In an interview with the BBC's Robert Peston for last Monday's Panorama (8.30pm on BBC1) John Varley said that the banking industry is going through " a public relations crisis, that it must apologise for what went wrong - because banks will not regain the vital trust of customers unless and until they own up to the sins of the past and say sorry."
How did the industry get to the point where it has a public relations crisis?
Was it because it had good public relations? Obviously not. Here we are, sixteen months after the the toxic nature of the banking failure came to light, being given lessons in PR by a chief executive.
Were the practices of the banks so well served by the PR industry that they lost trust, not just between banks but between banks, business, retail customers and government? We have now seen that relationships served by poor PR is, in itself toxic.
Was the industry served by good public relations advice that put the industry into a circumstance that "will take between one and two years for lending to stop shrinking"?
Lets look at what was involved.
PR managers need to know about the products and services provided by their organisations. After all they have a responsibility for explaining what the organisation does to its publics. Failure to understand the product is high risk. PR practice without individual social responsibility of the nature of understanding the organisation dangerous.
PR managers have a responsibility for identifying threats to relationships and reputation and have a duty to inform the organisations of the threats and their consequences. It is a matter of individual social responsibility to both identify such threats and to engage internal publics through their own individual social responsibility to remove such threats.
The role of PR as watchdog and advisor in the management of relationships goes beyond the description of our trade, it is a matter of corporate financial prudence. It is extraordinary that Varley was not told that relationships are a corporate asset. After all, the evidence, as I pointed out in 2006, is robust. Individual social responsibility to internal and external publics includes a need to understand the financial implications of actions that will undermine relationships and reputation. Failure to do so is, of its nature more toxic than the reasons for the credit crunch.
PR managers have a responsibility for advising organisations about the ethics of practice. Ethical practice is about values and has to be part of individual social responsibility.
It is a matter of corporate social responsibility and, more important, individual social responsibility.
Now we have a senior manager in the banking sector pointing his finger at the practice of public relations.
It is an accusation that the industry has to take seriously.
Is it down to a chief executive of a bank to point out these failures or is it the individual social responsibility of practitioners and corporate social responsibility of the profession and its institutions to examine practice?
The track record of chief executives is, at a personal level, quite good but in practice they need robust professional capability in execution. Chief executives also need to be managed and, in this case not by the marketers, accounts department or non-executive board but by the PR manager.
In the month that the credit crunch struck (August 2007) I made exactly this point an so it was not exactly that we in PR (and Sir John Sutherland no less) were not aware of the need and consequences of poor social responsibility.
I am a Fellow of the CIPR and it is, I believe the dusty of Fellows to make the point and to call on the CIPR to be serious about the role of PR in guiding, advising and helping management of our clients.
A long time ago, I gave notice of the ethical, individual social responsibility, issue and asked:
Is the ethical practice then to expose the values or to change them?If the values that drive the public relations of an organisation are toxic, as in the now admitted case for banks, we have to re-visit the role of PR.
A purist practitioner would expose the values and be damned and would allow the organisation to be damned by its constituencies. It is a form of practice that can stand back from the consequences of foolhardy management.
On the other hand the PR manager (a person who attempts to manage the relationships between an organisation and its constituencies) would attempt to change the organisation.
Two-way symmetry is no longer enough.
I have moved on. It is not enough just to stand fast and change the nature of the organisation such that its ethic will match that of its publics (the Grunigian view). It is a matter for being proactive both internally and with publics and, additionally, to be proactive in the eco-system of the client environment such that the environment can sustain the organisation.
We have to act.