppered the rest of the interview with negative questions.

Her arguing that Zuma is innocent until proven guilty of the criminal charges (which had previously been reported in the media and was just a Google search away) was not helpful. Her best defence was to stick to simple answers and use the same language as the audience – perhaps “Zuma lied and that’s why he was fired. I brought in this regulation because I want to ensure that the police officers fighting crime can be trusted by the people. He can’t be and he has gone. Now let me tell you how his replacement will be taking the fight against crime to the criminals ...” 

Andrew Caesar-Gordon

Example From Sky News As To Why You Should Train Your Receptionists & Security Guards To Handle The Media

Watching the extraordinarily cack-handed response of Ask.FM to the suicide of Hannah Smith following her being cyber-bullied on their website, have a look at this video clip from Sky News doorstepping an employee of Ask.FM here.

When covering your organisation's issue or crisis, journalists will try to speak with senior executives. If your organisation has pulled down the shutters on its communication - rarely a winning strategy - the media may well try to get a quote from any employee no matter how junior.

Receptionists, security guards and junior staff can unwittingly fuel your crisis by offering up information they should not. They may find it difficult to resist a persistent journalist who will tag them as a 'representative of the organisation' fully aware of how unfair and unreasonable this may be (as in the above video clip where the employee being harassed is Latvian and forced to respond in English).

A receptionist or security guard valued in the workplace for their friendly and helpful manner day-to-day can be just as chatty with a journalist, unwittingly providing background detail and flavour for the story. Equally, the member of staff who stonewalls and comes across as uncooperative or defensive can irritate journalists and make the organisation look unsympathetic.

So crisis media training or at least 'media awareness' for such staff should form part of your planning and preparation for crisis and issues management. Our most progressive clients get this and ask us to do so.

And key advice to such staff? Follow two rules:

• Act professionally – be calm, polite and helpful, offering to bring the journalist's questions to the attention of the Communications department 
• Avoid speculation – make clear that you are not qualified to respond on the company's behalf - a little humour can help here (e.g. "you will understand that such things are way above my paygrade but I will let the Communications department know you are here" or "as the saying goes, I just work here, but I will let the Communications department know you are here") - and stick to the media brief you have hopefully been given by the PR team.

Andrew Caesar-Gordon

A Canadian Blame Game

You would have thought that with over 50 people dead following a runaway train destroying the heart of Lac-Megantic in Canada, the rail company would be focused solely on the human impact of the tragedy. 

Not so if you are Edward Burkhardt, chairman of Montreal, Maine and Atlantic Railway.

Generally, his media interviews have been terrible:

See here

And here

And he has sparked an extraordinarily dangerous “blame game” between himself, an employee engineer and the emergency services. Burkhardt first suggested that the fire brigade had caused the disaster by causing the brakes to fail when they had been called earlier in the day to extinguish a fire on board the train. He then singled out an employee as culpable, questioning whether he had properly set enough hand brakes, suspending him without pay and declaring that ‘in my personal opinion’ the employee would not work for the company again.

We saw the same with the Costa Concordia accident when the cruise company rushed to blame the ship’s captain.  This is always a risky crisis management strategy.

It creates the impression of a business willing to jump to conclusions before all the facts are known, rather than keeping a cool head. It implies a separation between company and employee which could be perceived as artificial and infers that the business’s top priority is protecting its own commercial interests and will use any means to do this, rather than focusing all attention on the human impact at this early stage. This compounds the public anger that Burkhardt did not visit the scene of the disaster for two days because he said he had to “communicate with insurers and various officials” in Chicago.

It’s worth revisiting an example of how to handle a rail tragedy: Richard Branson’s handling of the derailment of a Virgin Pendolino Train atGrayrigg, Cumbria. 

His approach is different from Burkhardt’s in nearly every respect. Firstly Branson cut short his holiday to immediately attend the site. In crisis, you must be seen to exercise ‘grip’. Burkhardt’s remaining in Chicago for two days created another unnecessary media issue in the heat of the crisis. Quebec Premier, Pauline Marois, described his attitude as “unacceptable” and “deplorable”, telling a news conference: “the leader of this company should have been there from the beginning."

Another important lesson is that it is risky giving a press conference with the wreckage of your company in the background (try to find more neutral locations!) Branson was able to do so because he had already been assured that a points failure was to blame. Burkhardt however gave his press conference from the chaos of the scene, with emergency services vehicles and cordons in plain sight and in the middle of a residential street, which only drew attention to the fact that his crisis had affected the whole community. 

Be human – it is what audiences and journalists want. Branson is clearly emotionally affected by the tragedy and his hesitant speaking style (which is not unusual for him even in non-crisis situations) reinforces this. The audience can see that he cares about ‘people’ here and he later dismisses the blame/ sue question, turning it to talking about people and safety. 

And what if investigations conclude that the engineer was not to blame?  In this situation, Burkhardt’s early assertion would be hugely damaging to reputation.

Andrew Caesar-Gordon

Charity Dissembling

He should really have known better. I've just heard a gob-smacking interview that former BBC Editor, Jack Lundie, now Director of Communications at Save the Children gave to the BBC's More Or Less statistics programme a couple of weeks ago on behalf of the 'Enough Food For Everyone IF' campaign.

The programme had dissected the IF campaign's strapline that a child dies of hunger every 15 seconds and found it wanting. The interviewer put to Lundie that this implied incorrectly that the children are dying from starvation.

His PR jargon about "top-line messaging" was compounded by an admission that they effectively dissembling to seek emotional support from the public. He ends up agreeing that the message has become too simplified and people are not correctly informed. Inter alia, that in order to get 'cut-through', you need to manipulate people because they're busy.


This is exactly the kind of response that does charity campaigning no good in the short term as audiences realise they are being manipulated by statistical sleights of hand. In the longer term, it tars all charities with the kind of spin they associate with politicians. 

Listen here to the interview (scroll forwards to 6 minutes 13 seconds) .


Andrew Caesar-Gordon

A tale of two leisure industry accidents

This weekend saw two little leisure industry problems. Who handled their communications best? The  little, local, leisure company or the one that is part of the Merlin Entertainments behemoth?

On Saturday 15th June, "Yellow Duckmarine" saw one of their WW2-era amphibious tourist vehicles sink in the Albert Dock - the second such incident this year - with around 30 passengers on board. No-one was injured but lots of media coverage. The press does like a good sinking.

On Sunday 16th June, 39 people (25 of whom were children) were stranded 20 feet in the air on a Chessington World of Adventures theme park ride for three hours after a technical fault caused an automatic fail-safe system to bring the ride to a controlled stop. No-one was injured but lots of media coverage and Sky News was there with a 'Ride Terror' headline.

The owners of the Yellow Duckmarine, Pearlwide Ltd, posted a statement on the home page of the attraction's website. If they scrolled down, anyone thinking of booking a (land-only!) ride would have read the following:

"Following the incident involving Quacker 1, we are working closely with our regulatory body, The Maritime & Coastguard Agency (MCA) and Merseyside Police. The craft involved in the incident holds a valid passenger carrying certificate.The craft has now been recovered and following consultation with MCA it has been taken to a place of safe and secure storage in-order-that a full investigation can take place. That will continue tomorrow morning. Our team followed their emergency response procedure, ensuring the safe disembarkation of passengers on board. We were aided in this regard by a number of canal boat owners berthed in Salthouse Dock to whom we would like to express our thanks. We would also like to express our thanks to the emergency services and the Albert Dock Security team onsite for their immediate and exemplary response. We will continue to provide full cooperation with MCA and Merseyside Police. We are pleased that all of the passengers who were taken to hospital as a precaution, have now been released."

Chessington issued a statement confirming that there were no injuries and apologised to those affected:

"At 4.06pm the Rameses Revenge at Chessington World of Adventures Resort in Surrey experienced a technical problem. This resulted in the automatic fail-safe system bringing the ride to a controlled stop. Experienced resort staff were on site immediately to assist with guest care. No guests were injured in the incident. A small number of people were on the ride at the time and the resort's engineers worked with the emergency services implementing well-rehearsed procedures to ensure their comfort and safe removal from the ride. We are very sorry for any discomfort our guests experienced during the delay."

Compare and contrast. Yellow Duckmarine's statement was defensive (we have a certificate!) and the recovery of the craft was deemed a more important fact to note than the welfare of the passengers who get no apology but are I am sure delighted that the company is so pleased they have been released from hospital. Do they have PR support? A crisis plan? You would hope so given the nature of the service but I doubt it on this performance.

Fair play to the Yellow Duckmarine - they have been swift and transparent. But their tone and focus has been wrong and given this is the second sinking they have suffered, they can anticipate some business consequences arising from the 'multi-agency' investigations that have been launched and reputation loss among customers who clearly aren't highly valued.

Merlin's statement on the other hand is all soothing and professional (an 'automatic fail-safe' that did its job, 'well rehearsed procedures', 'safe removal' of guests from the ride) although there was some spin in there that would make Malcolm Tucker blush (apologising for guest discomfort during "the delay" - that is the three hours they spent stranded aloft!).

And that seems to have been the limit of their PR around the issue. For Chessington/ Merlin, it's a calm "business as usual", 'taking it in our stride' approach from this trusted brand. This trust gives them the benefit of the doubt and - given that there were no injuries - permission to choose not to highlight the issue or actions taken on either of their websites or twitter feed. Chessington may not have tweeted about the incident but it should surely have responded to a customer who had a child trapped on the ride - see below. Note that a journalist from BBC Surrey found her though and sought to contact her for a quote:

Andrew Caesar-Gordon

What A Journalist Thinks When You Haven't Prepared For The Tough Questions

With interest in and scrutiny of business at an all time high, today’s CEOs must also assume the role of CCO – chief communication officers.  With the value of trust at a premium, corporate reputation management should now be high on the agenda for all business leaders.

This means that the most successful CEOs will be accomplished communicators – not masters of spin, but authentic, passionate leaders with the ability to communicate their messages effectively.  These skills are required in the good times to drive growth and, even more crucially, when engaged in crisis management.

Effective communication cannot be achieved by deciding what you want to say and ignoring the legitimate questions and concerns of your stakeholders.  That’s why I was so interested to read the following Twitter exchange from Simon Neville, one of the Guardian’s business reporters, following an interview with Marks and Spencer CEO Marc Bolland (read from the bottom up):

When preparing for an interview, my advice is to face your fears and contemplate the five toughest, most unpleasant questions possible and work out your best answers to each of them.  Doing so means you will approach the interview with confidence knowing that in a worst case scenario, you have the ability to handle whatever the journalist may throw at you.

If you’ve done your media training you will also understand that you can’t control a reporter’s questions, only your response to them.  Don’t allow yourself to be riled: an emotional spokesman can lose control of an interview.

Finally, remember to begin your  interview planning by considering the perspective of the people reading the newspaper article: it’s not enough to consider what you want to say – you must double-check that your proposed messages resonate with the ultimate audience. It’s only by adopting this approach that CEOs will win the trust of their stakeholders and fulfill their potential as CCOs.

Jonathan Hemus

The Fallacy that only 7% of communication is about the words ....

Many people have been led to believe that only 7% of the impact of communication is about the words/ content and that 93% is about tone of voice and facial expression. essentially that performance trumps content.

This is nonsense and a fundamental misunderstanding of Albert Mehrabian's research in the 1960s. Much to Mehrabian's annoyance.If I want to explain to you how to find the pen I have hidden in a drawer upstairs, having a tone of voice or facial expression isn't going to help you. It's the words!

Listen here to one of our trainers, Scott Chisholm, explain how to utilise Mahrabian's findings properly in your media and personal communication:

Welcome To South African PROs

We are the UK's largest media training company and have opened an office in Johannesburg, South Africa.

Building on our work with clients ranging from Anglo American to Absa Bank to Eskom, we have expanded our team of Johannesburg and Cape Town based journalists to work with a wider range of South African and international businesses.

Successful organisations don't take risks with their reputation. So whether you want media and crisis training to better manage corporate reputation within South Africa, or you are a business growing beyond South Africa, our team of local and international journalists are on hand with the same methodology that has led us to work with 40 of the UK's FSE100 companies and global brands such as Disney, Sony and Hilton Hotels.

Our local website can be found at www.electricairwaves.co.za and we can be contacted on +27 (0) 11 021 2534

Poetic Licence

Interesting piece on the BBC website about Tesco's recent national advertising campaign post the breaking of the horsemeat crisis.

A promise to get to the bottom of the horsemeat issue has escalated into a promise to change Tesco's entire way of doing business, particularly about the way in which it treats farmers and other suppliers. This promise has been delivered in full page newspaper adverts that are written in such a way as to suggest they are in verse. Cue media coverage as to whether and how they are using poetry to make their case.

One commentator - and no friend of Tesco - says that by turning to blank verse, and block-booking adverts in the national media, Tesco are attempting to "change the conversation" about their company. True!

"The story then becomes about how they are responding rather than the issue itself. And that really is clever PR."

I think he's right.

Andrew Caesar-Gordon

Findus Fails Crisis Test

Electric Airwaves' Crisis & Issues Management Director, Jonathan Hemus,explained to the Huffington Post how Findus had got its response to finding 100% horsemeat in its beef lasagne so wrong. See below for extracts below the article and key learning points for PROs:

On the afternoon of Friday 8th, frozen food giant Findus reiterated its apology over some of its beef lasagne products containing horse meat, saying it was "sorry that we have let people down".

Findus also confirmed it carried out a full product recall on Monday, two days before DNA tests confirmed that some of its products contained up to 100% horse meat and it alerted the Food Standards Agency, but chose to ignore claims by Labour MP Tom Watson that it sent a letter to retailers on Monday warning that a France-based supplier had told it there may be problems with raw materials delivered since 1 August 2012.

A Findus spokesman said: "At Findus UK our first priority is our customers and providing quality products they can trust. But we know that many people have been concerned by the news this week that tests have shown that some of our Findus beef lasagne has been found to contain horse meat.
"We understand those concerns; we are sorry that we have let people down."

But is saying sorry enough? Can Findus ever restore consumers' faith in its frozen food convenience foods, following this disaster?

Jonathan Hemus, said:

"Findus does have a statement about the situation at the bottom of its homepage and on its contact us page, but it looks as though it has been hastily put there without any thought as to its design or positioning, and it lacks a heading of any kind."

"Findus's homepage also proudly proclaims that it uses 'only the best ingredients' and another page exclaims 'you can trust us' alongside a picture of a 'beef' lasagne. On a normal day, these messages are fine. Today, they look hollow, unprofessional, or even bad taste jokes."

Hemus also criticised the firm's use (or lack of) social media - Findus' twitter profile hasn't been used for more than two years. There's also a link to Facebook, but that does not lead to a Findus page either.



Findus's twitter profile as of 8 February, 2013
Findus also reportedly failed to find a spokesman to speak on Radio 4, meaning an opinion-forming programme discussed the situation without the company having any opportunity to shape that discussion.

"If you manage a food company, one day your products will be contaminated. If you run an airline, one day, one of your planes will crash. If you make cars, one day there will be a safety recall. And all of these situations are recoverable. But only if you engage in crisis management planning and training beforehand."

Another option is to throw a lot of money at the situation. In 2006, Cadbury's admitted one of its plants had been contaminated with salmonella. A report commissioned by the government's Food Standards Agency found that Cadbury was using an out-of-date approach to risk assessment and product testing for salmonella contamination. It took six months for Cadbury's to come clean about the contamination. It then spent £10 million recalling the faulty goods, but another £10m was spent on advertising costs for a major new campaign and "manufacturing improvements".

Hemus told the Huffington Post UK the juxtaposition of a wholesome, family brand like Cadbury against corporate behaviour which seemed to put business interests ahead of health, led to the largest ever ratings drop for a brand in the YouGov Brand Index.

"When confronted by a product recall crisis, brands and business must act quickly – over-act if necessary - to reassure customers that they are safe and that the company cares." They should also communicate pro-actively, provide a media spokesperson, post information to the company website, tweet frequently and offer a telephone hotline.

Lawyers may advise executives never to use the word 'sorry', but it resonates with the general public, so brands should consider it. And ultimately, the brand should behave consistently with its values.

"If you position yourself as a caring, wholesome brand, you'd better live these values in the crisis. Act contrary to them and the damage can be huge," Hemus concluded.

We live in Financial Times - but online

And if you want to know how the Editor of The Financial Times sees the future of his newspaper, you can read if here on the 125th anniversary of the first issue. You can read the article here.

Findus and horsemeat: how social media keeps a story on the boil

Here's a nice Little piece by Charles Arthur, the Guardian's Technology Editor. Sympathetic to the struggle of PROs to contain the spread of stories on social media - whether they incorrect or in need of a balancing response - he concludes that the battle for reputation requires constant action. You can read the article here

Getting Your Crisis Statement Right - Even For Online Crises

Here's a nice storm in a crisis teacup underlining the importance of organisations having a clear social media policy AND clarity in your crisis media statements.

Last week, the pastor of an American church in St. Louis went with her congregation to a restaurant, part of a chain, called Applebee's. The receipt for the meal added an 18% tip which is restaurant policy for parties of eight or more. While the 18% tip was paid by the party, the Pastor, Alois Bell, crossed out the 18%, scribbled: “I give God 10% why do you get 18?”, and left no tip herself (although subsequently claimed to have left $6 cash on the table).

An employee at the Applebee's restaurant took a picture of the receipt and posted it to Reddit where it went viral.


The image shown above has been cropped but the original picture posted to Reddit showed the pastor's signature. The woman who shared the picture (and was not the same person who served Bell and her party) was fired by the franchisee running that branch of Applebee's and a routine press rlease issued:

"Our Guests’ personal information – including their meal check – is private, and neither Applebee’s nor its franchisees have a right to share this information publicly. We value our Guests’ trust above all else. Our franchisee has apologized to the Guest and has taken disciplinary action with the Team Member for violating their Guest’s right to privacy. This individual is no longer employed by the franchisee."

Cue social media outrage that the employee had been fired when the guest's behaviour was widely considered to be rude which was then picked up by traditional media (e.g. ABC News). As the criticism mounted, the former employee claimed that she didn't break any specific guidelines in the company handbook and that Applebee's would rather lose a dedicated employee than lose an angry customer.

Only then did Applebee's President, Mike Archer, issue a (well written) statement sharing a portion of the company's social media policy, which expressly forbids employees from breaching customer privacy without permission from an executive. He added: "I recognize that you may still disagree with the decision, but I hope this may have provided some additional insight".

If the specific guidance from the privacy and social media policy had been shared at the start of the issue and the first statement had maybe used a few more personal pronouns ("you, our guest's privacy"), I suspect that this would have been nipped in the bud. But in treating the issue as a 'business as usual' type incident rather than thinking through the negatives and forestalling them, Applebee's has had to waste time and resources all weekend fighting an unnecessary PR fire.

 

Andrew Caesar-Gordon

Does Goldman Sachs need care about its public reputation since profits are up?

On the back of my Goldman Sachs article today in PR Week (a fortnightly look at how corporate messages have played out in the media http://www.electricairwaves.com/messageinthemedia.html) I've been asked whether Goldman Sachs really need care about its public reputation if its year-on-year third quarter profits are up 53%.

The answer lies in the fact that Goldman Sachs, like all organisations, has multiple reputations with multiple audiences. So while their public reputation may be trash, charities may value its donations, a CFO may value their investment banking skills most or a CEO may have a personal relationship with a Goldmans executive "who's not like the rest of them". Which is fine. Hence profits rise. BUT.

Multiple reputations can, do and probably will become increasingly interdependent. And it ignores the human factor. As I reported at the end of the article, a FTSE100 CFO who considered them a good investment bank nonetheless took a personal decision not to be associated with them because of their poor public reputation. It could well be that Goldman Sachs profits would have been 73% higher if it was not for their poor public reputation. We don't know at this point.

The bank may well have been obtuse in failing to understand its external operating environment - that bankers are not liked, that foreign companies are being bashed over the amount of tax they pay in the UK etc - but it did back down over the timing of the bonuses.

Stakeholders that the bank does care about - the Governor of the Bank of England, the Treasury - criticized them. And probably in response to the media stories which then caused Parliamentarians to ask questions.

Moreover, Goldman Sachs peoples' time and other resources were expended dealing with the issue. Time spent on issues management (especially avoidable issues) is time that can alternatively be spent on more productive things. And all the while, competitors - maybe new one - will be nibbling away at their business: "we're not like them", "we're the acceptable face of investment banking" etc.

It's a connected, interdependent world we live in. That's what Goldmans needs to come to grips with.


Andre Caesar-Gordon

Top Tip From Coverage Of Today's Vauxhall Helicopter Crash

Today’s tragic helicopter accident in Vauxhall, London, also offers PROs a quick learning point in managing a crisis situation.

Your crisis will cause the media and many members of the public to head to your website as a central source of information.  You must be ready to adapt your website (and other online channels) for use as a central hub for communication. A gallery of ‘positive’ images including shots of happy, smiling staff or customers may well jar with people and feel inappropriate at the time of crisis.  The creation of a ‘dark site’ prior to a crisis hitting, allows immediate activation and the ability to position the business as an organisation in control of a challenging situation

Rotormotion – who operated the helicopter – is a small company and will understandably not have invested in a ‘dark site’. But you can’t have an incident (in bad weather) that is core to your business in this instance – flying safely - and then keep on your home page:

“Safety is no accident. Our helicopters have twin turbine engines and are certified to fly at night, over water and in cloud. Relax in the knowledge that both pilot and machine are fully instrument qualified to fly in poor weather conditions.” 

Whether you are a large or small organisation, check and change your website to remove anything incongruous with the crisis situation. Show the outside world that you care more about people than profit at this time. If you can't adapt the home page, at the very least prominently post your response to the crisis and any key messages that you want the audience to understand about you and your business.

Moreover, while the company’s managing director was right to say "Our main priority now is for the family of the pilot and we extend our greatest sympathy to the friends and relatives of those who have died and been injured", he needed to add that the company was taking steps to ensure that none of its own processes were at fault, that it cannot speculate until the investigation was completed and that processes would be rectified should an investigation find any shortcomings.

17th January -  UPDATE

Seems as though RotorMotion read our blog last night and have changed their website. The front page - indeed their website's only page - is their press release which says all the right things. Bravo.

 

Andrew Caesar-Gordon

See You In Court

"Never trust the British", tweeted American journalist, Kevin Roose, following the war of words and legal threats that has erupted battle between two of the biggest figures in the technology world.

Meg Whitman, American former boss of eBay and now CEO of computer hardware giant, Hewlett Packard (HP), whose share price has halved this year as it struggles to respond to smartphones and tablets.

Mike Lynch, founder and former CEO of acclaimed British software company, Autonomy plc, who stands accused of "a wilful effort" to cook the books to facilitate its $11bn sale last year to HP.

PwC has been called in to investigate; the matter has been referred to UK and US regulatory authorities. So who's message is winning out in the media?

That might depend on whether you are following the American or British media. In the UK, the BBC, FT, Sunday Times and even The Guardian have sympathised with Lynch who flatly denied the allegations. They observe that this year, HP has written down $19bn of the $26bn it has spent buying EDS, Palm, Compaq and Autonomy; fraud couldn't account for writing down Autonomy by $8.8bn; or such a huge figure remain undetected during an exhaustive due diligence process by bankers and auditors before the sale.

American media pointed out that analysts and Oracle's boss, Larry Ellison, had questioned Autonomy's accounting practices and honesty in the past. The Wall Street Journal committed a front page to detailing some of Autonomy's alleged scams. The New York Times highlighted how Lynch worked his engineers "remorselessly hard" and "wouldn't work with anyone" at HP.

Lynch released to the press a letter he wrote to HP's board demanding "immediate explanations" for its "highly damaging allegations" and challenged it to detail them. HP rebuffed him, stating that it looked forward to hearing Lynch "answer questions under penalty of perjury" in court. Ouch.

Why have both sides indulged in such a public PR battle? For Whitman, under investor pressure, she gets to blame her predecessor, take credit for confronting an issue head-on and create time for a new strategy as the investigations and any legal processes drag on.

Lynch, instead of hiding behind lawyers, has muddied the waters and established a narrative about HP while the allegations are so sketchy. With HP's shares at a decade low, a history of overvauing its acquisitions, a succession of failed strategies and a new CEO who praised her predecessor's Autonomy deal, it is easy to argue that HP is the author of its own misfortune and attempting to distract attention from it.

If Whitman is right, Lynch's reputation is toast and he's in jail. If she cannot prove a huge, deliberate fraud, she is out of a job. No wonder it's got so dirty so quick.

Andrew Caesar-Gordon