Thursday, September 20, 2007

Looking at PR's role in the Northern Rock fallout

Northern Rock, the British bank that defied a 140 year tradition when customers besieged its branches on the streets and crashed its web site to get at their their money, was under a lot of pressure when the Chief Executive, Adam Applegarth, was reported on 17th September to say "Your money is safe with us ....

If a British banker says such things they are true. Bank managers are people to trust, aren't they?

If The Bank of England, says it 'fully backs' a bank, and it gave that assurance about Northern Rock, then 'Old lady of Threadneedle Street's' mighty reserves are there to offer confidence and support the rhetoric. This is 'money in the bank'. Surely?

The same goes for the Financial Services Authority, which declared the Northern Bank was 'solvent' and the Chancellor of the Exchequer's called for calm. These are people and institutions whose reputation we can surely trust, aren't they?

The consequences of belief in such assurances are far reaching, bring the Prime Minister's reputation into question and even affect the biggest economy in the world.

But the sober citizens who save money, have bank deposits and who read newspapers and listen to reporting from the BBC just did not believe them last week and trotted down to their local bank and politely asked for their money back - in their thousands.

The words 'trust', 'confidence' and 'reputation' are bandied around and a failure in 'public relations' is blamed.

The Business says: "...a textbook case of how not to manage investor expectations and public relations...."

The FT noted: "But instead of shoring up public confidence, the public relations gaffe managed to shake it.

Douglas MacWilliams, head of the London-based Centre of Economic Business Research, said the Treasury, along with the Bank of England, had botched their response to the market crisis, damaging their reputation for economic competence.

"The public relations of all concerned has been extraordinarily bad and has exacerbated the crisis of confidence."

The Northern Rock incident is not a one off, it is symptomatic of malaise affecting organisations and people of all sorts.

The 'public relations' of these organisation and people is such that they are not trusted. People do not have confidence in them and their reputation counts for very little.

From today's headlines the same can be said of Asda, Morrisons, Sainsbury and Tesco who are reported to have colluded to raise milk prices, according to an Office of Fair Trading report.

The same can be said of your local grocers who are said to add dangerous chemicals to our food and the same can be said of the medical profession.

In one day, like almost any day, the issues of trust confidence and reputation are affecting people's relationships with our institutions.

Now, as in all these cases, it is not that the organisations involved do not have public relations expertise available and at hand. They do. They have big PR departments and PR advice at the top-most level.

These cases of loss of trust, confidence and reputation is with the advantage of PR expertise.

These failures are the failures of PR professionals.

For PR people to evade the issue is, at best, disingenuous probably shameful and at worst, terminally damaging. The industry has laid claim to reputation, confidence and trust. It has had time to research, explore and develop the issues and practices involved. This is a matter for individuals but also for a wide range of privately and publicly funded organisations.

Who, then can take responsibility and who should be professionally concerned with developing trust, confidence and reputation among our leading institutions upon which our social, political and economic survival depends?

The Northern Rock episode brings into focus the failures of the whole profession involved in the practices associated with trust, confidence and reputation and none more so the representative trade associations in the field such as the Chartered Institute of Public Relations, the Public Relations Consultant's Association, AIBC among others. What are these institutions doing to provide capability and resulting belief in what their members do, say and influence?

Perhaps the Universities are culpable having churned out people with PR degrees and who yet are not equipped to affect corporate, not for profit, public sector and personal trust, confidence and reputation among their stakeholders. Are there competent teachers available to explicate the practices that the profession must have?

Perhaps we can turn to a panel of experts from five continents, representing academics, practitioners and senior executives of professional bodies who set the research agenda and the academics involved. Is their research up to informing and aiding the profession and its clients?

What of the people who monitor these things? How competent are they are in identifying the problems as they develop? What of the UK Media Monitoring Association comprising a wide range organisations that monitor newspaper, magazines and the web? Can they find the tell tale signs ? Is this something that its Chairman, the CEO of Durrants, and the members should be looking at?

It may be that there is a need for an early warning capability to show when organisations undermine their ability to create, sustain and develop trust, confidence and reputation from professional advisor's such as the Association for Measurement and Evaluation of Communication. Are their analysts up to the job? Have they an agenda that will help the profession?

My point is that there are a lot of institutions which, at the highest level bear a significant responsibility and who need to act to ensure that the nature of trust, confidence and reputation is taken very seriously for securing belief in the social, economic and political influences on us all.

Shoddy products and services, hype and spin, dissembling comments and obfuscation, may be at the root of the problem and that is down to individual markers, professions, politicians publicist and journalists and we may need to assemble the evidence and practices that refute such practices and offer more powerful and effective capabilities.

It is now time to develop the capability the PR industry needs and I have identified a number of organisations that need to get together and show that the reality matches the rhetoric.

If a representative of the profession, academic, teacher, monitor, evaluator, or practitioner, its time to put your hands up.

failing to do so means that forever you loose the trust of both our clientèle and the public that they so desperately depend upon.

In an economy founded on intellectual property, intangible assets and confidence in professional knowledge, skill and judgement this is an issue greater than any other in the public, commercial and private arena.