Image Patrol: Knowing A Crisis When You See One (A Tale of 2 Publishers)

I grew up in a house full of editors and publishers. Most of my
mother's side of the family worked for Hearst (my grandfather was
the general manager) and my father, a Time Inc. man, ultimately
ended up the publisher of Fortune magazine. In fact, when I was
little, I thought that publishing was the only occupation one could
have. As a result, I've always assumed that publishers and editors
were savvy enough about words and the media that they'd do a good
job protecting their image. But the recent crises faced by Hachette
Filipacchi and Bertelsmann are a pretty good indication that my
childhood delusions are still with me.

Bertelsmann

Two songwriters and two independent music publishers recently
sued Bertelsmann for $17 billion, accusing them of helping Napster
violate copyrights. The suit alleges that without support from
Bertelsmann, Napster would have folded months earlier, and millions
of songs would not have been downloaded.

I'm giving the German publishing giant a big benefit of the
doubt and blaming their inept handling of the media on cultural
differences. German media tends to be more polite and not nearly as
sensational as some U.S. outlets, so maybe they were expecting U.S.
reporters to go gently. But folks, haven't you learned YET that the
moment you "decline to comment" things always get worse?

I know legalese is hard to translate, but couldn't someone have
predicted when they bought Napster that someone might come out of
the woodwork and sue the much more deep- pocketed owner? I'm not
sure which is harder to imagine: That they didn't think of that,
or, if they did, why they wouldn't have had a crisis plan in place.
So the lawyers are driving the messages, the media is having a
field day, and Bertelsmann's only response is "I can't even confirm
if we've received it."

Hachette Filipacchi

Hachette, on the other hand, knows a crisis when it sees one.
During the Gulf War, news first surfaced that Saddam Hussein owned
more than mere weapons of mass destruction, he also owned outlets
of mass media--namely a $90 million stake in Lagardere SCA, parent
company of Hachette Filipacchi (publisher of numerous popular
magazines). At the time, the UN froze his assets and therefore
Saddam is still a 2 percent owner of Lagardere (which in turn
controls 8.4 percent of Hachette), despite a promise from
Hachette's publishers in 1990 to buy him out. Apparently, because
of UN sanctions that never happened.

A decade later, just as Hachette's publishers were worrying
about an anti-French backlash, the Hussein news surfaced. However,
thanks to a good crisis communications plan, chances are that
Hachette will weather the storm.

Katie Paine, president of KDPaine & Partners, can be reached
at [email protected] or
http://www.themeasurementstandard.com.
Katie is one of the speakers at our April 8 PR NEWS Webinar
(http://www.prandmarketing.com).

Bertelsmann
Criteria	Grade	Comments	Advice
Extent of coverage	B	There was a fair amount of coverage of the issue worldwide, but the good news for Bertelsmann is that there are so many lawsuits going on these days it would be easy to get lost in the shuffle.	Take a tip from our president: When the news is really, really bad, with a little luck--on a busy news day--it will get lost. That's pretty much what happened for Bertelsmann.
Effectiveness of spokespeople	F	Who knows, no one was talking.	No comment invariably leads to reporters digging deeper and readers expecting the worst.
Communication of key messages	F	When the only comment is "we can't even confirm that we ever received it," it makes the spokesperson sound completely out of the loop. Reporters will then conclude that you will always be the last to know and they will go elsewhere for information.	Even if it isn't your policy to comment on litigation, say something that doesn't leave readers thinking you're really stupid. Or totally out of the loop.
Management of negative messages	F	Management, what management? All the messages were negative, since Bertelsmann gave the media no alternative.	With no comment to make, the lawyers have the entire stage, so the only messages out there will be from your opposition.
Impact on customers	F	Bertelsmann's customers are both the buying public and the talent whose music they publish. A lawsuit charging that they aren't defining copyrights must make artists everywhere nervous. The fact that Bertelsmann appeared unprepared for this crisis should make those customers even more nervous.	If you know bad news is coming down the pike, do all that you can possibly do to warn the customer base and make them understand your point of view.
Impact on employees	F	We don't know if there's any better information being disseminated to employees, but rumors love a vacuum and $17 billion is a very large number. I'd be nervous if I were a Bertelsmann employee.	When you say "no comment" to the media, your employees hear it as well. And, lacking other information, will speculate and assume the worst.
Overall score	F	We slap the corporate knuckles of Bertelsmann. A successful and generally well run company like this should know better than to hide behind the "No Comment" approach.	NO matter how big you are, or how well perceived you may be as an organization, one "no comment" can destroy years of relationship building with the media as well as with other constituencies.

Hachette Filipacchi
Criteria	Grade	Comments	Advice
Extent of coverage	A	This story had everything you could ask for: immediacy, relevance and Saddam Hussein, but in the overall scheme of things, because advertisers and subscribers weren't bolting en masse in the end received remarkably little coverage.	The media is inherently reluctant to cover itself and it is even less likely to want to cover a story if there aren't major losses involved. In this case, by managing its constituencies well, Hachette avoided a major crisis.
Effectiveness of spokespeople	A	Hachette's spokespeople appeared prepared and well armed with facts and figures to countermand the "crisis" image. Deeds are by far the most persuasive element in a crisis, and obviously buying out Saddam Hussein would have been preferable, but lacking that "deed" to talk about, having solid figures on the response of advertisers and subscribers was the next best thing.	If you can't cite specific deeds, statistics are a good substitute.
Communication of key messages	B	The key message that came across was that they weren't losing either advertisers or subscribers.	It would be easy in a situation like this to appear defensive, but by relying on the statistics, they appeared credible instead.
Containment of negative messages	B	Under the circumstances they might have been lambasted for not following up on promises made in 1990, but, in fact, their consistent messaging managed to contain those negatives.	Consistency and openness triumph over silence and obfuscation every time.
Impact on customers	A	According to the data provided, the crisis was having little impact whatsoever on the reading public.	Commissioning research early on in the crisis was a brilliant move. Not only did it give Hachette data on which to make decisions, but it also gave them something to say.
Impact on employees	A	Given the sensitive times, this could have been a major negative for employees, and I'm sure many of them faced tough questions when they went home, but they were well armed with a clear explanation.	Whatever you say to customers should also be said to employees, just earlier and more frequently.
Overall	A	Hachette managed to--excuse the expression--duck a hail of bullets that might well have sunk their ship.	Solid research on which to base decisions, combined with good spokespeople, is the key to a well managed crisis.