Thursday, September 18, 2008

PR - a Profession Tainted by the Financial Community

I am incensed.

Two blog posts have prompted me to respond in pretty harsh terms. One is to Tom Watson’s post in which he says “If you think about it, public relations has always been defined as a management activity” and Richard Bailey’s post entitled “Where is PR”.

My argument is that the role of PR as a management discipline is in tatters. The loss of trust, absence of transparency, destruction of relationships, spin and hype surrounding financial instruments and the turmoil in the financial markets demonstrates that PR practitioners in the financial institutions have failed in their fiduciary duty.

The fiduciary duty, in Wikipedia is identified as ‘a legal relationship of confidence or trust between two or more parties, most commonly a fiduciary or trustee and a principal or beneficiary’. If PR is to believe it has a management role it has to recognise that it has a legal duty as well. But what of the arguments about PR as a management activity? I explicated some of my thinking:

To Tom’s post I make this repost:

Of course PR cannot be anything but a management function (all the rest is execution). It must have the regulatory oversight of marketing but much else beside including its contribution to strategic corporate value explication, corporate and operational decision-making, strategy development, realisation, and policing of corporate responsibility if it has a writ in relationship management.

But we have to be wary of what we mean. If PR is a management function then the financial turmoil we are witnessing today is in part (mostly?) caused by poor public relations.

Lack of transparency (notably of the value of paper) poor corporate responsibility (is the organisation able to stand by its responsibilities - if this not so CSR is not a PR responsibility) and spin instead of conversation blind relationships and undermine trust.

These are PR issues. Issues that are hardnosed and at the centre of good governance and public relations practice.

What then were/are the responsibilities of the in-house practitioners in the financial institutions?

The role of PR would be able to strategically develop and deploy radical transparency to enhance trust (especially in derivative bundling and holdings - the very products of these organisations).

The role of PR would also ensure that corporate responsibility would entrust employees and commercial partners with responsibility for their actions and the extent to which transparency could be deployed to underpin trust - and thus deserve the rewards and - importantly - severe penalties.

The role of PR would also apply downward pressure on over-claiming and spin to ensure that obfuscation was culturally unacceptable.

Finally, the role of PR would develop interactive relationships (mutual understanding in Grunig’s world) through effective engagement using tools of internal and external communication.

PR, then, as a management function is pervasive. Its role is at least as deep in the organisation as finance or IT. It reaches into every conversation, transaction and relationship.

This pretence to be a management discipline is all very fine, but are the Universities up to the task? Can they show students how to manage boards and senior managers who have been brought up on hype as a habit and can they show the contribution that trust offers in delivering sustainable development and profitability? Can they then also teach those multiple disciplines that can help students deliver as practitioners?

I subscribe to the PR is a management discipline school and, as a practitioner, have been through the bruising experience of taking on executive boards as a result. Its a very tough job. Its a job that entails close working (and not always agreeable) relationships with board chairmen and a very straight relationship with the CEO and the other members and, in passing, it means that marketing has to answer to PR.

Is this, Tom, what you mean by being a management function or is it something more fluffy like teaching PR as part of communication - or worse - marketing.

It remains to be seen whether the Masters courses will pick up on the failure of PR in the financial sector as a case study. Will they use this experience to help other sectors where, right now, the practice has to be able to deliver trust between organisations and their constituencies as the effects of the credit crunch works though into the ‘real’ world where trust will also determine corporate survival?

For Richard my response follows a similar path.

The Euprera agenda begins with spin because it has the preamble:

"Public Relations and Corporate Communication have been, and are, rapidly evolving and expanding their influence within complex organizations."

Well, semantics first. Corporate Communication is to Public Relations as tennis balls are to Wimbledon. Why not add in press release writing and events management? The highest calling is to be responsible for managing organisational capability in relationship development with publics/constituents. The rest is technique.

The truth is that PR has wimped out of its responsibilities for so long that its premier European education and research organisation can get away with the intellectual equivalent of Strictly Come Dancing. Here we see the professionals and academics twirling around for the entertainment of an audience.

Lets call a spade a spade. The world is going through financial turmoil because public relations practitioners were just not up to the job.

When one banker cannot trust another banker there is a breakdown of not just trust but relationships and an absence of meaningful, symmetrical communication. Who was the manager responsible within the organisation for trust, relationships and communication? Where are the PR practitioners 'expanding their influence within complex organizations'?

I don't really care what the twirling dancers may want to reply, the semantics are but chiffon disguising the stumbling footwork. The fact is that there is only one discipline responsible - public relations management.

As a discipline it evidently has not expanded influence within complex organisations and most notably today, the majority of the whole financial sector worldwide. Today, if you have money from the public or are a government, you can buy almost any bank in the world at a massive discount - if you dare to trust the balance sheet!
The abysmal internal and external relationships that has lead us to this pass has one culprit.

Oh, I am sure that the PR courses taught by the worthies at the conference cover subject matter like ethics, the nature and role of symmetrical and a-symmetrical relationships in developing mutual understanding and the role of transparency in building mutual trust. But do they follow this through with how these elements of PR play out in practice? What are the consequences? Or how these elements are managed (by the practitioner?) in an organisation?

If not, why teach these subjects? Are these elements of PR degrees added to give some form of academic respectability in the courses like sequins stitched on to make a plain frock look like a ball gown?

The insecurity of the profession as it dances an endless two-step between being press releases and a contender for the 'C' suite is down to poor education. It is just not difficult to circulate a memo to the board saying that trust and transparency issues are ruining relationships and will wipe out the company if the board does not get a grip - and I know how to solve the problem. Any junior PR can do it and the 'head' of PR should, knowing how to manage communication effectively, find such a move easy. Its sure route to the 'C' Suite and it is only those who lack courage, doubt, are insecure or ill trained and have not arrived who doubt.

But how to manage that sort of relationship and that sort of programme is not typically part of the PR industry's research or teaching or practice. Perhaps then, PR is not seen in academia as a management practice.

I have not seen, and doubt if we will ever see mass, professional or academic condemnation and approbation of PR management at the UK's Northern Rock and HBOS banks, even though we, as tax payers, are picking up the bill and many will also pay with their livelihoods.

The reality is that public relations, as a management discipline, is tough, hard nosed, institutionally pervasive and offers trust in and through constituent desire for engagement; offering symmetrical relationships to deliver long term stability, and in the case of commerce, consequential trade and profit.

The firm (which, I contend, is the nexus of relationships), will always be better off with good public relations and it starts with answering your question 'where is PR'.

It should be quaking in its boots. It should be anticipating the enquiry into its failures that prompted the Credit Crunch and financial sector melt-down and its consequences.

It should be concerned that the role of its institutions will be subject to academic scrutiny over standards.

It should be examining how future generations of practitioners do not lead us to such a pass.

Unless we see such investigation then perhaps in answering 'Where is PR' the repost will be 'no one cares.'

Is this where we believe that our reputation should be?


  1. The massive upheaval and collapse of financial institutions is undoubtedly a set of events unprecedented in modern times. For PR to be at the centre is simply unrealistic. In many cases things have gone too far and too fast for PR to have any control.
    They could create a plan – but would there be any point in having a plan for apocalypse? Like the rest of the firm, if you think you are not going to get paid at the end of the month are you going to hang around to manage the corporate reputation. If there is a plan it should be with the liquidators/receivers who will have a quite different set of priorities.

  2. Oh, I think that this is an issue that goes to the heart of PR. Good PR is good PR and not good PR when there is a big crisis. So the profession needed to be more professional 20 years ago and longer and has a lot of catching up to do. It is not acceptable for HBOS not to declare material facts four hours after it was published by the BBC. Transparency is dynamic.