Public Relations Risk
It is with a certain degree of professional observation that the stoush between Sanitarium and NZ importers of UK goods has piqued my interest.
Having worked in IT Risk for longer than I’d care to admit, I’ve spent a lot of time doing risk assessments. The whole Probability vs. Impact is typically qualitative rather than quantitative. The former being a mix of My Professional Opinion and Experience, while the latter is pure numbers based on historical data. Aerospace, medicine, insurance and a few other industries have the best experience of the latter. However for most organisations they can’t justify the investment required to do anything other than a qualitative assessment, something along the lines of one or two people looking at how things work, interview a few people and so on.
However you measure things, if a bad thing happening has a low impact but a high probability, you try to do something to reduce the probability. This is why we have antivirus products on our PC’s. However, if the Probability of a bad thing happening is low, yet the Impact is high, you need to have a plan for dealing with whatever it is, when it happens.
Some of the more sophisticated organisations have very clear definitions for qualifying what that impact looks like and it’s effect on staff, customers, finances, reputation etc. And they are quite adroit at managing media coverage, since they know the longer something appears to rumble on, the greater the impact – whether actual or perceived.
So how would you define Public Relations risk? Something like the below;
Insignificant Impact: No local publicity, verbal complaints to local staff or the call centre.
Minor Impact: Some adverse media publicity in local outlets (freebie town news paper, local radio station, community newsletters etc.), a few complaints to industry or regulatory organisations. Overall short term duration.
Medium Impact: Adverse media attention in multiple channels including print, radio & TV, at a regional or national level. Significant number of complaints to regulatory bodies or Government departments seen to be responsible for oversight. Overall level of interest ‘that just isn’t going away’.
High Impact: Sustained and invasive media attention, the issue becomes a distraction from someone’s normal day job, widespread national and international coverage through multiple channels. Demands for those responsible to lose their jobs. The issue grows and starts to snowball with no let up in complaints. Negative impact on share price, short term consumer boycott.
Catastrophic Impact: Invasive scrutiny from media, regulators, public, Govt. agencies. Calls for a public inquiry, or senior managers to be held accountable (lose their jobs and or face prosecution). Information is leaked from within the organisation to the media. Share price remains affected beyond three months, long term consumer boycott, significant consumer shift to other competitors.
All of the above also skips over the potential for true financial impact and legal recourse or investigation.
As it stands the BBC are falling headlong into a Catastrophic impact with the whole Jimmy Saville issue, while Rupert Murdoch’s media empire in the UK has already walked that path through the jungle for them. It’s interesting looking back at some of the 2011 PR issues, how many of them have already slipped our collective memories, and how many are still fresh and referred to on a regular basis. Where will Sanitarium come out one wonders?
They are already in the High Impact category, and while no one external has mentioned that people should lose their jobs, I am not sure I would want to be the one who signed off on this business or PR strategy. They don’t have a share price to affect, but customers are boycotting them. And given that at the end of the day it is actually a relatively minor issue for them – it’s still hard to understand why they are behaving this way, and creating a risk they didn’t need to create.