Now Is Too Late: Why You Have the Black Hat On

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Now Is Too Late: Why You Have the Black Hat On

  1. 1. Now Is Too Late: Why You Have the Black Hat On And What You Can Do About It. <ul><li>Presented by Gerald Baron </li></ul><ul><li>Founder AudienceCentral—Creator of “Virtual Communication Centers” </li></ul><ul><li>Author of “ Now Is Too Late : Survival in an Era of Instant News” </li></ul><ul><li>Public Relations Society of America </li></ul><ul><li>October 28, 2003 </li></ul><ul><li>New Orleans, LA </li></ul>
  2. 2. White Hats and Black Hats <ul><li>Why your reputation is at greater risk than you may think </li></ul><ul><li>The credibility “hole” and how it got there </li></ul><ul><li>Infotainment and the melodrama formula of journalism </li></ul><ul><li>Link between media, activists and politicians </li></ul><ul><li>Instant news and “embeds” </li></ul><ul><li>Internet and the “post-media” world </li></ul>
  3. 3. Where Did This Stuff Come From? <ul><li>Personal experience: </li></ul><ul><ul><li>Refinery explosion with six fatalities </li></ul></ul><ul><ul><li>Pipeline explosion with three fatalities </li></ul></ul><ul><ul><li>Numerous other (forestry, labor, medical, waste, white collar crime, etc..) </li></ul></ul><ul><li>Media frenzy </li></ul><ul><li>Political action </li></ul><ul><li>Extensive legal </li></ul><ul><li>Billions in damages, settlements </li></ul>
  4. 4. The Hole We’re In: The Credibility Crisis Source: PR Strategist, Spring 2003 Edelman “Trust Barometer”
  5. 5. How Does the Media Treat Business? <ul><li>1997 Media Research Center Study: </li></ul><ul><ul><li>900 tv entertainment shows analyzed </li></ul></ul><ul><ul><li>Businessmen commit most crimes </li></ul></ul><ul><ul><ul><li>3 times more than career criminals </li></ul></ul></ul><ul><ul><ul><li>3 times more murders than career criminals </li></ul></ul></ul><ul><ul><li>More likely to cheat than contribute positively </li></ul></ul>
  6. 6. It’s Not That Only Others Have Dug the Hole… <ul><li>Accounting scandals </li></ul><ul><li>Insider trading </li></ul><ul><li>Tire problems covered up </li></ul><ul><li>Maintenance shoddy </li></ul><ul><li>Etc., etc., </li></ul>
  7. 7. To Make Things Worse: the Three “I’s” <ul><li>Infotainment—the dominant form of news coverage </li></ul><ul><li>Instant News—when it happens it happens fast </li></ul><ul><li>Internet—and gets spread far </li></ul>
  8. 8. Infotainment: When News Became Entertainment <ul><li>60 Minutes enters primetime </li></ul><ul><li>Ratings success of news programming </li></ul><ul><li>Adoption of entertainment forms </li></ul><ul><li>The Nightline vs Letterman Debate </li></ul><ul><li>“ Reality” programming—fiction or non-fiction? News or entertainment? </li></ul>
  9. 9. News as Entertainment: the melodrama formula <ul><li>Good guys </li></ul><ul><ul><li>Accusers: activists, whistleblowers, regulators, disgruntled employees, competitors, etc. </li></ul></ul><ul><li>Bad guys </li></ul><ul><ul><li>Those accused (you) </li></ul></ul><ul><li>The Maiden in distress </li></ul><ul><ul><li>Public good: health, safety, financial security, environment </li></ul></ul>
  10. 10. One Small Example: Colossus May 13, 2003 KING5 Seattle (NBC) “ I feel like it’s a conspiracy of the insurance industry against the average American consumer.” One accuser (lawyer) “ A computer doesn’t know what we’ve gone through…” Victim accuser
  11. 11. From Event to Reputation Disaster <ul><li>Examples: </li></ul><ul><ul><li>Enron/Worldcom—Sarbanes-Oxley </li></ul></ul><ul><ul><li>Olympic Pipeline—pipeline safety act </li></ul></ul><ul><ul><li>ExxonValdez—OPA 90 </li></ul></ul>Event Initial Report Victim-Accusation Politicians jump in New laws and why we need them Stories & presumed public concern provide justification for legislative action, action provides justification for continuing stories
  12. 12. Instant News: On the scene before you can react <ul><li>The Breaking News phenomenon and ratings </li></ul><ul><li>Cheap on-scene production </li></ul><ul><li>Technology drives transparency: embeds </li></ul>
  13. 13. Internet: A New Postmedia World <ul><li>Transmitters and press for opponents (imagine your most strident opponent owning CNN) </li></ul><ul><ul><li>Ability to spread and sustain issue </li></ul></ul><ul><li>Expectation of direct communication </li></ul><ul><ul><li>Millions of hits on news source websites (Alaska, Navy, FBI, Firestone, Florida elections) </li></ul></ul><ul><ul><li>Anger when expectation is not met (Kursk) </li></ul></ul>
  14. 14. Why Higher Reputation Risk? <ul><li>Approximately 9000 business crises per year (Institute of Crisis Management) </li></ul><ul><li>We’re starting in a hole with credibility limited by negative public perceptions and entertainment media attitudes </li></ul><ul><li>If trouble happens, we’ll be wearing the black hats </li></ul><ul><li>The fast pace of news means now is too late </li></ul><ul><li>The audiences have higher expectations of direct, open communication than ever before </li></ul><ul><li>Legal involvement is necessary but can slow response and add to risk </li></ul>
  15. 15. What Can Be Done? <ul><li>Protect your credibility at all costs (even legal) </li></ul><ul><li>Make friends now </li></ul><ul><li>Be able and willing to communicate directly , not just through the media </li></ul><ul><li>Prepare now to communicate instantly </li></ul>NASA’s response to the Columbia disaster provided prime example of crisis communications
  16. 16. Does It Work? Some Examples <ul><li>Ship aground </li></ul><ul><li>Communication manager in Houston </li></ul><ul><li>Crisis site launched in minutes with full background info </li></ul><ul><li>Situation updates to mgt in London </li></ul><ul><li>Able to send releases and updates to media/stakeholders/execs </li></ul><ul><li>All from home computer </li></ul><ul><li>No leak—no disaster, but prepared </li></ul>Pilot accused of racial profiling against Secret Service agent Arab American activists join in accusation. President “furious.” Instead of waiting for court, airlines quickly revealed agent’s provocative behavior Case dismissed
  17. 17. Protect Credibility <ul><li>Credibility is like gold </li></ul><ul><li>Once it is lost, nothing you say matters </li></ul><ul><li>CEO’s tough decision: court of law vs. court of public opinion </li></ul><ul><li>Crisis response cannot be turned over to the lawyers </li></ul>Arthur Andersen: the lawyers were trying to stamp out the fire in a wastebasket (one partner’s coverup) while the whole building was on fire.
  18. 18. Make Friends Now <ul><li>If credibility is lost, only those with credibility can speak for you. </li></ul><ul><li>Do you have loyal friends with high credibility who will speak on your behalf in worst case scenario? </li></ul>
  19. 19. Prepare NOW to Communicate Directly <ul><li>It’s a postmedia world </li></ul><ul><li>Millions of hits—can your site handle it? </li></ul><ul><li>Stakeholders expect direct and instant communication </li></ul><ul><li>Non-responsive means guilty as charged—even when all you are doing is responding </li></ul>
  20. 20. Prepare NOW to Communicate Instantly <ul><li>Virtual Communication Centers (VCC) </li></ul><ul><li>Web-based—all tools at hand wherever </li></ul><ul><li>Collaboration—including legal </li></ul><ul><li>Web management along with email/fax/phone distribution </li></ul><ul><li>Inquiry management </li></ul><ul><li>Efficiency—one person or small team do the work of dozens </li></ul>
  21. 21. Where VCC’s Are Being Used <ul><li>US Coast Guard (4 districts) </li></ul><ul><li>Major oil companies (Shell, BP) </li></ul><ul><li>Major shipping companies (STASCO, BP Shipping, Teekay) </li></ul><ul><li>Numerous others: insurance, pharmaceuticals, food, associations, etc. </li></ul>
  22. 22. Reputation Risk: Communicate FAST <ul><ul><li>Build equity </li></ul></ul><ul><ul><li>Make friends </li></ul></ul><ul><ul><li>Prepare to tell your story </li></ul></ul><ul><ul><li>Tell it directly </li></ul></ul><ul><ul><li>Tell it fast </li></ul></ul>The grand prize: A white hat AND a much valued reputation
  23. 23. Thank You! <ul><li>Gerald Baron </li></ul><ul><li>AudienceCentral </li></ul><ul><li>www.audiencecentral.com </li></ul><ul><li>360-756-8080 </li></ul><ul><li>[email_address] </li></ul>

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