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Definition of a Crisis
Any situation that is threatening or could threaten to harm people or property,
seriously interrupt operations, damage reputation and/or negatively impact the bottom line.
Crisis Manager Internet Newsletter about Crisis Management

06.01.05
ISSN:1528-3836
© 2005 Jonathan Bernstein
Circulation: 4,000+
Estimated Readership: 14,000+


JUST A THOUGHT

Poor response to a crisis is typically a symptom of much broader organizational and ego problems.

Jonathan Bernstein

CRISIS MANAGER UNIVERSITY

Editor's Note: As more proof of Jung's theories regarding the existence of a "collective unconscious" into which we all tap, I was given the thought, above, a week before the Arthur Andersen announcement hit the press.

Arthur Andersen Self-destructed In The Court Of Public Opinion
by Jonathan Bernstein

Yesterday, May 31, headlines across the world trumpeted "Supreme Court Overturns Arthur Andersen Conviction".

The remnants of the now-defunct, former industry leading accounting and consulting firm, issued a press statement on PR Newswire saying:

"We are very pleased with the Supreme Court's decision, which acknowledges the fundamental injustice that has been done to Arthur Andersen and its former personnel and retirees. We pursued an appeal of this case not because we believed Arthur Andersen could be restored to its previous position, but because we had an obligation to set the record straight and clear the good name of the 28,000 innocent people who lost their jobs at the time of the indictment and tens of thousands of Andersen alumni, as well as to help secure a fair resolution of the civil litigation facing the firm. This decision represents an important step in removing an unjustified cloud over the professionalism and integrity of the people of Arthur Andersen.

"As we have stated, this decision has far-reaching implications for businesses and individuals across the country in the way routine business decisions are implemented."

The latter statement is true but regarding the former, as a British friend of mine is prone to say, "Bollocks!"

At this time, do the majority of people really think that Arthur Andersen was innocent with regard to the Enron affair, or with regard to a number of similar-seeming situations in litigation prior to the Enron revelations?

Does anything in the Supreme Court decision, which overturns the case on what most of us would call a "technicality," absolve Arthur Andersen where it really counts - where the battle for survival should have been focused - in the court of public opinion?

I issued my own PR Newswire and Newsreleasewire.com release on May 31, which read, in part:

"'I believe that Arthur Andersen could have stayed in business, while legal matters proceeded, if its leadership had considered the court of public opinion to be as important as the courts of law,' said Jonathan Bernstein, president of national consultancy Bernstein Crisis Management, and editor of Crisis Manager, an international email newsletter.

"'The Arthur Andersen decision issued by the Supreme Court today proves, yet again, that you can be legally right and still get destroyed by the court of public opinion," he said.

"Bernstein recommends that companies faced with high-profile litigation ensure that legal and public relations strategy is closely integrated at the highest levels of the organization, with the final decisions on tactics and messaging coming from the CEO, not from either legal counsel or PR advisors.

"'Too often, the default is 'do what our lawyers tell us to do,'" said Bernstein. 'That is fine as far as it goes, but attorneys are only trained to win in a court of law. The best attorneys realize that the company has to survive in order for a legal win to mean anything, and the battle for survival often takes place outside the courtroom.'"

In response, and as a fitting conclusion to this article, a former Arthur Andersen partner wrote the email below to me, one that verified all that I knew from very close contact with Arthur Andersen personnel in the past. The partner was kind enough to give me permission to reprint this in a manner that preserved personal anonymity, as virtually every former partner is now, at a minimum, a "John Doe" or "Jane Doe" in ongoing litigation.

"I read your Arthur Andersen Still Lost in the Court of Public Opinion on newsreleasewire.com today.

"I am a former Andersen partner, present during and after Enron destroyed the firm, and I agree 100% with your thoughts. When Enron hit, the firm's leaders acted with typical arrogance. They were sure the firm's reputation, blue-chip client base and history of integrity were proof that nothing adverse would happen. They saw no reason to address the public relations issues and in fact, held back on releasing a long-awaited, aggressive PR campaign (several hundred million) that the partners had previewed and that was scheduled for release at the end of 2001.

"It was embarrassing to see the complete absence of any leadership at all. The firm deserved to be hung out to dry. God knows, they would've advised their own clients to have 15 or so contingency plans in place to respond to such a crisis, but it could never happen to Andersen, so they didn't do it themselves.

"Never say never."

Editor's Note:How many consulting organizations do you know of that offer advice designed to protect and preserve their clients' welfare -- but then don't take a lot of their own advice? It would be interesting to find out, for example, how many of the "top 100" law firms, or the surviving accounting firms, have actually engaged in the full spectrum of crisis preparedness work -- vulnerability assessment, planning, training and simulations. My guess? Less than 10 percent.

Coming Attractions

I am in the pleasurable process of going through the new book by renowned lecturer and consultant Jim Lukaszewski, Crisis Communication Plan Components and Models, Crisis Communication Management Readiness, published jointly with the Public Relations Society of America. A future issue of Crisis Manager will include a book review, excerpt and interview with Jim.

Also in the works is an industry survey on crisis management-related topics I plan to conduct using new software made Available to me for that purpose -- which will, de facto, end up being a software review as well!

Crisis Manager Article Gets The Most Hits In Polish Newsletter

I'm kinda tickled to announce that a previous Crisis Manager article about The C-Factor, now archived here was reprinted by permission in the Wiadomosci PRoto newsletter at the Polish website PRoto ("This is PR"). Publisher Magda Klimkiewicz reported excitedly that the article received the most "clicks" of any piece they posted over a two-month period.

Cudowny! Fantastyczny!

CRISIS MANAGER BUSINESS ANNOUNCEMENTS

CD-ROM: Crisis Management & The Law
How PR Pros & Lawyers Can Work Together Effectively
Featuring Jonathan Bernstein, Richard Levick and Ed Novak

On February 23, 2005, Jonathan Bernstein played talk show host and expert commentator in a one-hour teleseminar featuring internationally renowned litigation PR expert Richard Levick and one of the country's top white collar crime attorneys, Ed Novak. This CD-ROM is a "must have" to play for the executive staff of any organization, for practice group meetings at law firms, or for the entire staff of any PR agency.

Go to www.thecrisismanager.com to read more details about and/or to order this CD-ROM, and to learn of other educational and training materials produced by Jonathan Bernstein.

Keeping The Wolves At Bay

Keeping the Wolves at Bay remains, to my knowledge, the only commercially published media training manual in the world. It can be purchased in PDF or hard-copy form at www.thecrisismanager.com, and its pages can be modified to make it your "name brand" media training manual if you are an agency or organization that frequently conducts training. If the latter subject is of interest to you, write to: jonathan@bernsteincrisismanagement.com.

Broadcast Interview Source

This service has helped Jonathan Bernstein establish himself as a trusted source of information and knowledge. New members can save $100 when they jump from this link:

http://www.ExpertClick.com/Referral/Bernstein_Crisis_Management

or call (202) 333-5000 and request the discount based on the Bernstein Crisis Management referral page.

PLAIN ENGLISH DISCLOSURE

Bernstein Crisis Management, Inc. has formal or informal co-promotional and mutually beneficial business associations with a number of the services we mention periodically in this newsletter. No, we can't go into details because that's confidential, proprietary, etc. But our relationship is NOT "arm's distance" and you should know that, since we regularly write about these services as we use them for crisis and issues management or other purposes. That said, you should also know that Bernstein Crisis Management sought the relationships because its staff is convinced that these services are the best of their kind for Bernstein Crisis Management's needs and those of its clients. If you have any questions about these relationships, please contact Jonathan Bernstein, (626) 825-3838.

ABOUT THE EDITOR & PUBLISHER

Jonathan Bernstein is president of Bernstein Crisis Management, Inc., www.bernsteincrisismanagement.com, a national crisis management public relations agency providing 24/7 access to crisis response professionals. The agency engages in the full spectrum of crisis management services: crisis prevention, response, planning & training. He has been in the public relations field since 1982, following five-year stints in both military intelligence and investigative reporting. Write to jonathan@bernsteincrisismanagement.com.

Bernstein Crisis Management, Inc. is located at 1013 Orange Avenue, Monrovia, CA 91016. Telephone: (626) 825-3838.

GUEST AUTHORS

GUEST AUTHORS are very welcome to submit material for "Crisis Manager." There is no fee paid, but most guest authors have reported receiving business inquiries as a result of appearing in this publication. Case histories, experience-based lessons, commentary on current news events and editorial opinion are all eligible for consideration. Submission is not a guarantee of acceptance.

LINKS

When I find a site that I think will be useful to my readers or site visitors, I put it on our Links page. If you have a site that would be of specific use to crisis managers and want to discuss a link exchange or other cooperative effort, please write to me, jonathan@bernsteincrisismanagement.com.

LEGAL DISCLAIMER

All information contained herein is obtained by Jonathan Bernstein from sources believed by Jonathan Bernstein to be accurate and reliable.

Because of the possibility of human and mechanical error as well as other factors, neither Jonathan Bernstein nor Bernstein Crisis Management is responsible for any errors or omissions. All information is provided "as is" without warranty of any kind. Bernstein Crisis Management and Jonathan Bernstein make no representations and disclaim all express, implied, and statutory warranties of any kind to the user and/or any third party including, without limitation, warranties as to accuracy, timeliness, completeness, merchantability, or fitness for any particular purpose.

Unless due to willful tortuous misconduct or gross negligence, Jonathan Bernstein and Bernstein Crisis Management shall have no liability in tort, contract, or otherwise (and as permitted by law, product liability), to the user and/or any third party.

Under no circumstance shall Bernstein Crisis Management or Jonathan Bernstein be liable to the user and/or any third party for any lost profits or lost opportunity, indirect, special, consequential, incidental, or punitive damages whatsoever, even if Bernstein Crisis Management or Jonathan Bernstein has been advised of the possibility of such damages.

A service of this newsletter is to provide news summaries and/or snippets to readers. In such instances articles and/or snippets will be reprinted as they are received from the originating party or as they are displayed on the originating website or in the original article. As we do not write the news, we merely point readers to it, under no circumstance shall Bernstein Crisis Management or Jonathan Bernstein be liable to the user and/or any third party for any lost profits or lost opportunity, indirect, special, consequential, incidental, or punitive damages whatsoever due to the distribution of said news articles or snippets that lead readers to a full article on a news service's website, even if Bernstein Crisis Management or Jonathan Bernstein has been advised of the possibility of such damages. Authors of the original news story and their publications shall be exclusively held liable. Any corrections to news stories are not mandatory and shall be printed at the discretion of the list moderator after evaluation on a case-by-case basis.

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Articles in "Crisis Manager" were, unless otherwise noted, written and copyrighted by Jonathan Bernstein. Permission to reprint will often be granted for no charge. Write to jonathan@bernsteincrisismanagement.com.


Copyright © 1996-Present by Jonathan Bernstein. All Rights Reserved.

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