Monday, April 30, 2012

This is Why You Invest in Crisis Strategy BEFORE the Crisis

Penn State University hired two new public relations firms this week to navigate “corporate communications, media relations and stakeholder engagement” in the midst of one of the biggest higher education scandals in history.

Penn State has already paid $5.3 million to several firms, including Ketchum and Kekst public relations, to conduct an internal investigation and handle crisis communications, according to the university. Officials announced on Wednesday that they had retained two new firms, Edelman and local shop La Torre Communications, for the next year for $2.5 million.

“Retaining these communications firms puts us more firmly on the path toward accountability, openness and preserving our reputation as one of the world’s leading research universities,” Penn State President Rodney Erickson said in a statement released Wednesday.

Jerry Sandusky, a former Penn State assistant football coach charged with sexually abusing boys, speaks to the media at the Centre County Courthouse in February. (Alex Brandon - Associated Press)
Edelman, one of the largest public relations firms in the world, was hired by Duke University in 2006, soon after members of its men’s lacrosse team were indicted on rape charges that were later dropped, according to reports at the time.

Major universities operate much like corporations, and it is common for schools to hire big-name crisis communications firms when tragedy hits, scandal is revealed, or their reputation is at stake. The worry is that if schools don’t properly manage their message and image, they could see fewer applications, a dip in donations or an eventual fall in the rankings.

But calculated strategy when it comes to messaging and branding in a time of tragedy or scandal can rub some students, faculty and alumni — not to mention victims or those closely involved with the situation — the wrong way. That’s especially true at public universities that are partially supported by taxpayers.

Take the example of Virginia Tech in 2007, when a student gunman with a history of mental health problems killed 32 people and then himself. The university has been criticized for waiting about two hours to alert the campus that morning after two students were found shot in a dorm room. Soon after administrators sent a mass e-mail alerting students to a “shooting incident” on campus, the gunman barricaded himself in an academic hall and fired more than 170 bullets in about 11 minutes.

Shortly after the mass shooting at Virginia Tech, the university hired Burson-Marsteller, a public relations firm that bills itself as helping clients when the stakes are high. Above is a screenshot of a video of President Charles W. Steger doing a mock interview with an executive from the firm to prepare for real media encounters.
Soon after the shootings, Va. Tech hired Burson-Marsteller, a major public relations firm that was retained by Duke during the lacrosse case and has since done work for Facebook. The public relations firm was paid $600,000 to advise the university and coach the president and other officials through how to talk with the media.

Details of that strategy angered the parents of victims, many of whom have argued that the university could have done more to prevent this massacre and protect their children — and officials should take responsibility for what happened and apologize to the families.

“From day one, the most important thing to the university was their brand,” said William O'Neil, whose 22-year-old son Daniel was killed.

At Penn State, the board of trustees hired Ketchum on Nov. 6, the day after Sandusky was arrested, according to Ad Age, although top school officials had testified before a grand jury on the subject months earlier and might have known that this news could break.

Days later, Ketchum employees helped the trustees organize a news conference to announce that President Graham Spanier and football coach Joe Paterno had been removed from their positions, according to Ad Age. Neither men have been charged criminally, and Paterno died in January.
Ad Age reported that Ketchum is no longer working for Penn State, although the company would not comment on the matter. In November when Ad Age first reported that Ketchum was working for the university, the firm declined to provide any details about the relationship. Since then, Penn State has confirmed the relationship.

The new agencies are expected to provide “more transparent communications” and assist with assembling information for litigation, according to a university news release. The two groups were selected following a competitive bid process in April, and they will work closely with the university’s communications staff.

Funding for this work, along with legal defense fees and other costs associated with the scandal are paid for by insurance policies and interest the university earned from loans it made to other entities on campus, according to information posted on Penn State’s Web site. (An example is the $100 million stadium expansion by the athletic department, which the university paid for and is now collecting payments and interest from athletics.)

Thus far, Penn State has spent $5.3 million on an internal investigation and crisis communications, $1.5 million on legal defense and services, and more than $685,000 on other expenses. The university said that alumni donations, student tuition and taxpayer money will not be used to pay these bills.

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