There's an anonymous bit of wisdom that says raising children is like being pecked to death by ducks.
The same holds true for corporate PR in the shadow of a massive lawsuit or the whiff of scandal. It may not hurt much at first, but it won't leave you alone. Sooner or later,
it makes it hard to stay on your game. These are the slow-burn problems that sting your eyes with smoke, the "Sword of Damocles" numbers that just hang there, casting their
shadows of dread.
How does PR function under such a cloud? It takes a mix of skills, including straight talk, strategic silence and the ability to redirect attention elsewhere forcefully. And
you have to be prepared.
"You need to be looking at what your news hooks are," says Richard Levick, president of Levick Strategic Communications (Washington, D.C.). "When is the next hearing?
When are the depositions? If it is high-profile enough, the cameras are going to cover everything that is a 'moment' in the legal proceedings, and you have to address those
'instant issues.'"
On Aug. 19, a jury slapped pharmaceutical giant Merck with a $253 million "guilty" verdict for a Vioxx-related death - just the first of 4,200 personal-injury lawsuits
filed against the drug manufacturer so far, according to Fortune. That same day, Merck announced plans for an appeal. The next day - a Saturday - the company issued a
strongly worded statement from Kenneth C. Frazier, Merck's senior vice president and general counsel, that said the company acted responsibly, including researching Vioxx prior to
approval in studies with almost 10,000 patients; monitoring the medicine while it was on the market; and then voluntarily withdrawing it when problems arose. In addition, Frazier
said the case against Merck was "fundamentally flawed," and that the jury was allowed to hear testimony that was not based on reliable science.
The response was quick, clean and specific - just how it ought to be when there's breaking news. But what about when an issue hangs in legal limbo or in litigation, as is the
case with Wal-Mart, now facing a class-action sexual-discrimination suit that dates back to 2001 (see PR News, July 19, 2004)? Despite a seemingly endless ordeal,
the retail behemoth remains atop the Delahaye Media Index, an assessment of how news affects the corporate reputations of the 100 largest U.S. companies (see PR
News, Aug. 24).
How has "The House That Sam Built" managed to keep above the muck? By talking, says Mark Weiner, president/CEO of Delahaye. "We see lots of negative coverage from Wal-
Mart but, in all of those critical stories, there is always a Wal-Mart spokesperson present. That means that story can never be totally negative, as long as that spokesperson
stays on message." However, Wal-Mart declined to comment for this story.
As many PR executives have learned, open availability is not easy when addressing a fluid situation. Many times, corporate counsel will opt to say nothing, and PR then follows
suit. It makes sense, in a way: Say nothing, and nothing can be held against you. "This may, at times, be a smart legal maneuver," Levick says, "but it also guarantees that the
opposing side gets the entire story."
It takes teamwork to strike a balance. "Your communications team, your legal team and other important parties, such as government relations and investor relations - they all
have to have a very close working relationship," Levick adds. "Too often, the lawyers - who are a very important part of the team - think they are the most important of the
team. They are supposed to be on the bus. They are not supposed to be driving the bus."
Michael Karpeles, who heads the labor and employment group at Chicago-based law firm Goldberg Kohn, says CEOs must present clear messages of corporate accountability:
"They need to say 'we have always been committed to equal opportunity; we will continue that commitment; we disagree with these allegations; and, if there is an investigation, we
are cooperating.'"
Still, he cautions against allowing PR to act alone on this. "Obviously, you would need to coordinate that message with the people who are handling the lawsuit on behalf of
that company," Karpeles adds. "Those statements can be used against you in a court of law."
To stay absolutely safe, draw all comments directly from existing legal documents, says Don Silver, COO of Boardroom Communications (Plantation, Fla.). "If you are
responding directly from your pleadings, which happen to be public record, you are not going to get yourself into any trouble," he adds.
So the lawyers will play ball, within reason, and you don't have to let them run the show. Now you are free to talk. What do you say? And how?
First, Delahaye's Weiner says, it is vital to keep the PR engine running. Churn out those press releases on financial news, business wins and product developments, for example,
even as the "Ongoing Ugly Situation" unfolds. Pick your media selectively. Silver recalls a situation in which a client faced an ongoing scandal. While three print outlets and a
TV station were covering the story, only the TV reporter was following it in any depth. When the firm decided to speak, it went to the TV reporter first, knowing he would give the
story the fairest and the most accurate treatment.
"If the other media jump in on the second day, they typically will use that first reporter's story as the baseline, which means that everybody is going to be more accurate in
the facts," Silver says. "That's especially helpful in a case where the story might be very complex. Then you want it to start with someone who is knowledgeable and who has put in
the effort to understand the issue."
This can be especially valuable when corporate PR decides to fight fire with same. Levick, for example, once opted to squelch an Ongoing Ugly by leaking some dirt about the
attacker. He didn't want it to come from his office, though, so he leaked it to a reporter in Jamaica. From there, the story was picked up by the Canadian press, then by the
British financial press and, finally, it appeared in the Persian Gulf, where the trouble began.
Finally, if the problem persists - and if it is starting to erode the firm's reputation - it may be time for PR to go a different route: advertising. Yes, we know that PR and
advertising are separate legs of the marketing stool, but Weiner makes a compelling case. He says PR can bring its special skills to bear in paid media, using ads to tell a story
and to enhance the message with third-party validation.
Contacts: Michael Karpeles, 312.201.3910, [email protected]; Richard S. Levick, 202.973.1302, [email protected]; Don Silver, 954.370.8999, [email protected]; Mark Weiner, 203.899.1600,
[email protected]
Lying Low Or Laying Down?
The most recent Delahaye Media Index, released in July, shows that Wal-Mart remains one of the most highly regarded big businesses in the country, despite ongoing allegations
of sexual discrimination, unfair labor practices and other employment issues.
Has PR helped or hindered Wal-Mart in its ability to stay strong in the public eye? Sometimes it's hard to tell, considering the retail giant's mixed bag of PR
initiatives:
- This year, the company launched
http://www.walmartfacts.com in an effort to respond to a number of allegations. The information here likely will not sway detractors, but
it does help the company frame the debate on its own terms. - Last January, the company went on the offensive, with CEO Lee Scott appearing on ABC's "Good Morning America." Full-page ads ran in more than 100 major metropolitan
newspapers, claiming the company pays higher wages and offers better benefits than many of its competitors. "For too long, others have had free rein to say things about our
company that just aren't true," Scott said in a statement released soon after. "Our associates are tired of it, and we've decided it's time to draw our own line in the
sand."
Yet, the company's PR department may have undermined such efforts. In July 2004, controversy swirled around a store opening in upstate New York. The Central New York Business
Journal excoriated Wal-Mart PR: "Wal-Mart's public relations office referred reporters to a spokeswoman who is on vacation this week. That spokeswoman's voicemail referred
reporters to the company's community affairs office. Employees there referred reporters back to the public relations office, which did not return calls."
Is that publication going to give Wal-Mart a fair shake the next time around? Don't bet on it.