Did APCO Really Fire Mark Hurd?

I have no way of knowing whether The New York Times' story about the role played by public relations firm APCO Worldwide in the dismissal of Hewlett Packard chief executive Mark Hurd is accurate. But it does raise a number of interesting questions about high-stakes crisis and issues management that are worth exploring.

First let me say that the Times' narrative---which makes it sound as though APCO's predictions of a media firestorm if Hurd remained led directly to his ouster---seems to be, at the very least, overly simplistic.

It would be nice to live in a world in which the lawyers and the finance guys and the board of directors were all cowed into submission by the mock-up of a news report criticizing the company for sticking with its CEO in the wake of charges concerning sexual harassment and falsified expense reports. But the reality is that few PR people--even at APCO--wield that kind of influence.

(For what it's worth, the Times later amended its story to say that APCO had not advised the company to fire Hurd, just to be open and transparent about the reasons for the firing.)

In any event, the analysis that accompanied the narrative was certainly simplistic. The authors, Ashlee Vance and Matt Richtel, point out that "even after following the specialist's advice, the company has not escaped criticism" and that "But in ousting Mr. Hurd, the directors set off a media scrutiny they had hoped to avoid."

It seems to me inconceivable that anyone at APCO--even the receptionist--would have counseled HP that if the company chose to dismiss Hurd it would "escape criticism" or avoid "media scrutiny." If you fire a CEO, particularly a high-profile CEO like Hurd, someone is going to notice and someone is going to question whether the decision was correct.

In circumstances such as these, good public relations people have to balance the negative impact of firing a CEO (in this case, quite intense but likely short-term) with the negative impact of sticking with him (perhaps less intense, but enduring and distracting the company over a longer period of time).

Great public relations people, on the other hand, will focus on the company's values, and recommend that the decision be based on fundamental principles that are important to HP.

One of those principlesis "trust and respect for individuals" ("We work together to create a culture of inclusion built on trust, respect and dignity for all," says the company). Another is "uncompromising integrity."

In an explanation of its decision, the company said it was enforcing the same code of ethics it would apply to any employee. At this point, it's important to remember that in an age of radical transparency, the charges against Hurd would have become public knowledge eventually. It's hard to imagine how HP could have done other than it did and maintained any credibility.

Even in the Digital Age, Speed Is Not Everything

It is, of course, conventional wisdom that in the digital age, it's even more important to move quickly when crisis strikes. But I'd suggest that the opposite is true: because things move so fast, it's important for organizations to make sure they are not being stampeded into hasty but ill-conceived decisions based on transient events.

A perfect example occurred last week, when a video surfaced at a conservative website purporting to show Department of Agriculture official Shirley Sherrod confessing that she gave preferential treatment to black farmers. Agriculture Secretary Tom Vilsack, apparently under pressure from a hypersensitive White House, responded quickly and forced Sherrod to resign.

The next day, White House deputy chief of staff Jim Messina reportedly praised the decision, telling colleagues: "We could have waited all day, we could have had a media circus--but we took decisive action, and it's a good example of how to respond in this atmosphere."

Or it would have been, had the video not been exposed as a total distortion of what Sherrod actually said. By the end of the week, the White House and the Department of Agriculture were furiously back-pedaling, but the damage had been done: by panicking as it did, the administration was made to look craven and weak.

Sometimes it's worth weathering an initial storm of criticism--however uncomfortable it may be for a few hours or even a few days--rather than to blunder badly because you couldn't wait for all the facts.

On the Importance of Empathy

Peter Sandman has another indispensable column at his website, this one focused on the importance of empathy, particularly in times of crisis--and the obstacles to achieving it.

The article is particularly apropos as we watch the senior leadership at BP struggle to engage with the victims of the Gulf Oil spill, but anyone who has worked with senior management during a crisis will recognize the barriers to empathic communication: managers who believe their success is proof that they know how to empathize; the belief that being right is more important than being empathic; the reluctance to empathize with people who are critical of the organization, often is less than circumspect terms.

But his most interesting point, I think, concerns the way in which executives' egos can get in the way of sensible strategy.

"I think the main thing wrong with corporate capitalism is insufficient preoccupation with profit," he says, somewhat counter-intuitively. But his explanation certainly resonates with me: "Faced with a choice between a path forward that nurtures profit at the expense of self-esteem versus a path forward that nurtures self-esteem at the expense of profit, most corporate managers at every level choose self-esteem, and then make up stories to convince themselves they're focusing on the bottom line."

I think there's a pretty compelling case to be made that one of the most important roles a public relations advisor can play is persuading the CEO to subjugate his ego to the good of the company, to impose empathy on the company's communications even when (especially when) no one else is feeling particularly empathic.

Can't Anybody Here Play This Game?

Is the corporate world suffering from a bout of collective amnesia when it comes to crisis management? First Johnson & Johnson, which almost literally wrote the book on best practice in crisis, mishandled a relatively straightforward product recall; then Toyota blundered its way through a major mechanical problem; then the Roman Catholic church got it all wrong ; and now BP seems to have gone tone deaf over the oil spill in the Gulf of Mexico.

In an interview with The Guardian, during which he acknowledged that he "will be judged by the nature of the response" to the crisis, BP's chief executive Tony Hayward manage to inflame the company's critics with his claim that "the Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume."

Even allowing for the fact that the comment presumably seems a lot worse out of context than it did when he opened his mouth, this is a colossally insensitive thing to say. BP seems to be asking us to judge it on all the water it hasn't polluted, all the wildlife it hasn't destroyed. It's like Ted Bundy asking for leniency on the grounds that the number of Americans he didn't kill far outweighed the number he did.

Some of my friends in the business suggest that companies are struggling to get a handle on crisis communications because of the rise of social media. This makes no sense to me. The rules of good crisis PR haven't changed because of social media--although companies that get it wrong are found out much more quickly and punished far more severely.

A better explanation, it seems to me, is that the gulf between the corporate world and the real world is getting wider. In the corporate world, with its singular focus on profit, the kind of decisions that lead to the Gulf of Mexico oil spill (or the current crisis at Goldman Sachs) are not only acceptable, they are inevitable. In the real world, they are incomprehensible and indefensible. And when confronted with the real world reaction, executives like Hayward are so stunned they have no idea how to respond.

Goldman's PR Seems Like a Perfect Reflection of Goldman's Culture

It's 20 years since I read a book called We're So Big and Powerful Nothing Bad Can Happen to Us, authored by USC professor Ian Mitroff, but rarely do more than a few weeks go by without some giant company reminding me of one of the book's central lessons.

Mitroff warned that large and successful companies are particularly prone to believing their own mythologizing. They come to believe in the rightness of their own mission to such an extent that any criticism of that mission is not only ignored, but taken as evidence that the organization's critics are either ignorant or malevolent. At best, they simply don't understand the institution or policy they are criticizing; at worst they are pursuing some agenda that involves the destruction of all that is right and good in the world.

This kind of thinking can be detected in the response of Goldman Sachs to those who are mildly displeased that the company helped to bring the entire global economy to the brink of financial catastrophe and yet continues to vocally oppose any checks on either its behavior or the rewards it lavishes upon those responsible.

The most visible example of Goldman's attitude was provided by chairman and CEO Lloyd Blankfein as part of a Sunday Times interview in which he insisted that the bank was doing "God's work." The clear implication is that anyone who opposed Goldman or criticized its behavior was pretty much by definition an agent--wittingly or otherwise--of Satan.

A similar contempt for competing viewpoints was evidence in the behavior of Goldman employees during protests in the City of London last year. Those who participated in those protests returned with stories of bankers ostentatiously setting light to currency (the smallest paper note in London is worth around $8) in response to anger at their role in the collapse of the economy.

So it seems a little unfair that a post at the New York Times' Dealbook blog focuses entirely on Goldman's PR chief, Lucas Van Praag. Even if all of the criticisms compiled in this post are true, it seems to me that Van Praag's attitude is merely a reflection of the corporate tone and--more significantly--the corporate culture.

Having said that, the most telling criticism comes from Market Watch, which has written of Van Praag's communications style: "The message is you're emotional and don't have your facts straight. We're reasoned and objective about our own matters. You, dear media critics, don't know what you're talking about."

It's interesting that people who respond with a knee-jerk defensiveness--a reaction that spares them the effort of actually engaging with their critics--always seem to believe that their critics are the "emotional" ones. In the world of psychology, I believe that's called projection.

Hire This Man Now

At his rather rudimentary website, risk management maven Peter Sandman--it was he who first defined risk as the sum of hazard plus outrage--has a couple of new articles, one of which indicates that he has started thinking about his legacy.

Sandman, who is now 64, is thinking about teaching a risk management master class (something he could do in his sleep); about turning his website over to new owners (the design might improve, the content won't); and about becoming someone's risk communications guru.

"The final leg of my legacy plan is a series of strategic partnerships with organizations that want to institutionalize my approach to risk communication as one of their areas of strength," he says. He has already formed a partnership is with the International Association for Public Participation, but says: "I am still looking for a public relations firm and a management consulting practice that might see my bag of tricks as a competitive advantage."

Someone should get Sandman on board, and quick. However strong your existing crisis communications capability is, believe me: it would be stronger--and more credible at the C-level--with Sandman as part of it.

Tiger's PR Problems Began with Phony Image

Unlike everyone else in the western world, I find the scandal surrounding Tiger Woods spectacularly uninteresting. Once you get past the fact that there are women who are prepared to have sex with golfers (!) it seems like a pretty banal, clichéd tale of tawdry sex.

But it does provide a helpful illustration of one of the classic misconceptions about public relations: that good PR involves making a company, brand, or--in this case--personality look better than it really is.

In truth, that's the probably the worst kind of PR you can have, because when the public discovers the gap between perception and reality is eventually discovered, as it inevitably will be--just ask Woods--the public backlash will be swift and furious.

In other words, Tiger's PR problems didn't begin with the discovery of his extramarital affairs; it began with the manufacture of an image that bore no resemblance to reality. That's a lesson for companies that see PR as a tool to exaggerate their records on environmental or social responsibility.

The 25th Anniversary of Bhopal

At this point, it seems highly unlikely that Dow Chemical will ever step up and accept responsibility for the 1984 accident in Bhopal, India, that killed around 4,000 people and left many more with lifelong health problems and indelible memories of pain and suffering and horror.

The company--which acquired the assets of Union Carbide, but apparently none of its obligations, back in 2001--has resolutely refused to accept any legal responsibility for Bhopal. That it bears moral responsibility seems to me to be unarguable, and so perhaps the best we can hope for today is that every year around this time (yesterday was the 25th anniversary of the incident) activists and reporters and people on conscience around the world do whatever they can to make the leadership at Dow feel a little shame for the way they treated--and continue to treat--the victims of Bhopal.

So kudos to New York University journalism professor Suketu Mehta, whose International Herald Tribune op-ed I read over breakfast in Hong Kong this morning and who captures the essence of the story in one sentence: "What's missing in the whole sad story is any sense of a human connection between the faceless people who run the corporation and the victims." So busy have the people who run Dow Chemical been distancing themselves from this tragedy that it would presumably be emotionally devastating for them to see the victims are actual living, breathing human beings. That doesn't means we should stop trying.

Meanwhile, Dow continues to invest millions of dollars in promoting its corporate responsibility and sustainability efforts. But the company's true values are reflected in its actions, not its words. And at least for one day out of the year, it's good to be reminded of those actions--and of the company's continued inaction on this one defining issue.

Free PR Advice for Tiger; None for GM?

Every day, Google sends me a news alert containing various stories about "public relations." For the past couple of days, fully half those stories have been about Tiger Woods, quoting the public relations advice of various industry experts. At the same time, the PR-focused LinkedIn group of which I am a member is in the midst of a discussion offering even more advice to Tiger. So far, the discussion has generated 40 posts, which is a good number as these things go.

Meanwhile, in case nobody noticed--and the evidence suggests nobody did--the chief executive of General Motors just resigned in circumstances aptly described by automotive industry expert Paul Ingrassia in The Wall Street Journal as "abrupt and enigmatic."

Covering the resignation, and the company's failure to explain it or provide any context for evaluating its impact, Reuters says that "GM needs to explain why it's changing its driver." Despite the fact that this is a communications issue, no public relations experts are approached for quotes, or for advice. (Compare to this parallel article on Tiger's PR problems, replete with quotes from PR and marketing experts.)

In other words, the more trivial the issue, the more likely reporters are to seek the opinions of PR people. And the most likely PR people are to want to volunteer opinions.

Look, I understand that there are people--including some PR people--who actually believe golf is more interesting than watching paint dry. I respectfully disagree, but I know those people are out there. I have no problem with them offering PR advice to Tiger. But it would be nice if they could give the impression that they are at least as interested in the public relations problems of one of the world's iconic corporations.

The Battle of Trafigura: A PR Fiasco

To get the obvious out of the way first, the attempt by the law firm Carter-Ruck to prevent The Guardian informing the British people of proceedings in the British Parliament was both disgraceful and counter-productive. And the resulting furor--including a storm on Twitter--surely demonstrated beyond any reasonable doubt that any attempt to stifle coverage in the social media age will have precisely the opposite effect.

The background, of course, is fascinating. The law firm in questions was acting on behalf of oil company Trafigura (an enterprise that makes ExxonMobil look like Ben & Jerry's), which has been trying to buy off the victims of its toxic dumping off the coast of Africa and which will--if Greenpeace has its way and the British justice system comes to its senses--soon be facing prosecution for manslaughter.

But since this is a public relations blog, let's focus for a second on the PR debacle that resulting from the attempted gagging order. The Guardian appears to have be silenced for about 12 hours, before Carter Ruck backed down. The story that everyone was trying to suppress, meanwhile, has become one of the biggest topics of discussion in social media, with outrage over the original scandal amplified and exaggerated by fury over the cover-up.

None of this was remotely unpredictable. Anyone with even the most rudimentary knowledge of the modern media landscape must surely have known that the attempt to silence The Guardian would mean bigger, nastier headlines.

So the obvious question is: where were the PR people in all this? There are three--and only three--possible answers:

1. Trafigura didn't bother to consult with its PR people--the company saw this as a legal issue. If that's the case, Trafigura management are morons. And its legal advisors are morons for not thinking about the possible PR consequences of their decisions. And its PR people must still take some responsibility because they have clearly failed to convince management that they have any kind of grown-up role to play.

2. Trafigura consulted its PR people and they agreed with the lawyers this was a jolly good strategy. If that's the case, Trafigura management are morons, the lawyers are morons and the PR people are incompetent morons.

3. Trafigura consulted its PR people and the PR people told the company that it was making a huge mistake. The company listened patiently, and then decided to do what its lawyers said it should do, ignoring the sound advice of the PR people. If that's the case, Trafigura management and morons, its lawyers are morons, and its PR people--unless they resigned en masse--has a serious self-respect deficit.

Any way you look at this, no one comes out of it covered in glory.

More Entries

Designed and Hosted by: Online Corp This blog is running version 5.9.1.002. Contact Holmes Report.com