3.1 Crisis Management
Crisis management is the art of putting the right spin
on disasters (or at least bad news). The term was coined by Ivy Lee
in the early 20th Century[41]. It could mean something as simple as
making sure that customers know when business as usual will resume
following a disruption in company operations, or as sensitive as handling
media coverage of an oil spill or environmental protests involving
the company.
Now more than ever companies profits are tied to their
reputation and when disaster strikes the way a company handles it
can make a huge difference to their image. In the late 1980s and early
90s all of the major PR companies began to offer crisis management
services. "The days of regarding an industrial accident that
kills only one person as a minor incident to be swept under the carpet
are gone," according to crisis consultant Michael Bland[42].
Faced with a PR crisis, a company can call in crisis
management specialists to handle media, government and public communicators.
At least one commercial insurance company will offer discounts to
its customers if they both have a crisis management plan on paper
and also demonstrate its feasibility through at least annual, evaluated
crisis simulations.[43]
3.2 Issues Management
The world of PR is full of pretty sounding vagaries
and obfuscations. Issues management, whilst a popular buzzword within
the industry listed as a service on the web sites of virtually all
the big PR companies, is one of the more vague terms.
Burson-Marsteller promote their Issues Management service
thus "Operating at the intersection where business concerns often
collide with public policy issues, we help clients navigate difficult
challenges that—if left unchecked—could undermine growth,
reduce market share or damage an institution's reputation… we
have senior professionals who are experts in influencing debates surrounding
contentious legislative and regulatory issues…Our approach to
issues management… mirrors that of a political campaign."[44]
As an example of Issues Management, B-M's web site offers
a case study of its work for American Airlines in response to an anti-trust
suit brought against them by the US Department of Justice in May 1999.
The DoJ was accusing the airline of unfair pricing designed to drive
smaller rivals out of the Dallas-Fort Worth hub. B-M was hired to
run a campaign influencing "perceptions about the strength of
the government's case, the underlying facts, and the dynamics of the
overall industry" in order to change opinions in the political
and legal spheres, hopefully increasing the probability of a successful
outcome in court, as well as mitigating damage to the company's reputation
with customers shareholders and the wider public[45]
The Issues Management Council defines issues management
very differently: "the process used to align organizational activities
and stakeholder expectations"[46]. This process is "a formal
management process to anticipate and take appropriate action on emerging
trends, concerns, or issues likely to affect an organization and its
stakeholders" and a "genuine and ethical long-term commitment
by the organization to a two-way, inclusive standard of corporate
responsibility toward stakeholders" but definitely not "control
of public policy issues", "spin or damage control",
or "a superficial imposition of a set of values and way of doing
business".
Issues management is often about influencing the public
perception of a broad issue over a long time scale. Monsanto's 1998
'Food, Health, Hope' advertising campaign might be described as crisis
management - a response to the extraordinary backlash against GM crops
in the UK, while the industry's current far less overtly aggressive
campaign might be characterised as long term issues management.
The impressions of a PR Watch correspondent attending
the November 1997 conference of the Issues Management Council can
be found on the PR Watch web site.
3.3 Branding and Marketing
Marketing does not only involve advertising and promotions.
The PR industry is carving out an ever-increasing share of the marketing
business. Julie Hamilton of Ketchum Inc defines "advertising
as paid media, while non-paid media and direct-to-the-consumer events
fall under the umbrella of PR,"[47] and this is proving an ever
richer market for the PR companies to work in.
Most of the big PR companies have a brand marketing
practice. In the modern business environment branding is regarded
as crucial to effective marketing and simple advertising is no longer
enough to mark a brand out in the public mind. In addition to the
ever increasing volume of advertising to which we are exposed now
the media carry more and more 'news stories' about the latest gadget
or service being offered by a company X. The majority of such campaigns
may be fairly innocuous, such as the launch of a new brand of crisps[48],
or they may promote an environmentally damaging industry, as when
raising the profile of an airline[49]. It is always about consumerism
however.
Perhaps the most insidious aspect of this practice is
its 'dumbing down' effect on the nature of the media [see section
5.0].
An innovative and highly intrusive new promotional method
was reported in PR Watch's "Weekly Spin" news service: Jonathan
Ressler's company, Big Fat, Inc. uses "guerrilla advertising"
to bypass consumer resistance to traditional advertising.
Big Fat employs actors to pose as "real people"
and extol the virtues of his clients' products in bars, parks and
other public places. "We plant a group of people in a bar or
other public setting and instruct them to use a brand, perform a ritual,
repeat a sound bite, and involve others in the activity," Ressler
explains[50].
3.4 Public Affairs/Lobbying
PR has long been used as a tool to influence legislators
and governments. The potential rewards to a company of being able
to influence the legislative process or other government policy are
obvious. And it is an area that requires specialisation and expertise
to get results.
In the 1960s Hill and Knowlton was the first PR company
to offer lobbying services. This brought an immediate advantage over
competitors by being able to integrate PR activities with lobbying.
Very soon all the major PR companies were buying into lobbying. A
wave of innovation in the art of influence was engendered by this
development. The PR companies were then able to coordinate communications
aimed at legislators with those aimed at the public, increasing their
influence.
Bell Pottinger, the UK's largest PR company proudly
advertises its ability to "advise clients in all the regulated
sectors on how they can influence the political dynamics to the decisions
that impact on their bottom line."[51]
As in the sixties when H&K's Washington office began
to offer lobbying services on the strength of Robert Keith Gray's
political experience[52], the Public Affairs business still depends
greatly on the political experience and contacts of key individuals.
The Waterfront Partnership for instance, a British public affairs
company specialising in transport industry issues, is a partnership
of several individuals with extensive experience in the political
life of the transport industry[53]. One of the twelve partners, Stephen
Bramall, worked as a civil servant in the Department of Transport
for over 16 years including three years as permanent private secretary
to Ministers of State for Transport, whilst another, Arthur Leathley
worked as journalist for nineteen years, with several years as transport
correspondent for the Times and several more as Political correspondent.
Without the experience and contacts acquired by such individuals the
partnership would be worth very little.
It is not a simple task to measure the effectiveness
of lobbyists. The majority of their contracts are never mentioned
in the public domain and even if they were, evaluating the concessions
and amendments to legislation that may be achieved through lobbying
can be a specialist activity.
3.5 Reputation Management/Corporate
PR
To quote Fleishman-Hillard's web site, "Reputation
is a corporation's most important asset... Reputation influences all
the goals a company can set — getting a higher stock multiple,
generating higher profit margins, attracting and retaining the best
employees, finding strong business partners, and capturing both the
attention and loyalty of customers. Reputation also is a critical
factor in how well a company weathers a crisis."[54]
As this belief has become standard corporate dogma,
a vast new market has opened up for PR agencies and all of the big
companies offer 'reputation management' or 'corporate PR' as a service.
3.6 Investor Relations/Financial
PR
In the frantic world of finance where confidence and
image is everything, the PR companies can play a decisive role and
they push their advantages as far as they can. Getting the financial
press to talk up the prospects for a particular company can translate
into a boost in the share price. Conversely planting "negative
PR" stories may damage competitors.
Financial PR took off in the 1980s and has been growing
at an extraordinary rate ever since. In 1986 British companies spent
£37m on financial PR. In 1996 they spent £250m[55] and
"far from slowing down, as we look towards the new millennium
this rampant growth is set to accelerate," David Michie predicts.
With business booming, the big PR conglomerates have
been buying into financial PR rapidly. Of the top British agencies,
only the market leader, Brunswick[56], and Tulchan, founded by an
ex-Brunswick partner, are still wholly independent[57]. In the USA
most financial PR has traditionally been conducted by in-house PR
departments although specialist financial PR agencies are rapidly
growing their business on Wall Street.
Sarah Whitebloom, financial reporter with the Guardian,
writes "If you really want to know what is going on in business
and the City, don't bother reading the financial press. Ninety percent
of their stories have come hot off the fax machines of public relations
firms or have been 'provided' by one of the innumerable PR men who
stalk the Square Mile.
"When it comes to 'spin-doctoring, political practitioners
such as Peter Mandelson and Charles Lewington are amateurs compared
with their financial PR counterparts…. These days a good contact
is regarded by many junior reporters as a PR man who actually pays
for lunch."[58]
Financial spin doctors can wield enormous influence
over journalists just as they can in other PR sectors [see section
5, "PR and the Media"]. They have some additional incentives
for encouraging journalist cooperation that other PR people do not.
Michie quotes an anonymous City PR insider, "Let's say a journalist
hears from an insider that a company's results are going to be ahead
of forecasts, and lets say he hears this a few days before the official
announcement. That gives him plenty of time to buy a few grand of
shares through Aunt Mabel, write an upbeat exclusive, see the share
price rocket and offload his shares, turning an easy ten percent."[59]
Such practices are not uncommon in the Square Mile.
