It has been an interesting time for reputation management in New Zealand. We’ve had MP Winston Peters battling accusations of undeclared political donations; Mercury Energy caught up with the death of late paying customer Folele Muliaga, and Fonterra knocked for six by the fatal Sanlu baby milk scandal.
In addition, many people still remember the embarrassing Ribena drink issue of last year when its maker GlaxoSmithKline was fined $217,000 for false advertising after its vitamin C drink was found to have no vitamin C in it.
All this, says Gary Mersham, professor of communication at the Open Polytechnic’s Centre for Social Sciences, is causing Kiwi firms to take long hard look at themselves and start to understand the concept of reputation management.
When it comes to protecting reputation, Mersham says the first mistake people often make is understanding the differences between proactive and reactive communications.
“When problem breaks, people are immediately in reactive mode, as you can well see from Peters’ example and of Fonterra,” says Mersham. “You are immediately on the back foot. The professional view is that reputation management should be as proactive as possible. In other words, deal with an emerging issue before it becomes crisis.”
It is pretty clear that when it comes to reputation management many leading Kiwi-based firms have been left wanting. Take for example the Ribena case when two schoolgirls did tests on the drink and discovered it contained none of the vitamin C the drink is well known for. The girls called the company’s head office to ask what was going on and were fobbed off. The company missed the warning signal and before they could say “blackcurrant” the media descended on them and the firm attracted worldwide negative publicity.
Mersham, co-author of Disaster Management, says the mud can stick for long time after the event and the Ribena issue is case in point that “shook lot of people up”.
“Even yesterday I saw new Ribena advertisement that was designed to try and patch up that huge dent in their brand,” he says. “So reputation management has become huge thing as result of these sorts of circumstances.
“I would say the idea of reputation management is, all of sudden, catching on in New Zealand. For example, the NZ Army has – for the first time – appointed reputation manager.”
Mersham says if he had been advising Winston Peters in the early days of the allegation about non-declared donations to Party funds, he’d have told him to double check everything before going to press conference and holding up the infamous sign saying ‘no’ [donations].
“You must be very careful about presenting the media with visuals that they can use in different kinds of context,” says Mersham. “So holding up signs with the words ‘yes’, ‘no’, ‘I love this’ or ‘I dislike that’, will become ball and chain to people such as politicians, which can stick with them for the rest of their lives. That was major mistake for Winston.
“But his first mistake was not to have done his homework. What he should have done when challenged by reporters was to offer to check the facts and give reporters timeline for when he would respond.”
But the treatment Peters got is all par for the course when you are politician says Mersham.
However, Mersham takes his hat off to how (then) National MP John Key handled it when asked about his shareholding in Tranz Rail during TV interview. It’s what Mersham calls ambush journalism – when reporter pounces on someone or asks an unexpected question.
“The John Key example is perfect illustration of this. But Key owned up to his shareholding interests straight away [admitting he had 100,000 shares and not the previously stated 50,000].”
Mersham says what is catching lot of companies out now is the growing number of blogs, giving anyone with computer potentially critical voice on the net.
“Because of new technologies and the viral nature of the internet, blow to an individual or company’s reputation is magnified because anything posted up is repeated across the network,” says Mersham. “And it is done in channels, places and spaces that traditional communications people aren’t used to managing or looking at.
“Typically, it used to be that if negative comments appeared in the newspaper or in the broadcast media then they’d see it as problem and know how to deal with it. But in reality lot is being said on blogs and our figures show that journalists are searching blogs for information first to see what they can find.
“That was certainly the case with the Winston Peters’ issue. Mainstream journalists were going from blog site to blog site picking up on rumours which could have been planted by people with vested interests.”
Mersham says there is now fine line between people blogging and the work of bona fide journalists. Companies, he says, need to be looking at the internet lot more.
One way to keep track of your company name on the net is to set up free Google alert. Once set up, any time the name you specify appears on the web, you get sent an email with link to it.
Mersham also points to case in Britain where snack manufacturer Procter & Gamble, maker of Pringles crisps, applied for the product to be exempt from the 17.5 percent sales tax on the technicality that Pringles contained less than 50 percent potato. The firm won its case in July, saved millions of pounds as result, and incurred the wrath of the global chip-eating public within hours of the decision.
“Within two to three hours of the court judgment, comments on blog sites were saying ‘this is terrible, how dare they sell us potato crisps that aren’t really potato’,” says Mersham. “That spread like wildfire.
“And it is this reduction in the delay from announcement to publishing that has got lot of professionals foxed – they don’t quite know how to deal with it. That’s the first big wake up. But PR people are getting faster in their reaction time.”
Mersham says research he has carried out as part of his book showed that firms have just eight hours to deal with crisis before it escalates out of control and risks negatively impacting on the company long term.
“In my experience, everybody thinks they won’t suffer from negative publicity,” says Mersham. “But crisis will hit firm at some time in its life cycle. For example, if you had said year ago that Lehman Brothers would collapse in the next 12 months no one would have believed you.
“There is always crisis looming. The question is, how quickly can you act. And that depends on your reputation management programme.
“The way in which bad news spreads, such as with Winston Peters, Fonterra and Ribena, shows that issues are never static – they spring off into different directions. For example, we’ll still be reading about the death of Princess Diana in 10 years’ time, simply because journalists are still digging around.”
Anatomy of crisis
A crisis goes through four stages
1.Warning / indication that something is not right.
2.Acute crisis stage. Damage has been done but the situation is still controllable.
3.Chronic stage. Extreme media attention, lawsuits, government scrutiny.
4.Crisis resolution and implementation of crisis communication.
Source: Disaster Management. Chris Skinner, Gary Mersham (Oxford University Press).
Turning things around
Few people have had as much hands-on experience when it comes to reputation management as the legendary Max Clifford. He’s an icon of the public relations industry in Britain, where the aggressive tabloid press makes New Zealand’s media look positively dainty.
Having cut his teeth promoting The Beatles in the 1960s, today he rubs shoulders with the rich and famous ensuring they get only the right kind of publicity. He also protects them from news reporters keen to stand up salacious gossip.
In fact, he is almost as famous today as his showbiz clients who include TV’s Pop Idol judge Simon Cowell and businessman Peter Jon
