Facebook and privacy - how will it impact on the IPO?

It would appear that there is a growing concern over recent Facebook changes which in turn raises more general worries over Facebook's approach to privacy.  Certainly speaking to my students today, all active Facebook users (I am not a Facebook user), there is growing concern about the new changes.   Next year's likely IPO for the company must raise concerns that the company will seek to commercialise too quickly, something which Sir Martin Sorrell has recently alluded to at the recent Royal Television Society Cambridge conference.

Siemens shows awareness of societal pressures

The decision by Siemens to withdraw from the supply of nuclear power stations is a particularly interesting consequence of what Jensen might term "organisational legitimacy and identity in the public sphere" in her important 2001 paper on the application of the public sphere to public relations practice.   According to the announcement, Siemens is withdrawing from the supply of nuclear power plants responding to the "clear positioning of German society and politics for a pullout from nuclear energy".  

In other words it is not responding to market conditions but to societal pressure.  In most markets, Siemens supply of nuclear systems would be entirely socially acceptable, particularly in the current environment with jobs such a key focus for most countries but the announcement from Siemens suggests that Germany's focus on alternative energy makes this market focus no longer acceptable from such a major German supplier.  It is a very different decision to, for example, the reversal of Shell's Piper Alpha disposal which was taken in a crisis PR situation facing widespread public hostility.  This decision appears to be the consequence of what might be called rational discourse in the public sphere and Siemens reading of the situation as a reflective "economically successful, legal and responsible company".

What will the Siemens' shareholders think of the decision?

Spills and Spin

A book we are planning to use alongside other works on our MA PR Corporate Communications course (within the MA PR programme) this coming year is Tom Bergin's Spills and Spin: The inside story of BP.  He has been an oil analyst with Reuters for a number of years so brings a strong understanding of the sector to his coverage of BP's problems.  Incidentally, today's Sunday Times reminds how BP is still struggling to move forward and one suspects to survive over the next three years on its own (would the UK government allow a takeover?).
(http://www.oilspillnews.net/wp-content/uploads/2011/01/1295067618-47.jpg)

I am only half way through but the book is really strong on exploring the culture,  organisation and personalities of BP as well as understanding the role of the communications, media and financial markets.  So it is an ideal book alongside the course before we even get to sessions on crisis PR.

The book is strong on setting the context for the Gulf accident.  It was well known that BP has had problems with building a strong safety culture for many years (way before the Texas refinery disaster in 2005) which does raise the question how could the main board directors have allowed both Browne and then Hayward to downgrade the minimal safety culture which was in place, even further by signing off so many cutbacks.

One of the issues which the BP saga throws up for corporate communications teams with major companies is what do you do if you sense your senior management is not managing the company in a prudent fashion.  To have two major accidents on American soil (Texas refinery) and US waters (Gulf rig) in less than five years as BP did, suggests major flaws in the organisation.  Bergin also highlights that the macho culture under Hayward (unlike Browne) led to a number of senior women leaving BP - an early warning sign?

As some commentators have pointed out, it is strange that the two bosses critically involved in BP have moved on from BP with apparent ease.   Lord Browne went on to advise the government on the future of universities and the adoption of market pricing (hopefully BP's trajectory is not an indicator of future problems in academia); while Hayward is set to make millions with Nat Rothschild in a new energy venture.  It turns out that both appear to have left all the problems behind with BP; while their own personal reputations seems relatively unscathed.  In complete contrast with Fred Godwin whose reputation has continued to decline while RBS' would appear to have strengthened.   Something of a mystery.

Command and control model of PR takes another hit with fall of DSK

The DSK affair in New York has led to much soul searching in the French media.  In particular, about their  attitude towards DSK and his well-known attitude to women but more generally about lack of exposure of what some French female commentators are saying was a macho culture in the French political class generally.

At the same time, the French media have turned on the PR team behind Dominic Strauss-Kahn and have explored in detail their tactics in managing the DSK brand - a very powerful one in French politics which could have well led to him becoming the next French President before the brand and his career came to a grinding halt in the Sofitel hotel in New York.  If the reports are accurate, then the model of PR adopted by his team was a classic example of command and control, similar to the Campbell/Blair model in the early years of New Labour.

DSK was advised by a small team of top PR advisers operating out of one of the top French and international communications operations, Euro-RSCG in Paris.  The same people are also advisors to many of leading French organisations and individuals.  Of course in the French language, the term PR or "relations publique" is hardly ever used; it is communications or com for short reflecting the strong influence of marketing and advertising in the development of PR in the French market.

The history of "command and control" as a PR tactic in any country is it seems reassuringly effective in the early days but when it fails, as fail it will, it tends to crash with spectacular results.  In an era of social media, organisations, leaders and brands need to understand that the give and take of comments, compliments and criticisms is part of the process of operating in a global market.  It is part of the "licence to operate" which any politician and organisation needs to gain from what is seen to be an equitable or in Grunigian terms a symmetrical relationship with stakeholders and society.   PR practitioners need to encourage organisations to participate in this process not to try to hide away or control the flow of communications as in the case of DSK and the PR team behind his rise and fall.

Edelman comes on board to help Murdoch

Having just completed my blog yesterday on the lack of touch shown by News Corporation and the Murdoch family in the crisis facing them and I see that Edelman have been appointed to assist.  A very good move as they are experienced practitioners and understand that modern organisations have to build a constituency of support across stakeholders.   They cannot rely on a shareholder only model for operations and communications which the Murdoch family have to date adopted in extremis. 

Already there seems a better touch to the responses by the family not least agreeing to appear before the House of Commons committee next week.  Rupert Murdoch's interview with the Wall Street Journal was ill-judged both in choice of media (they should seek a non-Murdoch owned media) and in comments and the Edelman relationship with Rupert is going to be a fascinating to observe to see if he will take advice.   The resignation announced this morning of Rebekah Brooks only helps.  Certainly it is going to be an interesting case study in crisis and corporate communications over the coming weeks and months.

Murdoch family's heritage hinders understanding of role of communications in time of crisis

The inability of the Murdoch family and senior management of News Corporation and News International to engage publicly with the forces at play which are tapping at the very foundations of the organisation betrays all too clearly the way they have traditionally done business in the past.   They have prospered in a world of meetings behind closed doors; of private meetings to brief key stakeholders on the agendas which were important to the family and the organisation; of sympathetic treatment by their own media to communicate key agendas.  All could be termed the traditional approach to public relations based on controlling communications and agendas and in their case, actually controlling media.   There is no sense of them understanding the role of public relations in a modern democracy, building a constituency of support through dialogue with wider stakeholders which most organisations have started to learn and adopt.  

Why is nobody speaking for the Murdochs; or why are the the family not themselves speaking out?  They have some of the best PR advice through their son-in-law, Matthew Freud but their continued silence speaks of their uncertainty and lack of understanding of these difficult times.   The only forms of communication - and unintended - currently from the  Murdoch family are hurried snaps taken by the paparazzi of the family and senior executives behind tinted car windows as they rush from one "fortress" or underground carpark to another.  Images of the bunker provide a powerful narrative for other media and for the general public.

(Daily Telegraph.)

The family need to communicate in these difficult times as their continued silence must be starting to having significant damage on the morale of people working for the company; only heightened by Gordon Brown's extraordinary outburst in Parliament yesterday where he called News International a "criminal media nexus".  Here is a former Prime Minister calling a major global corporation a criminal enterprise - has this ever happened before in Parliament?  I doubt it.  Comments like this will be noted in the USA and in global capital markets and will be a question mark against the organisation and its reputation.

Crisis PR models suggest that the Murdochs probably thought that phone hacking was an issue not a developing crisis and so did not respond adequately when they had the time.  Their initial response would also appear to have involved a cover-up.   Timothy Coombs a leading academic in the field of crisis communications also highlights that crises which are due to organisational "misdeeds" such as cover-ups have the most severe consequences.  

Equally crisis communications models would also indicate that today's crisis can become a different crisis tomorrow.   I think it is increasingly likely that the Murdoch family will be required to step back from day to day management in their media operations under a "fit and proper" ruling and become passive investors with much smaller stakes than they have at present both in the UK and USA.  That is the much larger crisis which they may face and how they respond now will determine that very potential outcome in two or three years time.

Reputation agendas and research

Came across the Ipsos-Mori Reputation Research Council which includes the views of 38 Directors of PR and Communications for leading UK companies primarily.   The latest survey and feedback from members is included.  Data suggests that a low priority is given to EU elected and departmental officials (p.25) in terms of both who the CEO listens to and as a stakeholder group which the organisations regards as important in terms of  "licence to operate".  This is surprising for such large companies and I wonder if it would be echoed with a more pan-European communications network?

While I hope to attend the Oxford University Said Business School's Reputation Symposium later this summer. Some interesting working papers with PR relevance are also available on the site or via the author.