PR and Reputation

ISSUES, CRISES AND REPUTATION
Friday, 7 January 2011

Itʼs about ...
Issue identification Hostile acts
Issue evolution Business continuity
Business continuity Role of media
Crisis planning and Lobby groups & activists
management Ethics and CSR
Crisis communication Impact of new technology
Planning

... and REPUTATION

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?

noun
an important topic or problem for debate or discussion

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

What’s a crisis?

noun ( pl. -ses )
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

Harrison 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.

Differences
Issue:
• Starts as a factor
• Mid to long-term
Crisis:
• Event
• Happens quickly
• 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.

#

#

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

An emergency or event that is unforeseen or seen as
Long-standing, slowly developing, or predictable,
only a remote possibility, that impacts on a single
that impacts on an industry or product category
organisation

Something that can be identified, monitored and Short-lived (although a crisis such as product
managed as it emerges tampering or extortion can last for several weeks)

Brought into the public arena (or at least fuelled) by Attracts significant - and sometimes hostile - media
protagonists or activists and reported on by media attention. In extreme cases, the crisis can be
‘championed’ by media

Summary of the differences between issues and crises

Examples

ISSUES CRISES
Accidents that kill, maim or injure people
Impact of new technologies e.g. genetically
e.g. industrial accidents, fire, explosions,
modified foods, stem cell research
plane/train crashes, food poisoning

Alleged side-effects of products e.g. food Environmental concerns e.g. discharge of
products that cause obesity or IT products waste, not meeting environmental
that emit radiation standards, OH&S practices leading to injury
or death
Industry-wide corporate practices e.g.
Organisational-specific corporate
director or management corporate
malpractice e.g. fraud, embezzlement, anti
remuneration
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)

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.

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

West Australian 23 Feb 2008


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, watch
Press TV
• The Australian, • ABC 7pm news
• The West • 7.30 Report
Australian
• Stateline
Radio
• Insiders
• Talkback, 6PR, Web
ABC 720
• 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


$6b FREMANTLE
DEVELOPMENT
• Reclaim seabed
• Six islands
• 345 hectares


Phases

HOT
Critical
EMERGING
FALLOUT
Public
LATENT Dormant
Potential
“Pre”
Potential Imminent Current Critical Oops, missed that one!

1. How issues develop and progress (Baskin and Aronoff)

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

Emerging
An 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.

Hot
A full-blown issue in current debate

Fallout
An 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!

Honesty 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

As 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

OUTCOMES
# •# 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 fines
Other 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

Anticipating 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” scanning
Media
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 personal
space 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

More 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

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