FRIDAY 8 JUL 2011 9:31 AM

CRISIS AT NEWS INTERNATIONAL: THE EXPERTS’ VIEW

For those of you who’ve been on the moon for the last seven days, here’s the news.

News International is in the mother of all crises. On Monday, the News of The World phone-hacking scandal escalated with the Guardian reporting that the mobile phone of Milly Dowler had been hacked soon after her disappearance. Subsequently, it was reported that the parents of Holly Wells and Jessica Chapman had been targeted, as had the families of those killed in the 7/7 London bombings and servicemen and women killed in Iraq and Afghanistan.

A public outcry ensued. The News of The World was attacked in Parliament, in the press and on social media. It haemorrhaged advertisers.

Yesterday, we asked three crisis, reputation and communications experts to give their views on how News International had handled the crisis so far and what it should do.

Scott McLean, director Speed Communications

News International's biggest failing is that it has been permanently on the back foot, trying to contain the uncontainable. It's clear that if it does understand the depth of the phone hacking by NOTW journalists or those in the paper's employ, then it has failed to plan adequately for how it would respond.

This week, things have become so bad that the News International brand is taking a hammering. There is a real commercial risk that other titles could be affected and that the contagion could spread beyond News International to the parent company. Then Murdoch might be in the territory of shareholder unrest and not just dealing with the damage it could do to the BskyB takeover bid.

So it's time for NI to get on the front foot and not just sack Wade to go but potentially go so far as contemplating more radical intervention up to and including shutting the entire NOTW down.

[Ed – Note that these comments were received before the news broke yesterday of News International's decision to close the News of the World. Respect!]

Jonathan Hemus, crisis and issues management director, Electric Airwaves

Corporate culture can have an enormous effect on the likelihood of a business suffering a crisis.  Comments from ex-News of the World journalists indicate that reporters were under enormous pressure to come up with the next scoop, whatever it took.  This would likely lead to an atmosphere where the end result is all that matters: this is exactly the culture in which crises can flourish.

Add to this the fact that the News of the World appears to be suffering from denial and you have a toxic cocktail.  Its initial statement that widespread hacking had not taken place has been thoroughly undermined by subsequent developments.  This leaves it lacking in credibility and appearing to be either incompetent or disingenuous in making the initial claim.  The lesson for other businesses is never to make assertions unless you are 100% certain of their truth. Ignore this, and serious reputational damage will inevitably follow.

The News of the World is facing a crisis of its own making, created by the behaviours of its own employees.  A self-inflicted crisis such as management fraud, unethical behaviour or sexual harassment is always more difficult to manage compared with an external event such as an accident, natural disaster, or even terrorist attack. Nevertheless with swift and decisive crisis management, reputation protection is not impossible.

Unfortunately for them, the News of the World has failed to apply effective crisis management to the phone hacking saga: the crisis seems to have managed it rather than the other way round.  Successful crisis communication is about recognising a problem quickly; taking decisive action to address it; and communicating pro-actively to stakeholders to protect relationships and reputation.  News International appears to have failed on all counts.

Eddie Bensilum, director, Regester Larkin

This is clearly an extraordinarily complex reputational challenge with a wide range of critical stakeholders all of whom have quite different concerns and needs, and of course the legal implications will have a significant impact on what can and cannot be said publicly. On that basis I have restricted my observations to two points of best practice.

The first is a scenario plan. One of the first tasks for a senior management team in a crisis is to scenario plan - to map out the best, most likely and worst case. And then to take that worst case scenario and consider not just what can be done to prevent it from developing, but just as important, to think about how the organisation would respond if the worst did happen.

Absolutely key to this process is to consider the situation not just from your own point of view, but from the (potentially very different) perspectives of all of your stakeholders – be they customers, employees, shareholders, regulators, competitors or government.  Putting yourself in your stakeholders’ shoes – thinking about how they might perceive the situation and your handling of it – will help to inform a robust reputation management strategy.

The second is simple: be seen to do the right thing. In the response to any crisis, the priority of management must be to ensure that the organisation is both doing ‘the right thing’ and being seen to do the right thing. If there is a gap between what you say and what you do, this will inevitably lead to a breakdown in stakeholder trust.

Recent revelations have further intensified the need to communicate how the company feels and what it is doing. This week the present NOTW editor is reported to have told staff that the public’s anger was provoked by “past actions under a different regime” – the challenge for News International is how to visibly demonstrate that message to stakeholders.