GM's crisis: avoidable, and then inevitable
Charting the future of public relations
Holmes Report

GM's crisis: avoidable, and then inevitable

Paul Holmes

General Motors, which has done a really impressive job of turning around its corporate reputation in recent years, now finds itself embroiled in a crisis of a type that really ought to be taught in public relations—and more important, business management—101. If this account at NBC News is accurate, this is an example of what for my money is the worst kind of corporate crisis, one caused not by accident or even negligence but by a cynical “business decision”; one that resulted in the loss of human life; and one that could so easily have been avoided. The story alleges that GM became aware of a “partial fix” for a problem with its keys in 2005, but decided, for whatever reason, not to apply that fix. GM’s own data reportedly suggests that the problem is now linked to a dozen deaths. The first question I ask when I read a story like this is always the same: “Where were the PR people when the decision was made not to recall the cars and implement a fix.” There are only three possible answers: the first is that they were never consulted (“it’s an engineering/legal problem, not a PR problem”; the second is that they were consulted, advised that a recall was the only sensible course of action, and ignored; the third is that they were consulted and thought that trying to get away without implementing a fix was a fine and dandy idea. In this case—as in most cases—I suspect that the first possibility is the most likely, that nobody in PR was ever brought into the discussion. And this is what is wrong with the way the PR function is treated by most large organizations: as a “communications” function that is better suited to explaining decisions than it is to making them. I’ve said this a thousand times, but it needs saying again. If a business decision has the potential to impact an organization’s reputation, its relationship with key stakeholders (like its customers), someone responsible for that reputation and those relationships should be in the room when the decision is made. Had that been the case, I’m pretty confident that even in 2005, that person would have been smart enough to point out that we are living in an age of transparency, that at some point the decision—and the thinking behind it—would make its way onto the front page of a national newspaper or a nightly newscast. And that when it did, GM’s credibility—carefully and expensively restored in recent years—would take a massive hit. It wouldn’t have taken much to make a compelling argument. Anyone with a few years of PR experience could have written the NBC News piece or the USA Today article that would eventually, inevitably appeared. Anyone in a position of respect within the company could have asked the engineers and finance people, “How are you going to feel when your mom reads about the decision you made today?” I don’t mean to pick on GM here. I believe that an awful lot of companies would have made the same decision the same way, without properly thinking through the reputational consequences. I keep waiting for the crisis that changes all that, that forces companies to reconsider the decision-making process and the role of PR in it. But I’d be happy to bet that this current crisis—as tragic and avoidable as it is—won’t be the one.
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