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  1. Law
December 17, 2008updated 01 Feb 2016 12:22pm

Be Cool

By Christopher Silvester

Christopher Silvester on the icy-calm business of crisis management

For wealthy and powerful individuals, a crisis means negative media exposure that, unless addressed, has the potential to become the first line in their obituaries. ‘Crisis management is largely a media issue,’ says Michael Wolff, the Vanity Fair columnist, who has written about the media crises of several prominent political and business figures.

‘It’s about perception and message and structure. It’s about how you change the story, how you mitigate the story, and how you beg for leniency. Ultimately, it’s about how to manage the asset which is your personal brand – what we used to call reputation.’

Diana Soltmann, the CEO of Flagship Consulting in London, has been involved with crisis management for 20 years and says her company has around 30 clients who require this kind of attention. ‘It’s a different kind of PR,’ she explains. ‘With crisis management, it’s not about promotion but damage control. It’s about coming at you.’

Any criminal investigation, any corporate situation where you get fired in a public way, high-profile divorces, family feuds, confrontations with financial regulatory authorities – all are grist to the media mill. ‘Family feuds, or fights within a family for control of a business, are among the worst crises I’ve had to deal with’, reflects Howard Rubinstein, the doyen of Manhattan PRs.

Ken Frydman, a partner in Source Communications, another Manhattan firm, is less dramatic than some of his fellow professionals. ‘I prefer to call it issue management,’ he says. ‘Crisis is a hyperbolic word. What people think is a crisis is often a problem that can be reduced with calm strategic and tactical thought. Let’s put things in perspective.’

Frydman was campaign press secretary in Rudy Giuliani’s winning mayoral campaign 1992-93, and his clients range from Giuliani Partners to investment firms to personalities such as Donald Trump. ‘Giuliani has a reputation for always being the calmest person in the room. That’s what I try to be. Consultants tend to overstate the enormity of the problem. Stop, listen, and think. Then take control of the story.’

Wolff believes that there is a whole school of thought about this which goes back to Watergate – really the beginning of crisis management PR. ‘It’s the notion that the cover-up will kill you every time, so you have to go out there and confess to everything. The point is that there is a playbook or of the various versions of the playbook.

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‘It is very, very procedural – so procedural that you can practically compare it to a legal defence. There are poses you have to strike, deals you have to make, there is plea-bargaining to do. It’s a also a question of who gets to tell the story. Spin doctors, like Karl Rove and Alistair Campbell, get out in front of the story, they move it on. Sometimes they bury bad news.’

Tycoons or celebrities shouldn’t presume that their superior status makes them immune from criticism. ‘If anything your wealth and position makes you more vulnerable, not less vulnerable,’ says Rubinstein.

Piers Pottinger, the co-founder (with Lord Bell) of Mayfair-based Chime Communications, agrees. ‘If you are even moderately well off, that’s going to be turned against you by the media,’ he notes. ‘Those with a lot of money are inevitably going to be targets for jealous people.’

For example, when Martha Stewart, the billionaire domestic-style maven, was charged with obstructing justice and lying to investigators about a well-timed sale of stock, there was a media feeding frenzy.

‘The nature of the culture is to tear people down and you couldn’t get a better target than Martha Stewart,’ says Dan Klores, CEO of Dan Klores Communications, whose clients have included other scandal-beset public figures such as Mike Tyson and Lizzie Grubman.

‘Martha’s advisors approached it in peripheral ways – through her corporate entity and her relationship to Wall Street. Both affected the brand, because they were inextricably linked.’ Indeed, when the individual and the brand are one and the same (as with Richard Branson and Virgin), the threat is infinitely greater.

Klores considers the crisis manager to be as important as the attorney. He should have confidence and experience, and he shouldn’t be afraid to disagree. He should have stature. ‘You want someone who doesn’t need to kow-tow to you,’ says Pottinger. ‘You don’t want some whippersnapper who’s afraid to offend you. Don’t let your ego take over from your intelligence.’

Rubinstein says he doesn’t get blinded by celebrity status or wealth or power and knows how to administer string medicine. ‘Just as you would never be your own lawyer, you must never be your own crisis manager. Our job is to defend you in the court of public opinion. Let us do our jobs. If you’re not going to listen to me or at least brook dissent, then what’s the point?’ Soltmann does not see this as a problem: ‘Rich individuals and business men may have huge egos, but they are well aware of the power of the press and how it can damage their reputation.’

All interviewees agree that lying is not an option. ‘Tell the truth at all times,’ says Klores. This is the first rule observed by Frydman as well: ‘Never lie, never obfuscate. Spinning is one thing: getting your own point of view across without lying. You’re not really serving the client’s interests by lying.’

Rubinstein warns against ‘spinning so charmingly that it’s a lie’. Soltmann insists that her job is to know everything her client knows. ‘Honesty and being completely open with your adviser is essential,’ she says. Pottinger concurs: ‘The victim must tell his advisors the whole truth, at once and openly. It’s far better to come clean with your advisors, otherwise they might give you advice that will make things worse.

‘If I lied on behalf of my clients, I wouldn’t last long. There’s no point in lying. If you can’t say anything, don’t say anything. Admit it all up front, very quickly, and kill the story. People get more credit from the media for being honest about their mistakes than for being successful.’

Frydman says he can tell on the first day what the story is going to look like and how to confine it to a one-day story. But others suggest that it is of paramount importance to avoid squabbling with the media. ‘Don’t fight with the reporters; don’t be cute with them,’ says Rubinstein.

Klores endorses this: ‘I try to say everything on the record, for attribution,’ he says. ‘I don’t want to get cute. If you’re out in front of it, your demeanour is crucially important. If you’re adversarial and you don’t need to be, it’s going to hurt your client. At the same time, you’re only going to win for your client if you take it personally.’

One of the key things in crisis management, believes Piers Pottinger, is buying time: ‘But remember the oldest adage in the book: you can run but you can’t hide. You can go abroad until it all dies down – what might now be called the Kate Moss strategy – but you’ve got to come back some time.

The trouble is that running away is almost an admission of guilt.’ (Moss’ PR strategy of showing contrition, at the same time as staying away from the British tabloids, has been brilliantly managed by her modelling agency, Storm, which has almost doubled the value of her contracts with various brands).

‘On Day One,’ Pottinger continues, ‘you must answer the following question: who, apart from you as an individual, is this story going to hurt – your employer or your employeea, your business or investment, your family?

‘It’s better to pre-warn family and relations if it is likely that a journalist will call them. You have to pray your friends are going to say nothing. If you’re at home, switch on the answering machine and screen every call. Never speak to a journalist unless you have to, or only by prior arrangement. Don’t think you can outwit the press. Nor is there any point in making an enemy of a journalist. It almost always backfires.

‘Friends and allies can be very helpful, however. Remember, PR is ultimately about one thing only: third-party endorsement. Be realistic about what you might achieve. If you get seventy per cent of coverage that is positive, that’s a 100 per cent result.’

Apart from dodging media brickbats there is also a caring aspect to the crisis manager’s role. ‘My functions revolve around the legal strategy and psychological aspects of the event,’ says Klores. ‘People feel their lives and careers drifting away. Their anxiety and their fear is something you need to deal with as well. You have to protect them from themselves.’

Rubinstein, too, see his role as pastoral as well as one of tactical counsel. ‘Some of the wealthiest and most powerful people aren’t the most self-confident,’ he says. ‘You need for them to open up to you: to reveal their fear of losing what they have or of their family disowning them. I analyse the psychology of a crisis, not just the content.’

Rubinstein often recommends having a close-knit crisis team set up in advance of any crisis, usually involving a lawyer, whether inside or outside of counsel; a professional PR advisor; an executive, a CFO perhaps. ‘The first of instinct is to act quickly and get off the hook,’ he says. ‘That’s a bad instinct. Instead, you should gather the facts, talk to attorneys, have one spokesperson, not three or four, control the media flow.’

Pottinger adds: ‘You will need three kinds of adviser: a genuine friend you can trust, not a yes man; a PR consultant who will guide you in how to deal with the media; and possibly a lawyer.’

There is no substitute for being prepared, according to Flagship Consulting’s Soltmann: ‘You need sophisticated strategies and procedures in place for people to follow,’ she explains. ‘There is no time in a crisis. Everything happens so quickly. What we do is put a plan together , run a scenario pertinent to the situation, and run it in real time with role-play, so that we can experience the stress, the pressure, the time constraints, and identify the issues. It takes a day and it’s like a fire drill. That way staff know what’s happening. We like to establish separate control centres: one to handle the press, especially in the first couple of days; one to handle strategy; and another to work on disaster recovery.’

Rubinstein Associates also play-acts crisis for clients. ‘We have a procedure in place for who will take the calls,’ says Rubinstein. ‘Don’t allow multiple spokespersons. Make sure you have all contact info for anyone who might be involved in a crisis so that you can contact them day or night, at weekends, on holidays. We also do media training for the spokesperson: how to give a TV interview, how to be direct, or to avoid giving a direct answer if you don’t have one. A bunker mentality in a crisis is the wrong mentality.’

When a crisis arises, switchboards are jammed. ‘Reception staff are often very vulnerable,’ says Soltmann. They may not be able to communicate with someone at sevior level. The remedy can be technological: dedicated  phone lines, panic buttons. We like our clients to use codes: code red, code orange, etc. Code red on your Blackberry means get out that meeting fast, even if it’s with the Queen, the president, or the Pope.’

The Martha Stewart crisis required constant monitoring. ‘By creating doubt about the charges,’ suggests Frydman, ‘by suggesting that they were overwrought, her advisers engendered empathy: where’s the crime? They were in there fighting, taking it personally. They never stopped dealing with the story. At one stage there was even a story about her taking bicycle rides in Hamptons. No-one had ever seen her taking a bike ride till then… And I live in the Hamptons.’

At one point, one of Stewart’s key people told Wolff that the only way her company (Martha Stewart Living Omnimedia, Inc.) would get past this crisis was if Martha goes to jail. ‘This is a genuine perspective in crisis management,’ says Wolff. ‘If the company didn’t survive, her fortune would be lost. For the company to survive she had to do jail time.’ In the end, the company’s stock more than doubled while Martha was inside.

Take another case where jail time was deemed necessary, namely the incident at the aptly named Conscience Point Inn in Southampton. Lizzie Grubman, the daughter of a prominent music industry attorney and herself a thriving New York entertainment PR, reversed her vehicle into a crowd of revellers, causing serious injuries, then left the scene, giving rise to suspicion that she had been under the influence of alcohol or drugs or both.

Rather than risk being convicted of felonies for second-degree assault and leaving the scene, which would have meant being incarcerated upstate, a long from Manhattan and the Hamptons, Grubman copped a plea on lesser charges of vehicular assault and DWI (driving while intoxicated).

In August 2002, as part of a plea agreement, Grubman received a 60-day prison term, to be served at the Suffolk County Correctional Facility, near to the scene of her crime. According to an article in New York magazine, ‘although some her advisors believed she could win an acquittal if her case went to trial, she wanted a deal that would include jail time. She thought that, if she didn’t serve a sentence, the story would always be: “Rich girl buys her way out of trouble”. She knew the people wanted to see her punished.

She served 38 days in all, followed by a period of probation. She also settled 16 civil cases that had been brought against her. ‘In the beginning it was handled poorly,’ says Wolff. ‘But then they got control of it. That’s one of the things that happens. She confessed to some of the charges. The balloney part of this is getting on the right side of the sentimental line.’

But, as New York magazine has observed, ‘the final irony of Conscience Point is that the notoriety from the incident, far from ruining her, has actually given her a career boost – and a fresh chance to spin her story’. MTV subsequently commissioned a reality TV series about her agency called PoweR Girls.

‘Comeback strategies have to be 100 per cent credible,’ cautions Pottinger. ‘The other option, if you can afford it, is to take your business out of the limelight, even if it goes against your ego.’

Rubinstein believes that a person’s good name can be restored in most instances, ‘with the exception of highly immoral actions – murder, major fraud, child molestation’.

The negative fallout from high-profile divorces or litigation and minor scandals can largely be overcome. ‘You must be contrite, not totally defensive,’ Rubinstein continues. ‘The public is willing to forgive and there’s a lot of forgetfulness. A civic or charitable endeavour, modestly publicised, can do wonders. Also, it can help clients recover their feelings or self-worth.’

Klores echoes these sentiments. ‘We’re in America,’ he says, ‘and we like a good story, with its ups and downs. Henry Ford said Americans forget – though no-one will ever forget OJ Simpson.

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