Reduce, Research and Reckon with Risk

Pat Gaudin FCIPR

Chartered Practitioner

December 2011

Relationships

PR is about building and maintaining relationships

From your own experience what is key to successful relationships?

Trust

reliability, confidence, integrity, honesty, trustworthy

Being ethical and professional is core to having a good reputation

Gregory 2009

A Romp

Trust CSR Risk News media Reputation Relationships

Trust

Trust is the cement in the relationship between institutions and civil society. When trust breaks down, civil society either withdraws from participation or expresses protest outside the mainstream channels of participation Greenwood (2003:49)

Trust

The pursuit of ever more perfect accountability provides citizens and consumers, patients and parents with much more information, more comparisons and more complaints systems - but it also builds a culture of suspicion, low morale and may ultimately lead to professional cynicism –

and then we would have grounds for mistrust

Onora O’Neill, BBC Reith Lectures, 2002

Reference to mistrust of government information

Reference to loss of trust in police

“Trust enhances police legitimacy”

2011 Edelman Trust Barometer

The lead of the story must be that trust is transformed. In the wake of the financial market meltdown at the end of 2008, we have gone through a series of corporate crises during 2010 - from oil spills to product recalls affecting the leading enterprises in five sectors to the near-bankruptcy of five nations in the EU.

We also found unprecedented scepticism, a need to hear, see or watch news as many as ten times before achieving belief, plus an increased reliance on those with credentials and expertise.

2011 Trust Barometer

Top ten countries by GDP

Technology firmly on top Finance sector at bottom

Responses 6-9 on 1-9 scale; 9=highest; Informed publics ages 25 to 64

Sources 2010

Sources 2011

Credibility

Developed markets more distrustful of the media

Responses 6-9 on 1-9 scale; 9=highest; Informed publics ages 25 to 64; Top 10 GDP countries

What matters for corporate reputation? Quality, transparency, trust, employee welfare

Responses 8-9 on 1-9 scale; 9=highest; Informed publics ages 25 to 64

Trust protects reputation

Informed publics ages 25 to 64

The Edelman Trust Barometer in retrospect

Building Trust

Corporate social responsibility Hobbes, Rousseau and Rawls Quakers Education Communication

Benchmark

Company position

Philanthropy

Enlightened self interest

Business basics – law health and safety

The place of CSR

Company missionObjectives/priorities

Community needs andexpectations

Employee developmentinterests

Matrix

Core values Business objectives Key publics Employee support

Corporate Social Responsibility

A concern with these issues can actually lead to improved performance Crowther – Social environmental accounting September 2000

Sustainable companies, ie companies integrating economic aspects with environmental, ethical and social – yield a larger return than conventionally managed companies Holmstrom, S The Reflective Paradigm – Masters thesis 2002

The Co-operative Bank

Why are you our customers? What else do you want? (30,000) Human Rights – 90% Armaments – 87% Animal exploitation – 80% Environmental damage – 70% Fur trade 66%

Buddha

As the bee collects nectar and departs without injuring the flower, its colour or its scent, so let the sage dwell in his village

• Crises very often become trust crises• There is danger in the possibility of

jumping-over of trust losses to the next level

Trust losses in individual actors/agentsGunter Bentele Bledcom 2009

Trust losses in organisations, products, brands, services

Trust losses in smaller social systems (health, finance, pensions, etc.)

Trust losses in larger social systems (economy, democracy as a political system, etc.)

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A Theory of Public Trust

Single Issue Campaigners’ Advantages

Clear vision Simple objectives Controversial - therefore newsworthy Attract celebrity

Is this correct?

‘balance of power has shifted too far and that companies need to wrest back control of their reputations’

Or have we squandered it with self-centered behaviour?

Andrew Griffin – New Strategies for Reputation Management in R and L p14

Calculated risk

Defining Risk

How do you define risk in your own organisation?

What are the main risk areas?

Where do communications/reputation fit in?

How do you respond?

Risk

A measure of the adverse effect of an issue

Assessing and communicating the possible hazards associated

Relative to the safeguards and benefits Helps us as consumers to make

choices about our health and safety and the protection of the environment

Regester and Larkin 2008:21

Auto responses to risk

Experiment Fight Flight Play dead Freeze Renn 2010

Risk Issues

Assessing risks in advance

Influencing decisions

Economic System

Channeling effectively

Pareto principle Distributive discourse

(bargaining)

Maximizing utility/ efficiency Social System

Sustaining relationships

Mutual understanding

 Therapeutic discourse

 Empathy/fairness

Evidence/effectiveness

Collectively binding norms/legitimacy

Expert System

 

Sustaining meaning

Research and peer review

 Cognitive and

interpretive discourse

Political System

Sustaining order

Compatibility with universal or positive principles

 Normative discourse

Public’s involvement

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DecidingUnderstanding

Pre-assessment

ManagementCommunication

Characterisation and evaluation

Appraisal

IRGC’s Risk governance framework

Who needs to do what, when?

Who needs to know what, when?

Is the risk tolerable,

acceptable or unacceptable?

Getting a broad picture

of the risk

The knowledge needed for

judgements and decisions

Dialogue

A conversation without sides 40,000 untested chemicals Public anxiety Uncertainty Negotiation

From communication to public involvement

Information needed for decision Our brains are wired to forget Allow for reflection and consideration Inclusion – all policy options and

scenarios Preferences

Objectives of Risk-Benefit Communication

Enlightenment: Making people able to understand risks and benefits (and their interactions)

Behavioral changes: Making people aware of potential risks and benefits help them to make the right choices

Trust building: Assisting risk management agencies to generate and sustain trust

Conflict resolution: Assisting risk managers to involve key publics and affected parties to take part in the risk-benefit evaluation

Renn 2010

Attitudes

Estimating – over for sensation, under for every day

Nature and nurture Benefit and trust Source Emotion

Regester and Larkin (2009:22)

Context

Newly emerging Degree of existing New perception

Defining the public relations problem

Situation analysis

Defining the issue

PEST(LE) Political - Economic – Social – Technical

(Legal – Environmental)

Gregory, A

Risk perception

Emerging danger – randomness threat Creeping danger – long delay Yes – take the risk No – no benefits seen Maybe – want to trust but no proof Arbitrary Renn, O

Some Major Insights

Risk-benefit communication needs to address:

Difference between risk and potential hazard Difference between random event and faulty behavior The process of management decision making The trade-offs and value conflicts when making

management decisions (risk-benefit-balancing) The meaning of standards and the respective protective

goal behind them

Renn, O

Trust and credibility cannot be “produced” or “manufactured” but only earned in terms of performance and effective communication

Renn, O

Communication

Urgency - conflict Legitimate - research and listen Public support Misunderstandings create crises Shared futures - mutual mindset Respect social commons Build significance - strengthen

relationships

Journalists

Intellectually shallow, morally vacuous and socially privileged.

When politicians complain about journalists it’s like junkies complaining about their dealers. They both need each other.

Matthew Taylor - Fabian New Year Conference 2003

UK News Media

outstanding reporting and accurate writing mingle with editing and reporting that smears, sneers and jeers; names, shames and blames

Onora O’Neill, BBC Reith Lectures, 2002

According to Jock Young

There is, institutionalised into the media the need to create moral panics and issues that will seize the imagination of the public.

Images of Deviancy ed. S. Cohen Penguin 1971

Vital to us - hug a hack!

Understand what they want Ensure you provide it all plus some Be aware of the needs of the news

media at all times Never say no comment!

Hackney Council is reviewing its emergency comms planning in the wake of the summer riots as the London 2012

Olympics approaches

Hackney’s head of media and external

relations Polly Rance said that her comms

department was prepared for the riots

issue to take hold in the media again, in

particular during milestones such as

‘one year on’ or during the Olympic Games.

PR Week 18 October

What is Reputation?

Henry Ford - "You can't build a reputation on what you are going to do."

Reputation is the result of an organisation's former actions, not its promises.

Reputation

Research in 2000 - definitely affected by bad behaviour, low morale etc

Little or not at all affected by business as usual or ‘good news’ stories

Most ‘relationships’ are built with those who have no consequence

PR must be at a the leadership level Verčič, D -Trust in organisations: a study of the relations between media coverage,

public perceptions and profitability - unpublished doctoral dissertation 2000

Reputation

Out of step with messages = inertia In line = energy PR is the profession best suited to the

business of building loyalty and advocacy CBI

Reputation has grown to represent 70% of balance sheet assets - DTI

Returning to Relationships

Trust Reputation Relationships

Relationships’ outcomes

Trust (Chia:2005, Rhee:2007)

Increased media coverage (Downes: 1998, Jo and Kim:2004)

Decreased negative media coverage (Downes:1998, Jo and Kim:2004)

Success with political achievements (Kovacs:2003 Wise:2007)

Reduced Risks!

Thank You

Bibliography

Gregory A in Exploring Public Relations; Tench and Yeomans ed; 2nd edition p 284 (2009)

Greenwood, J in New Activism and the Corporate Response, Palgrave Macmillan 2003

Onora O’Neill, BBC Reith Lectures, 2002 Easton Mark 5 December 2011 last updated at 15:55: Were the riots

caused by bad manners? BBC news http://www.bbc.co.uk/news/uk-16035543 accessed 6.12.11

Edelman Trust Barometer (2010/2011) Crowther – Social environmental accounting September 2000 Holmstrom, S The Reflective Paradigm – Masters thesis 2002 Dhammapada The Wisdom of Buddha, translated by F Max Muller:

Dover Publications 2000 Bentele, G Bledcom paper 2009 Regester, M and Larkin, J Risk, Issues and Crisis Management,

Kogan Page 2008

Bibliography

Renn, O. Euprera congress, University of Jyväskylaä, Finland 2010 Isaacs, Dialogue - the art of thinking together, Currency Doubleday

1999 Wolstenholme, S Growth of social marketing, PR and Global Trends -

Tritonic 2007 Tench & Yeomans, Exploring Public Relations, Pearson 2006 Matthew Taylor - Fabian New Year Conference 2003 S. Cohen - Images of Deviancy Penguin 1971 Verčič, D -Trust in organisations: a study of the relations between

media coverage, public perceptions and profitability - unpublished doctoral dissertation 2000

Chia:2005, Rhee: 2007, Downes: 1998, Jo and Kim:200, Downes:1998, Jo and Kim:2004, Kovacs:2003 Wise:2007 in PR Digest,, Pearson 2009