Asian Counsel

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An update on media relations: a crisis plan

By Richard S. Levick, Levick Strategic Communications

Recently, a public official in the U.S. who was spearheading the investigation of a public company proclaimed that the company’s executives were stonewalling him. He would not, in fact, deal with those executives anymore, period Bui the investigation would go on.

The company eventually fired three key executives. Unfortunately, when you stonewall a public official, you stonewall the public, and that includes investors. The company’s shares dropped precipitously und the subsequent layoffs were massive.

The mishandling of this public official precisely mirrors how many companies sabotage their relationships with the media. They wind up ‘not dealing with the media’, but the stories in the press get written anyway.

If the stories also happen to have a cross-cultural or international dimension, the risks of media mismanagement exponentially increase. It’s no longer a convoluted auditing tale or an environmental story rife with technical detail.

Maybe it’s about a business decision by a Japanese company that results in she loss of American jobs. Maybe it’s about Chinese executives who don’t understand U.S. or European policies on how employees ought to be treated.

It’s simple stuff. Because everyone can understand the story, everyone can react. If it’s a retail business, fewer women and minorities shop there. In the U.S., the exposure is equally great on Main Street and on Wall Street, where the shareholders and analysts hover.

A fundamental step

Whether it’s the SEC or the EEOC, the New York Times or the New York Post, stonewalling is the opposite of planning. A crisis plan embraces, first, the legal and strategic element – the substantive response to the crisis for a court of law or for industry analysts. But it also embraces the public response: what you say to the world, in large part via the media, as well as who says it.

Never before have lawyers needed to play as direct n role on the media side of such crisis planning and crisis team deployment as they do today. Of course, many lawyers have a natural antipathy to media. Lawyers bank on control in their professional lives and they dread media involvement as a crapshoot.

But it’s an antipathy that lawyers have to get over, and for one fundamental reason: the closer you get to what lawyers actually do – litigation – the worse it gets for their clients in the media. It is during litigation that their clients’ reputations are most directly and, it would seem, inexorably threatened.

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Figure 1, based on research conducted by CARMA International for our firm, paints a stunning picture of media coverage of one major industry, the automotive industry. In light of the aggressive, and often salutary, efforts of that industry to implement minority-friendly hiring and promotion policies, such data lakes on increased importance. It is a health check, an index of how effectively the automakers are continuing to communicate with an audience that it has clearly identified as a crucial component of total market share.

The data shows consistently positive media coverage in every area except legal and legislative. Legal garnered consistently and, at some points, dismally negative media ratings. That being the case, additionally strenuous efforts by this industry to plan for and enhance related media coverage would now seem a necessary step if these manufacturing giants are to protect the gains they’ve made among minority customers.

CARMA has conducted research for other industries and found nearly identical results for commercial and financial institutions as well as for the energy industry. Research conducted across multiple industries and broken down by subject is equally decisive. As Figure 2 (see over) shows, litigation is by far the fly in the reputational ointment.

Of course, litigation is naturally more negative than the other categories as it’s fraught with charge and counter-charge. But lawyers and their clients make a grave mistake if they conclude that it has to be this bad. Any number of applied communications skills would narrow the gap between litigation and the less contentious areas charted above.

The one factor that most persistently undermines corporate success with the media during litigation is that, as defendants. They start managing the media too late when reporters have already decided to do a story. By that time, the reporters have already made up their minds about who the villains, victims, and heroes are. In fact, corporate defendants – even in controversial industries – can become the heroes of their own lawsuits and, in so doing, dramatically improve the kind of data reported in these charts.

What’s needed is a plan.

Essential elements

There are two imperatives to make a crisis plan worthwhile.

First, the crisis plan must precede the crisis itself. Try devising a coherent strategy just when a crisis threatening the corporate reputation first occurs. Try figuring out how to implement that strategy after a reporter has already left a message that he or she is filing a story that could torpedo investor confidence.

You might luck out and hit on an effective response or at least a stopgap. But, chances are, confusion and paralysis will ensue. You and your colleagues on the legal end may advise one course of action utterly at odds with equally thoughtful advice from the corporate communications team.

After all, your instincts are antipodal. Lawyers tend toward caution, toward guarding information. Media professionals tend to disclose via ‘message points’, succinctly conveying the corporate position on all related issues. Both instincts have their place and some balance of the two is usually mission-critical. Only by creating crisis plans and staffing crisis teams before a crisis occurs can these opposing sensibilities he made to work in synch.

Second, the crisis plan must compel ongoing proactive initiatives – not just provide a document that gets written, forgotten about, and pulled off the shelf when the crisis actually happens.

Among other vital content, the plan should include generic message points to be refined once the specifics of a crisis are known. These three to four brief points unclear, concise statements of the company’s position and. hopefully, innocence. They will usually enumerate concrete steps that are being taken to protect consumers, stockholders, and employees.

For some industries, specific message point content con be anticipated wed ahead of time. Chemical companies, for example, will want to refine responsibility statements that may be quickly tailored as a response to any specific allegation of pollution.

All companies should prepare for discrimination issues, even companies aggressively committed to equal opportunity and diversity. It may be true that Texaco could not have, anticipated the race discrimination allegations that rocked that corporation in the 1990s. At the same time, any large corporation can have at least skeletal message points affirming its commitment to fair hiring and promotion practices. Even bare-bone messages expedite the crisis team’s work once a crisis occurs.

Better than that, however, the crisis plan would go beyond skeletal points by specifically showing how the company has been ‘aggressively committed’. Is there a diversity programme – so important for corporations with offices in the U.S. – already in place? The plan should include as many of its specifics as possible.

An important benefit of crisis planning is that – even if the crisis plan is never needed – it forces ongoing review of just such diversity programs or other good citizenship initiatives. For example, a crisis plan may include boilerplate language about the company’s minority hiring record. As the crisis plan is reviewed, so too is that hiring data. If the numbers have dipped below desirable levels, it’s a cue for corporate action irrespective of any criticism or questions from external sources.

Interestingly, Wal-Mart is now responding to its gender-related litigation by telling the world that the company has put a ‘fresh’ diversity programme in place, along with other changes to ensure greater fairness. To its credit, the company is also saying that it is ‘eager to listen to its critics and will make changes when necessary’. (The Associated Press, January 14, 2005).

Wal-Mart’s response is sound, but how much better for the company if, as a result of prior planning, it could now point to a longstanding diversity programme that confirms a formal company-wide commitment dating back years?

Decisive details

While liming and content are the essentials, for effective crisis planning the devil is also in the proverbial details.

Among other tasks, the plan must designate the crisis team leader and team members; identify individuals responsible for handling press enquiries, press releases. FAQs, etc; locate a ‘command corner’ – often a particular office in a particular city – with alternatives in the event of power lines being down; and lay out procedures to set up a hotline for enquiries from concerned parties.

To every extent possible, the crisis plan should name possible supportive third-party sources for public comment. Some companies have drawn most effectively on prominent women and minorities to speak on behalf of the company. Board members are useful here. So too are activists or civil rights leaders who have criticised other companies in the past, but are now willing to defend this company’s policies in good conscience.

The plan must include immediate administrative action points us well. For example:

• Tracking news and other public information that may have impact in the near future.
• Compiling reporter lists and developing relationships now. By gelling to know the key reporters, the company achieves a reservoir of goodwill to draw on later, when journalists are writing sensitive stories and their judgment calls can go one way or another.
• Scheduling media-training for corporate spokespersons – to refine, personalise, and most effectively deliver these ‘calking points’ – before they confront situations where they desperately need those skills. This training is typically replete with role-playing and videotaped mock interviews.
• If a crisis plan is only sitting on the shelf – if the company is not pursuing myriad media-related activities during the months and years before the enquiry began – it will likely be pretty useless when push finally came to shove. Crises need to be planned for. Plans need to be tested.

The lawyer’s larger role

As we’ve discussed, it is essential that the legal counsel be included as one of the key skill sets on any crisis team. Their role, to help implement the crisis plan ahead of time, should go beyond just reviewing an official document. There is, in fact, a much larger prophylactic dimension that lawyers can bring to bear in vitalising the crisis plan.

We’ve seen how the closer you get to the legal end of things – especially to litigation – the worse it gets for the client in the media. Yet lawyers, more than many other professionals, know the marketplace shoals, the socio-political danger zones, and the potential for litigation chat exists simply because a company happens to be in the wrong place at the wrong time. They can support the media strategy by monitoring early warning signs and prompting their clients to action as soon in the game as possible.