Sometimes you win, sometimes you lose. And sometimes, there is no endgame. There are times in crisis communication when you can merely hope that the issue will disappear from the media agenda soon. The subprime mortgage crisis as well as the Lehman Brothers problem are the very demonstrations of the “no endgame” scenario. Yet, there are lessons to learn.
Don’t make stupid decisions
The mismanaged past is coming back to the investment banks to bite them. The management has made completely wrong decisions by disregarding a high leverage ratio and not being ethical enough to let the critics of the system be heard. What is worse, some of the vocal critics were fired.
Lesson learnt: the PR practitioners have to strive to become a more management and advisory function as opposed being the executors of the organization’s will. That way, the PR officers will have a say regarding the big decisions that are made in the board room. It also pre-supposes that the communicators will have their own ethical compass that points accurately to the North.
Noxious atmosphere makes winning impossible
Aside of the bad management decisions, communicating in a crisis-stricken environment where the issues overarch to the political sphere creates an atmosphere of negativity. The reporters are often left in the dark, overloaded with information and no major player in the field has anything truly positive to say. Logic dictates that media sentiment will not be in communicators’ favor.
The situation also cannot be contained due to its magnitude and the fact that it is not within the Lehman Brothers power to right its wrongs. Quite on the contrary, a reaction from the government, a naturally bureaucratic organization, is required. The firm or at some point of time, the entire sector cannot alleviate the fears and calm down the publics, because it does not possess the resources to do so. Dependency on an inflexible agent breeds uncertainty that is difficult to combat. The competitors weigh in, because they feel a chance to take a stab at the organization. This is a combination of many factors that makes the situation impossible to contend with; not even with a large PR team.
Lesson learnt: create a good contingency plan and to use the waiting time to put some positive news into the media.
Practice PR, not press agentry
The subprime mortgage crisis has lasted for approximately three years and the aftermath is still going on. It is a long run and to fix the reputation of the entire investment banking sector, of which Lehman Brothers (currently acquired by Barclays) is an important part, cannot be achieved fast. It will also require to think differently and to start tinkering with public opinion instead of merely generating media clippings. More quality, less quantity.
Lesson learnt: more identity building and less counting of published articles.
Dick Fuld said under oath that he was paid less than $310 million from 2000 through 2007, and that he held, rather than sold, the “vast majority” of his shares, if not all of them. But it’s becoming increasingly clear that he was lying.
That started a whole new storm of allegations and got the media pundits talking about ethics up in arms again. The negative publicity combined with a strong ethical issue was one of the leading causes of reputational harm for the entire sector.
Lesson learnt: The PROs should not lie and neither they should let their management to do so. Ignore at your own peril.
As with every analytical post, I don’t want to sound like a smart ass, so if you disagree, let me know.
To the fullness of credit, some thoughts are taken from a paper I wrote for Crisis Communication class.