Sunday 29 January 2012

Why some PR arguments can't be won


Few came forward in defence of Stephen Hester, the CEO of the Royal Bank of Scotland, when it was announced he was to be paid a one million pounds (USD 1.5m) bonus this year.   The bank is effectively in public ownership (83 per cent) after it was bailed out by the Government.   Mr Hester was hired to restructure the bank and manage it back to privatisation.

The Chairman of the Bank, Philip Hampton, publicly waived his £1.4m share bonus, either to deflect criticism (it hasn't) or to avoid public vilification.

Mr Hester didn't start with the public rooting for him.   Banks did not fare well in the latest Edelman Trust Barometer (banks and the financial sector remain the two least trusted industry sectors for a second year), and even less popular than banks are....bankers.  They're seen in Britain by most as the cause of the current financial crisis.

Labour blames the Tories, the Tories say they inherited the contract from Labour. The public are telling politicians to intervene - we own the bank - the Tories are effectively saying they don't like to, but they've told the bank how much they disapprove.

The arguments for Mr Hester's bonus go like this:

1.  He is being bonussed with shares which do not pay out till 2014, so it is a long term incentive plan.
2.  Mr Hester took a drop in conditions when he came from his previous employer to come to the public service.
3.  If Mr Hester is successful he makes money for the taxpayer when the bank is sold.
4.  Mr Hester is doing the job he was hired to do, doing it well and is entitled to a bonus under his contract, if we didn't want to pay him a bonus, we should have said so when we hired him.
5. You would have chaos in RBS if Mr Hester left, and that wouldn't benefit the taxpayer (Iain Duncan-Smith).
6.  Mr Hester's pay reflects progress in categories agreed with shareholders, and strongly geared to the recovery of RBS (RBS statements)


The argument against are:

1.  Mr Hester is a public servant, and no-one in the public service should be paid this kind of bonus (in fact no-one at all should be paid this kind of bonus).
2.  It's not fair.
3.  The bonus highlights inequality in society (SNP leader Alex Salmond)
4.  It's not fair.
5.  RBS has failed to lend enough to small businesses (Matthew Oakshott, Lib-Dem MP)
6.  It's not fair.

This is a classic no-win situation for RBS.  It's easy to see why in the arguments above.  The arguments for Mr Hester's bonus are rational and linked to agreements the Government signed.  The arguments against are emotionally driven.  Putting it simply, the public doesn't like it.  They are under severe financial pressure and are driven by a feeling of "unfairness".   Defining "fairness" is of course an almost totally subjective exercise, depending on how much you are benefitting from the alleged fairness.

For example, the decision to cap public welfare benefits in the UK is seen as "fair" by those members of the public in work (and therefore funding it) and "unfair" by those in receipt of benefit.  If there's any rational argument that will shift these positions, nobody's thought of it yet.  On this and the bonus issue, the strength of public feeling for the welfare cap and against Mr Hester's bonus is overwhelming.

To all of the pro-Mr Hester arguments, the answer is always the same: "that may be true, but it's still too much and I don't like it."

Rational arguments, at least in the short term, do not win over emotionally driven reactions to issues.  That does not mean you should not make the arguments, but it is very important, too, to acknowledge the feelings of those who are on the other side of the argument.  You can only stick it out and hope that emotions will calm, or that someone else comes along with an even bigger bonus than you to take your place.  Or you can give in, effectively conceding you were wrong.   Even if Mr Hester did this, he'll get little credit from an angry public.

You build trust by your behaviour, not your words.

This is an issue that will be faced over and over again as Europe slides towards recession and large remuneration packages are revealed.   I haven't met anyone in the last week who supports Mr Hester's position.  The phrase you hear most often is "they just don't get it" and "I thought we were all supposed to be in this together?"

Instead, RBS are left with little option now but to meet an emotional reaction with a rational argument - and it won't work.

The late and deeply popular Queen Elizabeth the Queen Mother was not only someone who "got it" but who was an expert in public relations before the term was even invented.    She was famous for visiting bombed areas, especially the East End of London and the Docklands with The King.  But when Buckingham Palace was itself bombed, she famously said "I'm glad we've been bombed.  It makes me feel I can look the East End in the face."   She was really saying, "you see, we're all in this together".


STOP PRESS:  Just as this blog was published, it was announced that Mr Hester would not be taking his bonus following the public outcry.








Thursday 19 January 2012

"An Unforgettable Holiday with Costa" - the crisis lessons begin


"As soon as you step onboard, you will realise what an unforgettable experience your holiday at sea with Costa will be", extolled the Costa Cruises website, nearly 24 hours after 3 people died (at the time) and 40 were still missing in a catastrophe for the Costa Concordia.

There are many lessons to be learned from the Costa Concordia accident, both in crisis communications, and in dealing with passengers involved in an emergency.




"Having a robust crisis plan is not optional" - The Hon Mary Jo Jacobi Jephson



But the overwhelming lesson is that your organisation must be prepared for the unthinkable.   "Where loss of human life or serious injury is a possibility, having a robust crisis plan is not optional", veteran comms doyenne and ex White House staffer Mary Jo Jacobi Jephson has said.  "And where loss of human life or serious injury is a possibility, rehearsing your crisis plan is not optional."





"There are echoes of the Titanic" - Simon Calder



As veteran UK travel journalist Simon Calder told BBC News: “It is unbelieveable.  A lot of people in the cruise industry are just astonished that this should happen to a 21st century ship when everything is designed with safety in mind. There must have been an extraordinary sequence of events....the ship was listing dangerously and people were jumping into the water, and I'm sorry to raise this, there are echoes of Titanic which happened a hundred years ago.’


Your crisis plan must work in situations you think will never happen.

For Costa Cruises and its parent company Carnival, it seemed that even the things that could be planned for hadn’t been enacted.  24 hours after the accident it still appeared possible to book a cruise on the Concordia on the Costa Cruises site, with a cruise the following week round the Balaeric Islands being offered at less than half price.  The  front page of the Carnival Cruises (Costa’ parent company) website was still extolling “Look what the carnival breeze blew in” a day later with a tiny link to a statement about the tragedy at the top left of the page.

The pages were changed later.

So, an easy lesson.  Make sure that your organisation's website can be suspended in the event of a tragedy.  Prepare "vanilla" pages that can quickly be populated with information about what is happening and are right in tone.  When a ship with 4,000 passengers falls over, it's time to show that your priority is those who are affected.

After any accident, of course, there must be business continuity in the rest of the business.  But care, compassion and taste come first - always.

But it does require you to have a robust plan.  Involve your web and social media teams in every rehearsal - no exceptions.

It also helps not to have a public row with the Captain of a lost ship about culpability in public.  It can sound like you're trying to say "it wasn't our fault".  At best, extremely unattractive.   But more of that another day.



(Posted from London)