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