Counterpoint

When you hear about a corporation under attack where do your sympathies lie?
The common perception is that it's a bit like a David and Goliath battle, the big corporation is always the bad guy. But public relations consultant Eric Dezenhall says it's not quite that simple.

In his business, he increasingly encounters companies being deliberately undermined by adversaries such as lawyers, NGOs, bloggers, extortionists and commercial competitors eager to seek a market advantage.

The old PR maxim is to try and keep your head down and minimise the damage but Dezenhall says it's now time for companies (if they are innocent) to go on the offensive.

Transcript

This transcript was typed from a recording of the program. The ABC cannot guarantee its complete accuracy because of the possibility of mishearing and occasional difficulty in identifying speakers.

Paul Comrie-Thomson: Now to crisis management and public relations. Eric Dezenhall is the cofounder and CEO of Dezenhall Resources, a public relations firm based in Washington. He's also the author of Damage Control: Why everything you know about crisis management is wrong. Dezenhall says that companies can no longer afford to keep their heads down in a crisis. He says that it's much better, if you're innocent, to go on the offensive. We caught up with Eric Dezenhall recently and asked him; what does the conventional wisdom recommend when a company is under attack?

Eric Dezenhall: I think that what's being taught in a lot of business schools, it's a lot of this self-flagellation, it's 'say you're sorry, show concern, recall the product'. And all of those things are perfectly fine, the problem is they rest in a central position that really is unwise which is the assumption that the company is guilty. A lot of what I talk about in Damage Control and a lot of what I see in my practice is I don't immediately accept the narrative that every company that is accused of something necessarily did it.

Paul Comrie-Thomson: Yes, 'the company is bad' seems to be a very common narrative, but of course you recommend that companies should recognise the threat of motivated adversaries. Who might be in the opposing team out there?

Eric Dezenhall: Where I think crisis management has been wrong is it's anchored sort of in this old style public relations assumption that everything is a communications problem versus a political model which understands that some things are conflicts. It's not like the Palestinians and the Israelis have some sort of misunderstanding, there is an agenda at work. And I think what is always staggering to me is how people don't realise the role that plaintiff's lawyers and non-governmental organisations play in introducing hostile narratives to the news media that really cause damage.

Paul Comrie-Thomson: In terms of hostility, you talk about a marketplace assault in your book. What is a marketplace assault?

Eric Dezenhall: A marketplace assault is different from a crisis. A crisis is when some sort of terrible event comes up, a product is contaminated, something like that, but a marketplace assault is not so much when the company has an organic crisis but when somebody wants them to have a crisis. So a lot of what I get in my practice are cases where our client is on the receiving end of an orchestrated attack; something by someone with an agenda, someone who knows how to spread rumours on the internet, someone who knows the reporters to go to who will cover whatever it is they're selling sympathetically. I think that you treat a marketplace assault differently from the way you treat a crisis.

Paul Comrie-Thomson: It's interesting that the narrative you're talking about is reflected all the time in popular movies, we go way back to Jane Fonda in The China Syndrome, it's always the good guys are on one side and the corporations are always bad. But you're suggesting that marketplace assaults are driven by motives that may not be pure.

Eric Dezenhall: Well, no, but I think that what happens is the news media, especially in America but I think it's true in other places in the world, people tend to look at corporate issues the same way, with villains, victims and vindicators, that a movie producer would. You know, the little blonde girl is always the victim and the corporation is always the villain. Well, what if the cute little blonde girl is being put up to something by very litigious parents to make allegations? The very suggestion of something like that sounds positively fascist but the fact is not every attack on a business interest is noble and not every assertive defence of a business interest is dirty tricks and malfeasance but that's the way these things tend to be farmed politically and in the media.

Paul Comrie-Thomson: And that's why you say that playing nice only invites aggression and that hitting hard and first is better.

Eric Dezenhall: It's better if you believe you're innocent, and what I keep coming back to is some people who don't like my more assertive philosophy have said, 'Well, this guy will tell you that you should never apologise or show concern,' a draconian characterisation. The fact is, I tell clients all the time if they screwed up to clean up their act because if they don't clean up their act there's nothing I can do for them.

That said, increasingly over the years corporate stalkers, plaintiff's lawyers, non-governmental organisations have become very adept at using the news media, at using politicians, using regulators to prosecute their attacks. I simply reject the notion that everyone who has been accused of making a faulty product is involved with malfeasance. I like to call it the fallacy of evil men, the notion that very bad people go into a basement somewhere and say, 'You know what, we could make a safe pharmaceutical product, but let's not.'

Paul Comrie-Thomson: If a company is not innocent, if in fact they are at fault, what advice do you give them?

Eric Dezenhall: As a general rule of thumb; if you're guilty, repent, and if you're innocent, go on offence. I think that we've had plenty of clients that have come to us over the years and they always open things up by saying, 'These allegations against us, these are totally false, there's nothing there.' And we beat up on them and what we inevitably find is they are not pristine. But a lot of what we do with companies that genuinely did naughty things is help them clean up.

Paul Comrie-Thomson: You're talking about repenting, but when you have adversaries out there, do they usually care about a company acting responsibly?

Eric Dezenhall: They could care less, they care about their agenda, and I think that one of the things that companies learn the hard way is when they accept this 1975 logic that if you just show concern and be sensitive then the problem will go away, when in fact what often happens is the attackers come after you even harder. In many different countries the act of admitting to something, this is admissible in court. So if you're getting on TV and saying, 'We're so sorry, we made this bad product,' that becomes admissible in court.

I remember doing an interview around the time that Martha Stewart had her legal problems and I was on the air with somebody who was saying, 'She should just come right out and apologise.' You can't apologise if you are facing criminal prosecution and your position is that you're innocent. So I don't see a correlation between companies that attempt to look sensitive and their attackers saying, 'You seem like a nice guy after all, we're going to stop going after you.'

Paul Comrie-Thomson: When you talk about attackers you use the phrase 'sabotage gossip'. What's that?

Eric Dezenhall: I think what we see is the role of the internet has become positively lethal, and if you put a rumour on the internet and get it circulated you can do incredible damage to a company. What's amazing is how the mainstream media have been so easy to manipulate, for example, by short sellers who start spreading rumours about a company or about a product and then they short sell the stock. Only recently, at least in the US, has the Securities and Exchange Commission began to catch on to this, whereas if you had come to me maybe eight years ago we could have told you that the internet is being sued to sabotage targets, largely because it's next to impossible to stop. I mean, what's to stop some individual from going to a local photocopying place, getting online and saying, 'I heard a rumour XYZ product has a rat in it.'

Paul Comrie-Thomson: Speaking of rats, malicious forces are often at work. Tell us about the Wendy's chilli story.

Eric Dezenhall: Wendy's, a couple of years ago, had a situation where somebody found a severed finger in their chilli, and it received a lot of attention in the US. This happened in California. I wasn't involved with the case but I did a lot of media analysis, and one of the people who I was on TV with said, 'They need to recall the chilli,' and I said, 'That's ridiculous, there's nothing wrong with the chilli, the problem is that there's a criminal out there and the crisis management solution is to catch the criminal.' And it took a month but ultimately what I was telling reporters behind the scenes who were interested in how these things work is this is not the 1975 textbook 'say you're sorry and show that you are putting in place an anti severed finger program', that's ridiculous, it's about a criminal. When the criminal was caught, and she was caught, the crisis effectively ended.

Paul Comrie-Thomson: You're talking about one month's work behind the scene with reporters, but when you've got a story like this everyone wants the instant scandal, they want the instant sound bite talking about good guys and bad guys. How did you keep a lid on greedy or anxious reporters for one month? It must have been difficult.

Eric Dezenhall: First of all, just to be clear, it wasn't I that did it, but I think that Wendy's had very, very competent people and they had a rough month because just like...there was a famous case with boys at Duke University accused of raping a woman and it took a year for her false allegation to come to light. But the problem is exactly what you said, the news media are interested in the quick little kill, they're interested in the quick narrative and they gave Wendy's a brutal time. One of the things Wendy's did, quite effectively, is they ended up saying to the media, 'We will not cooperate with you if you keep showing that finger on TV.' A lot of media were offended by that, 'You don't tell us what to do.' 'Oh yeah? Well, you're trying to ruin my company.'

Paul Comrie-Thomson: That's a very brave call, isn't it, from a company, 'We won't talk to you if you're going to play that sort of game'?

Eric Dezenhall: It really is a last-ditch type of thing. I think that for years the idea of pushing back at the media would never be done. It was considered insane, but I believe that all that changed in 1993 when a television show called Dateline NBC blew up a pickup truck in order to demonstrate its thesis that the pickup was flammable. You blow something up, it tends to be flammable. I think that what that taught business leaders around the world is 'You know something? These people are going to destroy us', and I think that what has yet to happen is that the equivalent of that with the internet...right now it's very difficult to stop an internet rumour basically because no one has ever been sued in a very, very big way. But now...whereas the ethic years ago was 'keep your head down, don't cause trouble, don't pick a fight with the press', the stakes are so high and a company can be ruined so quickly that I believe that a lot of companies are saying it's not immoral to defend yourself.

Paul Comrie-Thomson: In all the work that you've done over the decades, what aspect of human nature is most often misunderstood in a crisis?

Eric Dezenhall: I think that there is a tendency to ascribe malice and incredibly Machiavellian cunning to situations that become debacles. There is a tendency to think that we, the human beings, are in control when in fact a lot of things that happen are largely out of our control. I just don't see a lot of evil going on. I've dealt with some of the worst controversies you can imagine, and very few people went into a room, closed the door and taped over the windows and said, 'Let's do something bad.' I think that the narrative that the media and legislators and non-government organisations enjoy is this idea of the Hollywood villain who is staying up nights thinking of nasty things they can do to you.

The other thing I think is there is a gross overestimation, especially in America, of the power of the so-called spin doctor, the notion that if you hire a clever consultant they will find a way to fool everybody. There is such a desperate desire to believe in all of these clever people, and I've got to tell you, I'm pretty good at what I do, but it is what it is. I mean, if somebody dropped acid in the river, they dropped hydrochloric acid in the river. What am I going to do? Issue a press release that says 'they were just shampooing the fish' and everybody is going to believe it? I don't think people are fooled that easily. The only people who can be fooled are the people who have a desperate desire to be fooled.

Paul Comrie-Thomson: A final question, and I'm going to use a bit of Australian slang here...you talked about the myth of closed-door conspiracies and in Australia we have a saying, it's probably not a conspiracy, it's probably a stuff-up, which I think in American is a 'screw-up'. In your experience is that the way the world usually works?

Eric Dezenhall: It really is. It's funny, in America everybody...I shouldn't say everybody but a lot of people are...there's a whole industry of Kennedy assassination buffs and basically the proof that it was a massive conspiracy is that there's no evidence of it, and it's the lack of evidence that proves that the conspirators were diabolically clever. I grew up in New Jersey which was a very big mafia area, and somebody said to me once, 'The mafia killed Kennedy,' and I said, 'Do you know these guys? These guys are absolutely illiterate, they're violent.' But the idea that they're capable of a massive conspiracy is not the case.

And I think that what I'm always staggered about is if it's not a stuff-up or a screw-up, there's usually a kind of boring explanation such as nobody wanted to go in to the CEO and tell him that they weren't going to make their numbers, or nobody wanted to really deliver uncomfortable information, or somebody just said let's not deal with this, let's just hope it goes away. It's just something really idiotic and consistent with human nature as opposed to a massive plan.

Paul Comrie-Thomson: In summing that up, the truth is often boring or maybe it's idiotic. Thanks very much for talking to Counterpoint.

Eric Dezenhall: Thanks so much for having me.

Paul Comrie-Thomson: Eric Dezenhall is the cofounder and CEO of Dezenhall Resources Ltd. Damage Control: Why everything you know about crisis management is wrong by Eric Dezenhall and John Weber is published by Portfolio.

Guests

Eric Dezenhall
CEO- Dezenhall Resources

Further Information

Dezenhall Resources

Presenter

Paul Comrie-Thomson

Producer

Ian Coombe

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