CHIEF BRODY, JAWS

The prospective client - let's call the company Socrates - called us in to meet its crisis management team. We had been under the impression that the objective of the meeting was to listen to Socrates tell us its side of the story, why its bestselling product was under attack. Then, presumably, we'd give Socrates our initial ideas on how to defuse the attack.

One look at the dynamics of the room, however, and we knew we had landed smack dab in the middle of what we sarcastically call a "beauty contest." Beauty contests are presentations that are held ostensibly to hear out the ideas and credentials of the potential consultants available for hire. Sounds legitimate, right? The real purpose of a beauty contest in many high-stakes PR assignments is to identify the consultant who is least likely to get anyone sitting at the table fired.

A company in crisis is often no longer a company at all: It's a collection of individuals each of whom is looking for personal cover. Truth be told, the company's welfare was low on the priority list of the individuals in this room.

This probably seems like a cynical assessment.

Welcome to the blunt talk of contemporary damage-control, which requires a sober appreciation of both human nature and the tides of Fortune. After all, crisis management is storytelling, and a good story begins by recognizing the omens set out for us by the flawed human beings and institutions in the narrative. When Jaws' Chief Brody observed that Quint's crew needed a bigger boat, he was doing more than making an observation, he was making a strategic assessment of both the practical tools that would be needed to catch the great shark and inquiring about the resolve of the shark-hunting team.

Resolve must be anchored in a realistic appreciation of the challenges-at-hand. Ironically, in an age of crisis, the business culture is living in a "Spintopia" - an environment in which business schools, consultants and pundits dispense Mother Goose aphorisms about crisis management that contradict what real-world life experience teaches. The advice crisis consultants give is often designed to benefit the consultant, not the client.

We're in the crisis management business. A crisis manager's job is to make bad news go away. We are the trauma surgeons of public relations. Corporate scandals, high-profile litigation product safety allegations and recalls, boycotts, brand smears, government investigations and prosecutions - these unwanted events are our daily challenges.

Conventional public relations is enamored with "reputation management," "empowerment," "trust," "the message," and other guru-driven happy talk that serves little purpose other than to give people in very tough situations the illusion of control.

"Martha Stewart just needs to apologize," a pundit says on CNN. "If Nixon had just said right away, 'I screwed up,' there would have been no Watergate scandal," a political science professor speculates. "If Coca-Cola had just recalled their product right away, that whole Belgian mess wouldn't have happened," a business school case-study lecturer asserts. "We've got to tell 'em all the good things your products do," a public relations account executive assures her polluting client in a new business pitch, adding with a sparkle, "Remember, a crisis is an opportunity to get your message out!"

Crisis management is the enterprise of telling ugly truths. Ideally, it is the pursuit of redemption in the marketplace. When one has done wrong, repentance is required. When one has been wronged, a vigorous defense must be mounted.


Even before the meeting at Socrates formally began, our team, drawing on eighty collective years in the high-stakes communications business, saw four telltale signs of crisis management doom:

1. The Chief Executive Officer was absent.

In times of crisis, the chief executive officer must be the chief crisis officer, or, if not the CEO, the business unit chief who has the authority to make fundamental decisions. In the gathering at Socrates, the real powers to resolve the crisis were not in this room.

2. There were too many people at the meeting.

Effective crisis management teams are small. While they may indeed collect input from a variety of sources, they are not meant to be New Age esteem-building entities where everybody has a voice and gets to feel special. That so many of Socrates' players were ready to memorialize the meeting's proceedings on their laptops was a blaring warning sign. It's a safe bet that these jottings would wind up in court or on the front page of the Wall Street Journal.

Someone mentioned the "Tylenol case."

While there are many admirable features of the Tylenol case (which will be explored in depth later), its invocation has become a mantra for managers desperate for a guaranteed happy ending. In reality, the Socrates crisis has little in common with the Tylenol case.

4. Someone recommended more research, a plan and the formation of a committee.

Here's the dirty little secret of the procrastinators: it is not so much that they oppose action per se, it's that they neither know what to do, nor have any tolerance for risk of any type. Memo anyone?

In the crisis management business, we don't turn away work on the grounds that a case appears to be difficult - a crisis by nature is supposed to be hard. Nevertheless, we cannot help save an enterprise that does not want to be saved.

We didn't sign on with Socrates because we felt the company was constitutionally incapable of resolving its crisis. Our business by its very nature is intimate, and we take on a limited number of cases, preferably those for which we can make an impact. "Impact," of course, doesn't necessarily mean victory, but it does mean there is more likely to be a correlation between input and results.

Crisis management, while a rare corporate discipline, is nevertheless a fundamental one because the future of the enterprise is on the line. A grieving widower appeared on Larry King Live in 1992 and speculated that his wife's terminal cancer was caused by a cellular telephone: Motorola, the leading cell phone manufacturer, saw its stock drop by 20 percent in the following days. Merck's recall of its arthritis drug Vioxx cost the company roughly $750 million in the fourth quarter of 2005 alone. A Merrill Lynch stock analyst estimated that damages against the company could run between $4 billion and $18 billion. Perrier was toppled from its perch atop the bestselling bottled water mountaintop after the chemical benzene was found in its product. And when the Audi 5000 was accused of "sudden acceleration," its sales evaporated and the Audi brand essentially vanished from the U.S. market for a decade.


WHO SURVIVES?


Damage Control examines these survival factors in greater detail later; however, our encounter with Socrates strongly suggested that this company didn't have what it takes to weather the hurricane it was facing. Companies (and individuals) that survive crises tend to have certain features in common, features that are often evident in the first moments of an engagement.

• They have strong leaders who have broad authority to make decisions.

• They question conventional PR wisdom and do not worship at the altar of feel good gurus who espouse "reputation management," the canard that corporate redemption follows popularity.

• They are flexible, changing course when the operating climate shifts (which it usually does).

• They commit significant resources to the resolution of a crisis with absolutely no guarantee that these resources will provide results.

• They have a high threshold for pain, recognizing that things may get worse before they get better.

• They think in terms of baby steps, not grandiose gestures, which explains Rome's success, after all.

• They know themselves, and are honest about what kinds of actions their culture can - and cannot - sustain.

• They believe that corporate defense is an exercise in moral authority, and that their critics are not necessarily virtuous simply because they purport to be standing up for the "little guy".

• They are lucky, often catching unexpected breaks delivered by God, nature, Fortune, or some other independent factor.

Crises are now judged not only by financial (Did the company recover?) and ethical (Was the public welfare served?) standards, but by whether the company handled its crisis effectively in the eyes of Wall Street, Madison Avenue, the plaintiff's bar, and twenty-four-hour-a-day cable news. Inevitably, the airwaves are filled with experts from various fields who will opine that the crisis is being mismanaged. (Saying "all's well" doesn't make for very good TV.) The focus of the post-catalyst debate will be on the public relations aspects of the crisis, with a grotesque overestimation of what deft P.R. can accomplish, and a disregard for the operational, legal, political and contextual nuances.


REAL DAMAGE CONTROL


The term "damage control" originated when the Navy had to grapple with a new technology: the torpedo, and its devastating impact on a vessel. Even if torpedoed, a vessel could sometimes recover and carry out its mission if the crew had the right skill set. Only in the recent media age has the term been applied to public relations and vulcanized to imply that a slick trick can undo the destruction of a metaphorical torpedo's impact.

Wal-Mart, once the very symbol of heartland American success is routinely framed as a cultural villain in the popular press. The once venerable Arthur Andersen accounting firm imploded in an ethics scandal and was vindicated only after declaring bankruptcy. The "blockbuster" drugs Vioxx and Celebrex were respectively recalled and fettered by terrifying safety claims. Dan Rather, the "Voice of God" of network television news for decades, was deposed in a scandal involving flawed sources and forged documents. The venerable Hewlett-Packard was rocked by a seemingly idiotic corporate spying scandal. Nothing escapes a torpedo.

Meanwhile, for every company that is vilified for mismanaging its affairs, another one that resolves their problems with little fanfare - Tyco, which focused on internal audiences such as its customers, comes to mind, as does General Electric's smooth transition between legendary chief Jack Welch and his successor, Jeff Immelt. For every conviction for corporate fraud, (WorldComm's Bernard Ebbers), there is a stunning acquittal (HealthSouth's Richard Scrushy). What accounts for these different outcomes?

How was the same Martha Stewart who was shredded in the press for her clumsy handling of the public relations surrounding her criminal case eventually hailed as a genius upon her release from prison?

Why does the admittedly inarticulate President George W. Bush enjoy communications victories that often overwhelm his adversaries? Meanwhile, war hero John F. Kerry finds his patriotism under attack in the 2004 election at the same time that Bush, who was thousands of miles from Vietnam during that war, is popularly linked to American military bravado.

And what are there differences between damage control for a big company and that for a high-profile individual? A hysterical celebrity who awakens their crisis manager at midnight often just wants to be told that he will still be adored regardless of his actual behavior. But a company needs to make money. Money can always be made discreetly, out of the limelight, while mass adoration inherently requires media coverage. The rules of damage control apply to Sunset Boulevard differently than they do to Wall Street.

Damage Control answers these and other questions from the perspective of world-weary crisis managers, not wishful-thinking academics. This is a no holds barred practical guide geared toward those who want to learn about the harsh realities of crisis management, not those who necessarily want to "make it" in the conventional public relations industry.

The mission of this book is to dispense with the dogma and impart the basic "facts of life" about modern crisis management - what works, what doesn't, and why. These are basic lessons passed on by authors who have spent their careers managing the nastiest public relations battles imaginable.

This book reflects the way things really are, not how we wish them to be. Life-and-death public relations struggles are not about information, as the industry repeatedly preaches. They are about power.

We endorse a political model of crisis management versus the more conventional public relations approach. The fundamental difference is that the political model, which is practiced in our hometown of Washington, D.C., assumes the threat of motivated adversaries while the public relations model tends to view crises as organic and resolvable through good communications. In real crises there are often opponents - a mirror image of your own crisis management team -- that want to torpedo you. That opposing team consists of competitors, plaintiffs lawyers, the news media, politicians and regulators, short-sellers, multi-million dollar non-governmental organizations (NGOs), corporate stalkers, whistleblowers and bloggers. These opponents don't care whether you "do the right thing"; they care about defeating you.

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