This week, I am not writing about housing. We taking a trip back in time….to a moment that ushered us to where we are now.
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I was combing through some old digital files last week and came across a speech that I gave in October 2004 to a group of communications professionals. Reading it, I was overcome by a feeling that I had become - like Billy Pilgrim - unstuck in time.
I was struck by the similarities between the then and the now, and how the tendrils of history have knitted together to form our path into the future.
It was a hotly contested presidential election year;
The polls were close; the race certainly was not decided;
A major hurricane had recently hit, devastating at-risk populations;
There was turmoil in the media and its ability to serve the public was being questioned;
There was a revolution taking place in technology and digital citizen journalism was being birthed, and
The actions of corporations and public institutions were being questioned; trust had eroded.
It was, to quote Dickens, a “period… so far like the present period.”
There are many more connections…if you read on.
“History Doesn't Repeat Itself, but It Often Rhymes” – Mark Twain.
Corporate Communications 2004: Managing in a hostile environment
Presented to the Public Relations Association of Puerto Rico
October 8. 2004
(Slide) Thank you for providing me with the opportunity to speak to you today, and to visit this beautiful island again. I am thankful, as I know, of course, you are, that Puerto Rico and its people have been spared the worst from this horrific hurricane season.
(Slide– Freddy) Speaking of horrors, I think it wouldn’t be too much of a stretch to say that the environment for corporate communications has been pretty horrible recently. In some ways, it has been like a classic horror movie…the monster is in the house – and everyone knows it except for his next innocent victim. For the audience it’s all great fun and escapism, but for the victim, well, it’s not so much fun.
Ghoulish media, homicidal investors, alien regulators and politicians, and flesh-eating consumers, have emerged from the mists of the 1990s and have been chasing us like relentless zombies. They have managed to catch and kill quite a few executives. And corporate communicators the world over are having as much fun as the survivors in those movies. We breathe a sigh of relief, but know we’re probably not quite out of the range of these monsters.
The external and internal environment that we professional communicators are faced with today is still hostile – if not frightening - and, because of changes in attitude and technology, more difficult to manage than at anytime in my professional experience. Unfortunately for us, we are not in a movie.
(Slide – Corporate Killers) Corporate communications is definitely at a crossroads. The resentment caused by the stock market bubble and company scandals of the early 2000’s has not gone away. It is much like era following Watergate, which changed the relationship between citizens and government, and whose impact is still being felt more than 30 years later.
(Slide - WSJ Cartoon) Whether it is fair or not businesses that have not been touched by scandal have to accept that we are in a generation-long period of doubt – indeed mistrust – about the management and motives of any public-facing organization.
(Slide – Erosion of Trust) It’s not just the professional skeptics in media – we are seeing this doubt, skepticism and cynicism in all of an organization’s public constituencies.
And this is the major challenge that we communicators face.
How do we combat that? Can we? I believe the answer is yes, but I need to build some suspense into this story before I can give you some escape routes.
(Slide – Fortune Cover) Let’s look at the media. We have seen what is likely a permanent shift in the attitudes of the business media towards the organizations they cover. They have assumed a more activist stance – geared toward protecting the public against business excess – and exposing malfeasance. The business media views itself now as the primary watchdog for the investing public, much as the non-business media has long seen itself as a bastion of public-interest. The rah-rah of business journalism in the 1990s is no more.
In the Spring of 2000 -- I had the privilege of making a presentation to the Board of Directors of one of the oldest and most respected companies in America -- a company who has been in business for more than 200 years, and whose Board had some very high-profile, and very successful business leaders. In that presentation, we made the observation that the business media believed that part of its job was to compete with Wall Street analysts – to break news that would impact perception and valuation of businesses.
Remember, this was before the stock market bubble had really begun to burst, and well before corporate scandals started to become routine news. Our observation elicited a vigorous debate within the board about the media – with most of the board members not willing to accept this conclusion. How many of you would disagree today? (Repeat and ask for hands)
How many of you would agree that your management, or bosses or clients, are naïve about the way the media works? (Slide - CEOs in dark)
(Slide – Doom and Gloom) An important issue to understand – and I don’t profess to know how much you all follow the news from the mainland but the media itself is now very much under attack – and we could be on the cusp of a revolution of how we define media and journalism, and this revolution impacts how public relations will be practiced in the 21st century.
How many of you are familiar with the CBS News story on President Bush’s National Guard service and the furor that erupted following the report? (Show of hands.)
For those of you who are not familiar, in early September, Dan Rather reported on the news program 60 Minutes that documents had been uncovered that were allegedly written by one of President Bush’s superiors in the Texas Air National Guard. The story suggested that these documents proved the long-standing allegations that Bush had received favorable treatment and did not adequately fulfill his service requirements. These documents – from the 1970s – were explosive, they involved charges about the conduct of the president, and in the midst of a close and hot election. They were smoking gun so to speak that every news organization covets when breaking a major story. And these documents also, as it turns out, were a fake; they were forged. CBS News was duped. Now if the story were that simple, one of forgery and trickery -- it wouldn’t have been much of a story. CBS might have issued a retraction, and an apology. The story might have receded quickly, without much notice among the public at large. But of course, that did not happen. It became a classis crisis – it built slowly, and then exploded. CBS’s reputation has been damaged, perhaps irreparably. Of course it didn’t have to happen that way. (Slide - CBS cartoon)
From a communications standpoint, Rather-gate, as it has come to be known, followed the classic pattern of many crises, some quite familiar, but with some new twists that are of profound importance to professional communicators.
(Slide – Crisis) From a communications standpoint, many crises share similar characteristics, these are: Inaction, Denial, Redirecting criticism, Stonewalling and selective disclosure, and, finally, the Mea culpa.
Let’s dissect the CBS affair. Now, in the interest of full and fair disclosure, let me sat that I am going to condense, edit and editorialize, in the interest of time and entertainment value. I have not altered the facts – they are too good to make up.
Inaction – Literally moments after the report aired, doubts about the authenticity of the documents were raised on a number of web sites. The doubts were centered on issues about the typography of the memos – that they looked like computer-generated documents that could not have been produced in the early 1970s. This lead to a flurry of activity on the web, where literally dozens of people proved that the documents could be produced using Microsoft Word. CBS was silent as this activity escalated, and as speculation rose on where the documents came from, and if CBS had checked them thoroughly. This phase lasted a couple of days. This silence would come back to haunt them. Why? They let others control the discussion.
Denial – When CBS finally spoke about the questions being raised, two days later, they vehemently denied that there was an issue about the authenticity of the documents. Dan Rather did this personally. On the air. He pointed to the reputation and credibility of CBS News as the foundation for refuting these unwarranted questions. In other words, they asked the public to trust them, that there was no reason to pay attention to the critics. That CBS had credibility. It was a mistake that would come back to haunt them. Why? CBS provided no facts to rebut the criticisms, but they allowed Dan Rather – the public face of the organization – to personalize and emotionalized the issue through a continuing series of interviews and comments.
Redirecting Criticism - CBS also said that the criticisms were coming from partisan political operatives close to the President, and therefore could not be believed, should be discounted. In other words, CBS said that the critics were biased. CBS said that even if the documents were not authentic, the story was accurate Of course, as it turns out, CBS had obtained the documents from a source that was later discovered to be blatantly anti-Bush, but CBS never acknowledged that fact in its reporting. This oversight – to put it kindly -- was a mistake that would come back to haunt them. Why? When these facts emerged, CBS could no longer use its credibility as a defense.
Stonewalling and selective disclosure: - As the criticism escalated, CBS fought back. They brought out the experts in document authentication they used in checking out the documents, and although the suspected source of the documents was already being widely – and correctly -- discussed on the web – CBS refused to divulge how they got them and who gave them to CBS. . As it turns out, the so-called document experts that CBS used, never actually authenticated the documents themselves, or were asked about the typography. In fact, several of the CBS experts – when pressed by web-based investigators and other mainstream media now plowing into this story – denied having vouched for the authenticity of the memos. This stonewalling and selective disclosure would, of course, come back to haunt CBS. Why? It made its apology and explanation seem hollow and disingenuous.
Mea Culpa – Eleven days after the initial story, CBS issued a statement that they could not authenticate the veracity of the documents. They said that they would launch an investigation into how and why this occurred, and promised a full report to the public. One would assume that they thought that this would put the issue behind them, and put the monster back in the box.
Actually, the monster is alive and well and continuing to chase them – at least it was a week or so ago. Its affiliates have been besieged with complaints. More important is this…I quote from a news story on September 28, 2004 (Slide - Rather-Gate)
For the broadcast business, this is the scariest scenario imaginable. Ratings are dollars. The loss of credibility and trust is measurable. If you ever need a case study that lays out the anatomy of a crisis, here it is, complete with a tangible impact.
All very interesting. But how is it different than any other corporate crisis of the past? First and foremost, this was a powerful exercise of a new medium at work – the web logs, or blogs as they are called – and the implications of this emergence are far-reaching for communicators and their organizations.
(Slide - Challenges for Communications) The mainstream media will continue to be important, but they are losing the control over the public agenda that they have had for more than 100 years -- citizen journalists have begun to infiltrate the agenda-setting role of the mass media by using the internet and their own home-grown standards of what to publish and when.
Blogs can spread information or launch an unsupported critique of a product, company, or candidate much more effectively than any forum of the past. Blogs have no rules or restrictions, and usually have no paying customers to please. And, of critical importance to communications professionals, bloggers can completely circumvent the communications processes and approaches that put messages into context, present themed in a way designed to be delivered through mass media.
When dozens or hundreds of blogs link together, as we saw during the CBS affair, millions of people can quickly get a point of view on an issue or find out about new product features in a day or in an hour. And it’s not just blogs. Online sources delivered free through Yahoo and Google, among others, allow a millions of readers to see and compare versions of the news that only a very few professional journalists had access to.
In some cases savvy eye-witnesses may push the traditional media aside. Using cellphones, people can call or text message each other wherever they are. They can communicate immediately to ask friends to join or avoid an event, to organize themselves to take action on an issue, or to share news—all without being near a newspaper, television, or computer. If journalism is the rough draft of history, then these new information streams may be the unedited raw feed of history.
This is unlikely to be a temporary trend, since changes facilitated by technology seldom go backward. In addition, structural changes in the flow of information have created a vacuum in the marketplace. There are no longer hordes of highly paid securities analysts competing for soundbites every day, offering comments on companies as investments. Likewise, the ranks of industry analysts in many sectors are also depleted, without the economic bubble to fuel interest in their studies and rankings. On the other hand, self-appointed experts no longer so badly need reporters to make them famous - their own blogs can do that for them.
The speed and diversity of information sources in a volatile environment is both a threat and an opportunity for communicators. While the immediacy and disintermediation of journalists may be a problem for communications executives, it also presents a tremendous opportunity to recast ourselves and expand our contributions to our organizations. (Slide – Opportunities for communications)
We have the opportunity to define our role less narrowly. A big part of this opportunity is related to managing relationships with customers and influencers. Our credibility advantage is that we deal with issues and context, and we help to manage an ongoing discussion with the audience against that critically important backdrop.
How can we redefine the role of communications?
Communications people can be the chief issue officers for their organizations—some already are and more will be in the future.
That means creating for management a consistent, high level understanding of the issues and concerns in the marketplace, among investors, among employees and among other external influentials.
It also means helping all of the other functions in an organization see the benefit of understanding how the issue environment shapes expectations about companies and products, and what competitive advantages that can provide.
I believe that senior communications professionals in more organizations will take on the job of creating and maintaining a comprehensive vision of the issues environment that affects business outcomes. Issues management will not just be a label, listed somewhere in the organization chart of a public affairs department, as it often is today. It will be a way of understanding the entire function that communications professionals fulfill, on par with the marketing, sales and finance and legal departments.
Many communications professionals carry out this function today, but it has no formal name. Most often today, it only gets a seat at the management table in a time of crisis. But practicing issues management and strategy defensively squanders the opportunity that exists for issues to serve as a framework for understanding the needs that drive customers, the sales channel, regulators, investors, employees and suppliers will be lost. And your organization will be at a competitive disadvantage to those firms that see the need and act accordingly.
In the future, top communications professionals will help to manage the overall relationship with all customers by integrating a view of all of the issues, all of the audience segments, all of their needs, and where the company and actions, obligations, and products intersect with those issues.
Communications professionals will be identifying and helping to build relationships across third parties, with academics whose field relates to the company’s business, with interest groups inside and outside of the legislative and regulatory arena.
For if there is anything to be learned during this nightmarish environment that we and our organizations have been living through, it is that coordinating the outreach to influencers is an ongoing process related to brand-building and corporate reputation. In addition, to helping key management representatives form real relationships with influencers, communications people who manage the process well can use the influencer channel to support the company’s or the brand’s thought leadership.
The influencer relationship manager can also host networking and knowledge sharing opportunities that attract influencers, strengthening the corporate relationship, and also giving influencers some pay back for their participation.
In the end, the communications professional has to be the integrator of messages across the company and across all audiences. He or she is the person who sees how all of the relevant public issues come together as a backdrop for the company’s statements and actions, and is a manager of influential relationships and brand-building advocacy that can be so effective in the volatile, urgent world we will live in for decades to come.
And maybe that world won’t be as scary as it seems today.
Thank you.
Wow, Al! Thank you for sharing your presentation; you've given me much to think about.
Damn! You do fine work! Your insights are still dead on, and eerily current. My favorite phrase: the unedited raw feed of history. Mark Twain was right about history rhyming.