Bernstein Crisis Management. Crisis response, prevention, planning, and training.


Crisis Manager Internet Newsletter about Crisis Management

04.01.05
ISSN:1528-3836
© 2005 Jonathan Bernstein
Circulation: 4,000+
Estimated Readership: 14,000+


JUST A THOUGHT

Make the plan idiot proof and someone will make a better idiot.

Source Unknown

CRISIS MANAGER UNIVERSITY

Talespin -- The Review
by Jonathan Bernstein

In my experience, case histories communicate the principles of effective crisis management probably better than any other form of education. I have reported on many of my own (usually with names changed) and featured case histories by guest authors. But the case histories that make headlines in the U.S., at least, are used and re-used by those in the PR trade, until few of us really want to continue talking about Bridgestone-Firestone, Arthur Andersen, Enron, 9/11, Martha Stewart or Michael Jackson.

So imagine my delight, as a consultant and newsletter publisher, to receive a copy of Talespin: Public Relations Disasters -- Inside Stories & Lessons Learnt by Aussie PR practitioner Gerry McCusker. A book with more than 300 pages containing case histories -- mostly from outside the U.S. -- about which I knew little or nothing.

Next pleasant surprise (i.e., I get sent a fair amount of bad writing): Gerry can tell a story succinctly, in an entertaining style that also educates the reader. His "Lessons Learnt" text boxes, alone, are worth the price of the book.

Last, but most certainly not least, Gerry has divided the crisis case histories in the book by dozens of categories so that any of us can quickly find a relevant case history. Some examples: Brands; Celebrities; Damage Limitation; Event Management; Financial PR; Grassroots Campaigns; Hype; Launches; and Propoganda.

Below, you will find an excerpt from Talespin, reprinted by permission, and then an email interview I conducted with the author. This issue of Crisis Manager is also the first in which I am using a three-part format to showcase an excellent book, so I hope you enjoy this presentation style (and let me know if you don't)!

Talespin was published in 2005 by Kogan Page and can be purchased at www.styluspub.com for US$29.95. In the UK, it is sold at kogan-page.co.uk for 18.99.

Talespin -- The Excerpt
The Most Disastrous Public Relations Exercise Ever Mounted by a Multinational Company

The decision by fast food giant McDonald's to sue two environmental campaigners -- David Morris and Helen Steel -- who publicized claims that McDonald's was wrecking the planet and poisoning customers, has been described as 'the biggest corporate PR disaster in history'.

Rather than a disaster instigated by the PR department however, the fiasco was driven by McDonald's management and legal advisers, keen to smite quickly information they saw as being potentially injurious to the corporation. But in pursuing David -- and Helen -- in Goliath-like fashion, the 314-day trial cost McDonald's more than 10 million in legal fees, with the editorial coverage of the court proceedings exposing the issues raised by the environmental campaigners to the full glare of the world's media.

Diet of information

The McDonald's court proceedings actually created a clamour for the information leaflet initially distributed by the pair outside one of McDonald's London outlets, which the company claimed was libellous.

Entitled, What's Wrong With McDonald's -- Everything That They Don't Want You To Know, more than 4 million copies of the pamphlet were eventually handed out around the world. A website about the trial -- McSpotlight, featuring 20,000 files of courtroom evidence, received close to 100 million 'hits'. Additionally, a one-hour documentary called McLibel: Two Worlds Collide was distributed via the internet, video, cable TV in the USA and at film festivals worldwide. In seeking to suppress information, McDonald's had accidentally promoted it.

Fast food for thought

So, what price corporate reputation? For all the money that McDonald's has ploughed into forging its image as a good corporate citizen, its over-zealous pursuit of two minnows undid it all. Additionally, it's almost impossible to assess how the case has galvanized pockets of opposition to the US $30 billion a year fast food corporation, potentially stoking up resistance to McDonald's development plans for years to come.

While the campaigners were eventually fined for libel damage against McDonald's, it was small fries compared to the negative publicity given to McDonald's for its links to cancer, heart disease, poor worker remuneration, cruelty to animals and exploiting children in advertising campaigns. All of these topics were investigated and publicly debated as they came to light in court. Therefore, it was a pyrrhic victory for McDonald's, given that the firm is unlikely to ever recoup the damages or legal costs because both the defendants were unemployed and, therefore, effectively bankrupt.

Lessons learnt

A real commitment to strategic PR -- specifically, scenario planning -- might have precluded what is widely regarded as the most spectacular and costly instance of PR madness the world of communications has ever seen. Because McDonald's failed to engage in effective scenario planning, the discipline of Public Relations which scans the horizon looking for potential 'impacts' that may affect the firm, it failed to predict the media's voracious appetite for any juicy story that threatens to bring a faceless corporation to book. By trying to predict what could occur and making contingencies for some of the potential outcomes of the legal action, McDonald's may have better gauged the strength of support for the 'little guys' and revealed the very real health concerns held by many people about fast food.

Talespin -- The Author
An Interview with Gerry McCusker by Jonathan Bernstein

JB: Per my Internet research, even the libel ruling against the defendants in the McDonald's case history was ultimately overthrown, probably after your book went to press. Does this motivate you to add anything to your narrative on this matter?

GM: Any new developments/updates to the mini case studies invariably lead to a fresh take or perspective, and maybe in this incident it's simply this; Were it possible for this episode to be more disastrous, then the pair's 'clearing' does it! It shows how the legal action was totally unneccessary.

On another level, too, the reverberations of Morris and Steele's campaign and the campaigns of their 'spiritual' collegues are currently being widely publicised - on the menu of every MacDonald's store in Australia. 'Salads Plus' healthier menu options prove a couple of things; first that some of the issues raised by Morris and Steel were legitimate. Secondly, from a PR viewpoint, they show that MacDonald's has listened and responded appropriately to consumer concerns over junk food.

JB: You very cleverly divided your case studies into categories, but can you say what four or five major errors many of these situations had in common -- i.e., the five biggest mistakes in crisis management?

GM: Just FYI, the categorisation was done to help me demonstrate how so called 'PR disasters' can emanate from almost any aspect of PR (or related) activity. I'd still have to stick by my assertion that it's a mix of malpractice (frequently intentional deceit), misjudgement (poor PR calls at strategic and tactical level) and the media's own appetite for negative news stories that are the fundamentals of true PR crises. To these, you could add general corporate arrogance and the misconception that organisations are only answerable to their stockholders as opposed to their stakeholders.

JB: What percentage of public relations practitioners, in your experience, really understand how to effectively prevent crises and/or manage well under fire when a crisis occurs?

GM: I love riding my motorbike, Jonathan, but I'd struggle to even change a spark plug on the thing. So I either leave it to the experts or learn by watching my mechanic do it. It's the same with Crisis Management or sponsorship optimisation or lobbying - work with a real expert every time. As for managing well under fire, we all know how demanding that is, and also, how unforgiving the corporate arena can be. I believe that a pre-selected and proven crisis management team is the best option for handling the white heat of the PR crisis. Not everyone takes that approach, though, and that's where disasters can really happen.

JB: What factors are key to ensuring that the negative impact of a crisis is short-lived?

GM: Conventional PR wisdom says that responding appropriately and quickly (the first 24hrs are critical in shaping perceptions) in a tough situation is essential for capping crises. In my own experience, though, I've also gotten away with stalling intrusive media to try to take the heat out of the issue; not that I'd prescribe this course of action, regularly, though.

I guess what I'm getting at is that your PR instincts and antennae guide you to respond in different ways in different situations. But, again, in the case I'm alluding to, I was also working with other crisis managers and we all agreed on the 'stalling' course of action in that situation. Key factor: collaborate with proven CM managers who really have a feel for the situation.

JB: Of the various crises that have occurred since your book went to print, which one or two do you think MUST appear in a second edition, presuming you will publish one?

GM: It's slightly depressing that there have been so many since the book went into print in January 2005!! Because my book's about helping all those involved in reputation management to maybe practice better, I think the cases that really involve and hurt PR itself would be on my hit list. The Ketchum/Armstrong Williams 'payola' debacle and the scandal surrounding Fleishman Hillard's alleged $4 million over-billing of the LA Water & Power Dept are two worthy of a look. As an avid soccer fan, though, I'm keenly watching a case that straddles the USA and UK. US tycoon Malcolm Glazer has been attempting to buy a large share of Manchester United, and the club now has a PR-savvy bunch of activists opposing his attempts and those of his city PR consultants in the UK. With fake orders for fast food and taxis plus paint daubing, it's becoming quite edgy and high profile.

Gerry McCusker has more than 20 years of experience working at a senior level in the PR and advertising industries. Based in Australia, he now runs his own consultancy, Generation Text.

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. It captures the full teleseminar in which the threesome answered questions such as:

  • If the attorney and PR person disagree, to whom should the CEO listen most closely?
  • When do PR considerations outweigh legal considerations, and vice versa?
  • What types of legal matters require close collaboration between legal and PR counsel?
  • What can a PR person do when dealing with an attorney who just doesn't "get it" with regard to crisis communications?
  • What can an attorney do when his client doesn't seem to understand the need for complementary PR?
  • What are some "right way/wrong way" examples that illustrate the principles of effective crisis management in legal matters?

Go to www.thecrisismanager.com for this and other educational and training materials produced by Jonathan Bernstein.

Crisis Alert Service Launched

For anyone who missed the announcement, Bob Aronson and I just launched a free "Crisis Alert" service to bring you news of trends and events that we believe could evolve into crises in the near future. The first alert addressed the dramatic rise in workplace use of methamphetamines and what readers could do to minimize the chance of that addiction creating crisis situations. [Note: Service has been discontinued.]

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

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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.