These days, the odds of facing a lawsuit are about the same as receiving a Ken Starr subpoena if you work at the White House. So this month, we look at two vastly different approaches to dealing with the courts.
Royal Caribbean Cruise Lines, in agreeing to settle a 1996 indictment from the U.S. Coast Guard for illegally dumping bilge water containing oil into the oceans, provides a shining example. In dishing out this praise I am not ignoring that the dumping took place, as did a conspiracy to cover it up. I am simply looking at the communications.
Royal Caribbean's President Jack Williams provides a model quote, widely published in even the shortest of AP blurbs: "We deeply regret our role in polluting the marine environment and we are particularly sorry for the attempts to conceal that pollution. These acts were inexcusable, they were wrong and we accept full responsibility for these violations. In retrospect, we did not do a good enough job monitoring and enforcing our own environmental standards."
On the other hand, Beverly Enterprises, Inc., the nation's largest operator of nursing homes and provider of post-acute healthcare services, demonstrates how to provoke the media for all the wrong reasons. Consider this example a lesson in what not to do.
Beverly sued Professor Kate Bronfenbrenner of Cornell University for $225,000 for saying at a Pittsburgh town meeting that Beverly uses unfair labor practices to prevent unions from organizing workers at its 700 nursing homes, practices Beverly has been accused of in the past.
In response, The American Association of University Professors has filed a friend of the court brief on Bronfenbrenner's behalf and more than 500 professors signed an e-mail petition decrying the lawsuit as an attack on free speech and academic freedom.
Not only did Beverly file this obnoxious civil rights-threatening lawsuit, but when it was thrown out of court, they vowed to pursue the issue.
Beverly spokespeople have come off as arrogant and insensitive.
Senior VP Donald Dotson has been quoted as saying that there is "irrefutable evidence" that the professor's remarks were "based on many gross errors concerning Beverly."
Four lessons can be drawn:
- Don't go after the underdog (remember McLibel?);
- Don't go after private parties (nothing provokes reporters more);
- Don't attempt to squelch an investigation; and
- Don't reveal anti-labor sentiments, as most reporters are union members.
Katharine Paine is founder and CEO of The Delahaye Group, an international image consulting firm based in Portsmouth, N.H. If you have a suggestion for an Image Patrol column, you can reach her at 603/431-0111. She will be a speaker at PR NEWS's Advanced Crisis and Media Relations Two-Day Workshop Sept. 14 and 15 at the Sir Francis Drake in San Francisco.
Royal Carribean
- Headquarters: Miami, Fla.
- No. of Employees: 18,000
- 1997 Revenue: $1.94 billion
- No. of Corporate Communicators: 9
- No main PR firm
| ROYAL CARIBBEAN CRUISE LINES | |||
| Criteria | Grade | Comments | Advice |
| Extent of coverage | B | The settlement received widespread attention, and virtually every story contained President Jack Williams's apology. | I'm sure it would have preferred less exposure of the bad news, but at least its sound bite was included. |
| Effectiveness of spokespeople | A | Williams sounds like a president with whom I'd like to work. He was contrite, but didn't sugarcoat anything. | Either Williams is instinctively good, or he is one of those presidents who believes in good PR; understands its value to image and the bottom line; and listens to counsel about media training. |
| Communication of key messages | A | Because the sound bite was compelling and apologetic, it was in every story. | Keep it simple. Say you are sorry, accept responsibility and say why it's not going to happen again. |
| Management of negative messages | A | Williams, in fact, controlled the negative messages by putting them right in his quote. | If the news is truly bad, the best you can do is exert some control over it. Get it out there yourself, give the press as much bad news as there is, and get it over. The media will move on to something else. |
| Impact on customers | B | Probably not much. Dumping oil was clearly a widespread practice - and not limited to Royal Caribbean. Will consumers have a negative image of RC as a result? Only consumer research will say for sure. | RC has a huge opportunity to turn itself around and raise its environmentally responsible image. And it should match the $9 million the Feds made them pay and become an industry leader in preserving and protecting the marine environment. |
| Impact on investors | A | Probably negligible. Even though $9 million was the largest fine ever levied on a cruise line, it's still not much to a $19 billion-plus company. | If you've got bad news coming, warn investors. The only thing they hate more than bad news is surprises. |
| Impact on employees and prospective employees | A | The message to employees was loud and clear. Our culture has changed and concealing information will not be tolerated. | If I were an employee of high integrity I'd feel much better about the company. On the other hand if I were at all involved in the dumping or the cover up I'd be looking for a new place of employment. |
| Overall score | A | Congratulations goes to RC's communications team and to Williams for establishing mutual trust and credibility. | Good crisis handling starts years beforehand with the establishment of good relations and understanding between the PR function and the president. RC obviously did its homework. |
Beverly Enterprises
- Headquarters: Fort Smith, Ark.
- No. of Employees: 77,412
- 1997 Revenue: $3.2 million
- No. of Corporate Communicators: 9
- No. of IR Staffers: 3
- No main PR firm
| BEVERLY ENTERPRISES, INC. | |||
| Criteria | Grade | Comments | Advice |
| Extent of coverage | F | I'm willing to bet it never expected as much coverage as it received. Because of the privacy issues the coverage was widespread and every report made Beverly out to be the bad guy. | To get some really widespread bad publicity, file a lawsuit on a sensitive issue against an underdog. Beverly now is considered a flagrant abuser of labor laws. |
| Effectiveness of spokespeople | F | Beverly spokespeople sounded arrogant and insensitive | If you want to really ensure a bad public image, sound arrogant and angry and vow to fight on even when the courts have thrown out your suit. |
| Communication of key messages | F | Did they have any? | As long as you are going to generate widespread publicity, at least communicate a key message other than "We don't like this professor or what she's been saying." |
| Management of negative messages | F | If Beverly had not taken the professor to court, no one would have known that it had some questionable labor practices. | Do not file suit on a volatile issue unless you want the world to know every gory detail about your business. |
| Impact on customers | C | The one advantage that widespread publicity has is that Beverly now has name recognition that it never enjoyed before. (Unfortunately, it is tainted.) Will labor violations keep union members from sending their relatives to Beverly's facilities? | Think about all your constituencies and what's important to them. While labor issues may not be of great concern to some groups, it is a huge issue with union members. |
| Impact on investors | D | Taking on an expensive and unsuccessful lawsuit seldom sits well with investors. | Again, think about your various constituencies. How will shareholders react when you spend their money on a lawsuit? |
| Impact on employees and prospective employees | F | If there was an employee who didn't know that their rights were being violated, he or she does now. | In any labor issue, it is employees who will have the strongest reaction. If you are involved in labor issues, brief them thoroughly and make sure they understand. |
| Overall | F | It's amazing how clueless corporations can be, but then I say that every month. | They've made their bed, now they must lie in it. Approach lawsuits with great caution and even more preparedness. Think first and foremost of the impact on your constituencies and ignore what the lawyers are advocating. They make their money from going to court. You make yours by defending the company's reputation. |