Reyes, Brocade and my Mercury News Interview

Yesterday, I had the pleasure of discussing crisis communications with the technology columnist for the San Jose Mercury-News. The subject was Gregory Reyes and his indictment for stock option fraud. Here’s one story of the San Jose coverage. The column that Langsberg is writing will appear in tomorrow’s (Thursday, August 3) edition.

I’m curious to see how my random thoughts about the issue of PR in white collar crime situations will be covered. (By the way, thanks Jonathan Bernstein for the referral!) The question was: “Why are people like Reyes hiring PR firms? Isn’t it normal for clients to defer to their attorneys and simply say ‘no comment’ when criminal penalties are involved?” Great question. The short answer is, no it isn’t normal any more. Because there is a growing realization that we live in a world in which there are two courts. The court of public opinion and the court of law.

Arthur Andersen demonstrated that you can win in one court (yess, they did win their court case) and lose in the other. After they went out of business because of the judgment in the court of public opinion, what does it matter? I asked the question of how Martha Stewart would have fared if instead of protesting her innocent vigorously all the way to jail she had said, yes, I screwed up, I should have known better, I am very sorry, I broke the law, I should pay the penalty. I don’t think she would have gone to jail or have experienced the huge drop in stock value.

CEOs and celebrities and those accused of white collar crime have an important judgment to make. What will hurt them the most ultimately? The complete loss of reputation and credibility when the public judges you guilty? Or the penalties to be meted out if you lose in the court of law?

It is vitally important to understand that these two courts operate very differently. The rules of evidence of very different. And things may not be very fair. As I pointed out to Mr Langsberg, if Mr Reyes is found innocent in a year or two in a court of law, will there be banner headlines to match the size of the ones announcing his indictment? Of course not. It may not be fair, but it is the way the game is played. And that’s why people in Mr Reyes’ position need qualified counselors to assist them in the court of public opinion.

Mel Gibson–doing it wrong and doing it right

Mel Gibson stepped into it big time. He got arrested for DUI. But much worse he made some anti-Semitic and sexist remarks. Well, he was drunk. But that’s a real problem.

What he did right was the response. Read it here on CNN.  

When you’ve really screwed up, here is what it takes:

– full and complete admission of the errors without defensiveness and without any conditions or “yeah, buts.”

– recognition you have a problem that needs to be fixed.

– asking for help in getting it fixed.

– detailing specific actions being taken to address the problem.

Every company or organization or celebrity caught in this level of serious difficulty should take a lesson. What if Martha Stewart had done this? “I screwed up, I’m sorry, I should have known better, I will pay the price.” Would she have gone to jail? Lost the millions in share value? Lost the respect of most of the world? I don’t think so.

Why is it so hard for us as individuals and companies to admit when we are wrong?

Apple's ipod: What to do when the media creates a disaster?

The Chicago Tribune reporter blew it. Doing a story on the ipod they quoted an Apple spokesperson as saying the ipod would last only four years. Actually, the spokesperson, Natalie Kerris, said it would last “for years.”

Now this is on the one hand and understandable mistake. On the other hand, potentially devastating. The reporter and editors have an obligation to get something like this right. The implications for Apple on share price, on views of the company by its customers and competitors can be enormous. Planned obsolescense is an idea that was never very popular and that’s exactly what it sounds like Apple’s plan was.

The question for crisis communicators is what do you do about it. This came to my attention via AppleInsider. Here’s the story.

In my view, here is one of those relatively rare occasions where crisis pr and traditional pr can come together. I would broadcast as far and wide as possible the mistake made by the Chicago Tribune reporter. Get as much coverage as possible. It helps the brand. It’s good advertising. It clarifies the misunderstanding. It makes reporters covering Apple in the future far more cautious because they know the company is not going to simply allow poor reporting and editing to go unnoticed. Get the word out there. Why is this known only to “insiders?”