Most family businesses encounter publicity, good or bad, at one time or another. The trick is to capitalize on or cultivate what’s positive and avoid or at least minimize what’s negative. In other words: to plan for and manage your company’s public relations.
It’s certainly logical to dodge bad publicity, but many family businesses shun favorable notice as well.
“Family businesses are private and secretive,” observes Craig E. Aronoff, the author of a college textbook on public relations and principal of the Family Business Consulting Group in Marietta, Ga.
Unless they are family-controlled public companies hoping to get buyers for their stock or they deal directly with consumers, family firms generally “would rather not be noticed at all by potential competitors or others,” Aronoff says. “They actually see a fair amount of value in not getting publicity.”
One downside is that many family businesses aren’t prepared to manage a crisis that can drag the company down or even destroy it. And if the crisis hits the media, says Richard L. Narva, partner at the Roseview Group, a Boston company that advises entrepreneurial families, “you start to lose key executives. You start to lose key customers. The stock price [of a publicly held family firm] can plummet. You can end up with lawsuits from shareholders. It can be a nightmare.”
Consider the predicament that Pete Coors, vice chairman of Molson Coors Brewing Co., got himself into in May 2006. On his way back from a wedding, the beer executive was arrested on a drunken-driving charge near his home in Golden, Colo.
How did Coors handle the situation? He put the incident behind him as quickly as he could. He issued a statement of apology and later pleaded guilty to driving while impaired, a lesser charge than the driving-under-the-influence count that had been filed against him. He was sentenced to 24 hours of community service and ordered to attend alcohol education courses, and his driver’s license was suspended for three months.
The Roberts family, the force behind Philadelphia-based cable giant Comcast Corp., almost passed up an opportunity to earn favorable publicity. Members of the family, according to the Philadelphia Inquirer, are “notoriously private, and charitable gifts are high on the list of topics they rarely discuss.” Late last year, however, the Robertses made a gift of $15 million to the University of Pennsylvania to help launch a $144 million center for a revolutionary treatment of cancer patients. A factor in their decision was that Aileen Roberts, the wife of Comcast’s CEO, Brian L. Roberts, had been undergoing treatment for breast cancer at the university’s hospital.
Ordinarily, the Robertses would have kept quiet about their gift. But Penn president Amy Gutmann persuaded them to go public with it on the grounds that doing so would inspire other donations.
The result was a front-page article in the Inquirer. It featured photos of Brian Roberts; his father, Ralph; and a beaming Aileen, who had recently finished radiation therapy and wore a stylish scarf to cover her bald head.
Comcast frequently receives negative media coverage, particularly when it raises cable rates or when its customer service falters. But the story of Aileen Roberts’ illness and the family’s gift humanized the company; its chief executive; and his father, Comcast’s founder. The publicity reminded area residents that Comcast plays a positive role in the community and offered an alternative to the image of a heartless corporate behemoth.
One family firm that courts good publicity is Donald A. Gardner Architects Inc., a collection of small companies centered on creating house plans for sale to builders and individuals.
Angela G. Santerini, president and daughter of the founder, finds that good public relations opens doors for the Greenville, S.C., company and enhances its bottom line. She says the 60-employee business promotes itself in a variety of ways, including “creating a superior product,” taking on leadership roles in the community, positioning itself as an expert in its field by submitting articles to industry magazines, and being involved in philanthropy.
Even if your name is not a nationally recognized one like Coors or Roberts, it’s still important to address public relations issues. Your company might be the largest employer in a small town, a factor that renders your family of special interest to the members of the community. Like the preacher’s kid, your children will be watched more carefully than most for signs of bad behavior. Actions your company takes will be scrutinized for their effect on employees and the community. The support you give to the community by way of philanthropy or leadership will be measured and found generous or wanting.
The key for family businesses is to make a concerted effort to manage communications to protect and enhance the image of both the business and the family. Here are some additional ideas for doing so:
1. Identify your constituents. Family businesses have many constituencies, and the general public may be the least among them. Constituents may include other businesses, shareholders, vendors, securities analysts, bankers, employees and potential employees, family members, outside directors and the government. Information received by any of these groups about your company constitutes publicity, even if it doesn’t reach the popular media.
2. Develop a public relations/publicity policy. Your family should determine how to present its business to its constituents and decide whether prominence in the media is important to it. The policy should make clear who can talk to the media and under what circumstances. Aronoff says he has worked with a number of families who have gotten upset when a relative has told the media something that the family didn’t want said, or has taken too much credit or received “an inordinate share of the limelight.”
3. Do a public relations audit. Learn where you stand with constituents. Survey employees, customers and others. Gather clips about your company from newspapers and other publications. Do an Internet search for your company and family names to see what the buzz is about you in cyberspace. The information you gather will help you determine where you are strong as well as where you are vulnerable. If you aren’t happy about what you uncover, you can begin to take remedial action.
4. Establish a strategic public relations plan. Aronoff recommends a plan that covers “offense” by outlining how publicity can help you realize your goals and also covers “defense” to help you avoid the kind of publicity that can hinder success.
5. Be sure that your crisis management plans include a communications component. Crisis plans specify what action is to be taken in the event of catastrophe, such as the unexpected death or incapacitation of your CEO, having to file a Chapter 11 bankruptcy, or a health or safety scare surrounding a product made by your company.
A company can take effective action to deal with a crisis, but “the failure to communicate the wisdom and effectiveness of the strategy undertaken in a crisis can completely defeat the utility of the actions taken,” says Richard Narva, who was a practicing lawyer before he became a family business consultant. (For more information on crisis communication strategies, see article on page 66.)
6. Consider hiring a public relations professional. Donald A. Gardner Architects initially outsourced its public relations function, but in 1995, the company decided that having an in-house marketing communications coordinator would be more effective. The result was not only a savings in time and money, says Santerini, but also “the creation of a true advocate for our business”—someone who understood the company from the inside out and who had a better grip on the company image.
The public relations function can originate with the president and, as the company grows, be shared with a marketing manager or human resources manager, Santerini says. But after a company grows to more than 40 employees, she recommends hiring a professional to do the job.
Take steps to ensure the person you bring on board understands what constitutes a good story and how to approach editors and broadcast producers. Today’s public relations specialists also need a solid understanding of how to use the Internet. Good bets are individuals who have earned the designation “Accredited in Public Relations” (APR), recognized by many professional public relations organizations. Former journalists, more plentiful in these days of huge newspaper layoffs, can also be desirable candidates.
7. Understand the public relations power of your workforce. Your employees are the “face” of the company in everything they do, from the way they answer the telephone to how successfully they meet clients’ needs.
8. Be squeaky clean. Some family business owners bring bad publicity on themselves with what Narva calls “self-inflicted damage.” John Rigas, the founder of Adelphia Communications Corp., once a large cable company based in Coudersport, Pa., and his son, Timothy, were convicted of conspiracy, securities fraud and bank fraud in 2004. Both are free on bail pending appeal. Another son pleaded guilty to a lesser charge and was sentenced to ten months of home confinement. The family has endured damning headlines around the country. The lesson? Don’t sabotage yourself.
9. Ignore what’s irrelevant. Suppose a distant relative robs a bank and his last name is the same as the name on the door of your family business. Some reporter somewhere is sure to make a connection to your company, even though the relative has nothing to do with your business. Try not to waste time or energy countering the publicity. Remember: Even the Hilton Hotels Corp. cannot possibly foil all the smirking publicity generated by Paris Hilton.
Follow the same “roll-with-the-punches” attitude toward most gossip. If your family is well known or you’re perceived as wealthy, don’t be surprised if the media photograph you and your spouse at an important fund-raising gala or comment on such topics as what family members have been seen at what hot nightclub. If you believe the coverage is libelous, however, get your lawyer’s advice on how to proceed.
Craig Aronoff offers one other caution: Monitor younger family members. That especially means making sure they aren’t using the Internet in ways that can embarrass themselves, your company, or your family. On MySpace and other sites, he says, kids may brag about drug use or tell lies about themselves “in an effort to puff themselves up to others of their age. And those things are leaking out into many other venues, which can be quite dangerous.”
10. Don’t whitewash. Good public relations doesn’t mean manipulating facts or glossing over the truth in order to look good.
Good public relations involves trust building, not spin control. Analysts cite Johnson & Johnson’s handling of a product-tampering case as one of the best all-time examples of managing bad publicity. In 1982, some bottles of J&J’s Extra-Strength Tylenol were tampered with, and seven people died from ingesting capsules laced with cyanide. J&J recalled all Tylenol products and told the public not to use them, thus publicly putting customer safety before profit. Despite predictions that Tylenol would never sell again, J&J’s behavior earned the public’s trust, and Tylenol continues to be one of the top-selling over-the-counter drugs in the U.S.
Sharon Nelton has been a public relations specialist for three organizations and has been writing about family business for more than 20 years.