As Managing Director of a publicly traded company that ran short of cash, I've had to face the focus of creditors, shareholders and, of course, the media. Four years ago my media-production company, Business Essentials, which had been operating successfully for 15 years, merged with some Internet-related businesses. The resulting company, Infosentials Ltd., was listed for three years on the Australian Stock Exchange. In December 2000 we had contracts for several multimillion dollar deals, but the money didn't come in fast enough. So, we chose to go into voluntary administration—the equivalent of receivership in the United States.
Maybe we shouldn't have taken that route, because some of the money started coming in just two weeks later. Meanwhile, the administrators insisted on us sending out letters telling our audiotape and CD subscribers that future programs could not be guaranteed—just as we were seeking subscription renewals. As if that weren't bad enough, the corporate authorities began to investigate whether we were trading while insolvent.
My 46 years in the media—in newspapers, radio and television—didn't help much at first. Obvious jealousies gave certain journalists a wonderful opportunity to score some catch up-points. Some became really ugly in their reporting of my company's crisis, totally misrepresenting the truth. And then, when there was gossip that I would be buying back my original company from the one that crashed, all sorts of innuendos began to circulate. Something had to be done to get the real story told.
Furnish Facts to the Media
Having a good understanding of the workings of the media, and having given many companies advice in recent years on how to behave in a crisis, I figured I was the most suitable person to advise myself. First of all, however serious your crisis may be, you must make yourself available to the media. You can't complain about inaccuracies if you're not there to provide the facts.
Thus, two days before I was due to sign a contract with the Administrators to buy back Business Essentials—perfectly legitimately, with much benefit to the creditors and considerable personal financial risk to me—I contacted one of the more accurate journalists, who was writing for the most widely read business section in a daily newspaper, and offered him an "exclusive." While others might be offended and might not report the event at all, at least this paper would report the story fairly and be widely read.
This strategy worked perfectly. The published story was fair. It didn't make me look totally immoral and unethical, and other journalists left me alone.
Develop Useful Contacts
The lesson here, in terms of crisis management, is that all companies should choose a small number of journalists in key areas and exchange information with them. Get to know them (or their editors) well enough to be able to provide off-the-record briefings, knowing you will not be betrayed. After all, a good reporter needs to maintain contacts. If the press does the wrong thing, you will refuse to cooperate, which is bad business for the publication.
Having a friendly relationship with the media also means you may score some background information of value to you in relation to your industry. In return, you may be able to offer the press useful information about your industry, which will help ensure media accuracy.
You may prefer not to be quoted in some situations. Make that clear at the time, and only enter into such an arrangement if you have established a good relationship with the particular media person. Such relationships can also be beneficial to you in times of crisis, because that journalist will at least have a good understanding of your integrity, your company and your industry.
Take the Initiative
My second suggestion is to be proactive. Some years ago, a major food company's product had infected large numbers of people, particularly children, with salmonella. The product was recalled promptly but, just as quickly, a law firm launched a class-action suit on behalf of the victims. A year later, when judgment against the company was due to be handed down, the company called me for some strategic crisis-management advice. Executives knew they would lose the lawsuit but wanted to know how to handle the situation.
Their regular advisors had told them firmly to stay away from the court and not talk to anyone. Mine was to be a second opinion. I recommended standing outside the courtroom to face the media, instead of ceding the space to the flag-flying legal firm. Indeed, they should seek an interview on the top-rated talk-radio station that afternoon. Figuring out what to say was the easy part. Had the class action not taken place, the company would have compensated the victims immediately, rather than endure tortuous court proceedings and enrich greedy lawyers.
At first, the company executives laughed—then, they consulted their own in-house lawyers, who agreed completely with my proposal. The company proceeded to arrange an interview with the radio station, as well as speaking to the media outside the courthouse. The radio talk-show host, who was expected to side with the victims, agreed with the company, whose spokesperson I had coached the night before. Next morning, the company called to thank me, saying that particular interview was worth millions of dollars to them.
Train the Right Spokesperson
Credit must also go to the company spokesperson, who presented the story very well. And that, of course, is a critical ingredient. In a crisis situation, not only do you need to know exactly what to say, you need to choose the right person to say it publicly. Don't let it be the security guy on the gate who tells the world about the gravity of an oil spill at the refinery.
Once I was asked to help the Corporate Affairs director of a large company who was due to appear on a television current-affairs program, discussing a tricky industrial-relations issue. The company had handled the issue in the only way it could, but the complainant was able to make the situation look very bad. The Corporate Affairs director brought along the head of the Human Resources division, who was in the midst of it all. After a while it became apparent that with coaching, the HR man would do a much better job on TV than the media spokesperson. Their boss, whom I knew quite well, accepted my advice but, he said, by golly, I had better be right. Fortunately, the HR executive came through with flying colors on television, and the company was very pleased with the outcome. A crisis had been averted.
The authorized spokesperson should be experienced enough to be always accessible and never to say "no comment," because that makes your company automatically seem guilty. Even if he or she has to say that information will be available later, there is always something the company can say. After all, TV news crews want only a sound bite.
Know the Points and the Rules
The bottom line in handling the media, particularly in a crisis situation, is to know what two or three points you want to make. Stick firmly to that agenda and be convincing.
In addition, everyone in the company needs to know the rules. If a problem arises, however big or small, the media and interested members of the public need to be put through to an authorized company spokesperson. It's a simple rule but too often forgotten by well-meaning staff who believe they know enough and can help.
Above all, never tell lies. Unless you're a criminal, there's no reason to dodge the truth anyway. If your company has made an honest mistake, admitting it will not only confound the questioner, it will also give you every chance of winning the day.
Honesty, over the years, has certainly paid off for me. When I bought back my original business, I agreed to honor all prepaid subscriptions to various programs. Then I sent subscribers a "rebirth" offer of a bonus for a year's renewal, and a free subscription to another series if they renewed for two years. So far, the response has been about 20 percent, far greater than we anticipated. The company no longer has cash-flow difficulties. And, to my surprise, corporate leaders have committed funds to sponsorships for our programs, assuring our survival.
Business Essentials continues to produce monthly business advice audio programs that are available on audio cassette, CD and, of course, in this day and age, online. Despite modern technology, the convenience of listening in the car is still a great attraction.
The success of Business Essentials over the last 17 years has been the choice of items which provide real bottom line benefits to subscribers. Business Essentials is now an international company producing custom made corporate audio and video programs. An important part of our activities includes advising senior executives how to handle media interviews – preferably before a crisis occurs!
For more information about Business Essentials or to sample our audio and video products online, visit our Web site at www.be.com.au
Michael Schildberger Founder Business Essentials