Wednesday, August 11

Inviting A PR Disaster: Hewlett-Packard

If there is any doubt that Hewlett-Packard implemented the wrong crisis communication strategy, look no further than abundant speculation. Speculation doesn't happen by accident. It happens when the public doesn't have any semblance of clear, authentic communication.

Stanford scholar and longtime Hewlett-Packard watcher Chuck House has come out strong for HP. He says chief executive Mark V. Hurd's resignation is tied to red herrings. The real reason, he says, is Hurd, nicknamed Mark Turd by ex-HPites who worked directly for him, was a thug.

The Los Angeles Times has taken a different tact. It reports that the HP board of directors ought not to flash a high standard of ethics too liberally. They cite how employees and top brass are treated differently when it comes to compensation, including an unusual formula to calculate the lump sum value of pensions that increased John H. Hammergren's pension from $11 million to $85 million.

James B. Stewart, a columnist for SmartMoney magazine, takes yet another approach on The Wall Street Journal, claiming that the HP board of directors didn't disclose enough. He writes that "by withholding information, the HP board is only prolonging the agony and feeding the press a juicy mystery." Perhaps not on the front end, but certainly now, HP has bought a crisis communication plan that caused more pain than if it would have not reacted to the threat of scandalous publicity.

Bad Crisis Communication Plans Magnify, Multiply, And Amplify.

There are more than 10,000 HP speculation stories across the globe today. And by the looks of things, it's only the tip of the iceberg.

Even if we just look at these three stories, they are all bad, even the pro-HP piece penned by House. It makes you wonder how powerless the board of directors was, waiting for a misstep to bring the "evil" executive down. The Los Angeles Times makes it look like the board is engaged in selective ethics. And the Stewart write-up makes it look like they are holding back, perhaps even lying.

Any time the crisis flies in more than several hundred directions, you know it's botched. Now, business reporters (people who are always looking for exciting stories because the daily stories aren't always so exciting) are looking at every angle. They are making mountains everywhere and they are doing it well beyond the scope of the initial crisis, which was a mole hill by comparison.

Situation Analysis Is Always The First Step In A Crisis.

If there were any internal politics as some suggest, they do not belong on the boardroom table at a meeting to discuss disclosure in order to avoid a public relations disaster. Handling a crisis can only have one objective: minimize damage.

So, if we take the board of directors' word that there is nothing more than what they disclosed — that Hurd was engaged in a non-sexual close relationship but fudged expense reports to hide the relationship to avoid the perception of an affair — then there is no other conclusion than they botched the plan.

In this scenario, a better course of action would have been to clear the chief executive's name, make him pay the $20,000 back (which becomes a personnel matter), manage any crisis in the event it becomes a crisis, and move on. After all, in this case, there was no evidence that Hurd's transgression (which isn't even clear as a transgression) would have been as big of a blip on the media radar. Even if it was, it seems the intent — if it was to avoid a crisis — has backfired exponentially.

This leaves us with two possible outcomes. Either HP created a crisis out of nothing or there is much more to the story.

I'm not big on crisis communication rules other than treating them as situational. I look at the classic tenets of crisis communication and see guidelines that help us ask the right questions given the readily available information we have.

However, if you do want a rule to hang on your shingle, I might suggest this one: in for a pinch, in for a pound. And once you are in for a pound, you'd better hope your only motivation was to articulate the crisis as authentically as possible.

Evaluating A Living Crisis Communication Situation.

Almost every time we evaluate a living crisis communication case study, someone inevitably says that it is too soon to conclude anything. In general, I agree with that assessment. For example, I would be doing you a disservice if I said this will kill HP.

I don't think it will (operative word is "think"). I buy HP products because the hardware is good. The ink, on the other hand, is very pricey. But I suppose it's possible.

However, public relations professionals and crisis communication managers ought to know by know that they have to draft crisis communication plans based on readily available information (not all information) and build in dozens of contingencies if and when that information turns out to be inaccurate. It happens all the time.

Sometimes the people in the field make a mistake. Sometimes public perception turns bad regardless of the facts. And sometimes, clients aren't always forthcoming. They might not lie, but I have heard "Oh, I probably should have told you ..." enough times that charging clients one dollar per utterance would have meant my retirement.

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