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Big Power Needs Big PR

Posted At: October 26, 2011 1:07 PM
by Emily Diab

Today’s CEOs are under strict watch by consumers, partners and government regulators. Careful scrutiny by an organization’s most important publics can mean pure success or instant failure. These CEOs are responsible for the positive relationship with each of these publics at all times.

What’s in a leader?

A good leader possesses special qualities that stand out from the norm. Communication, self-motivation and strategic decision-making are just a few of these. Passion for the organization and its clients are special extras that make a good leader even better.

William Heyman, CEO of Heyman Associates Inc., uses his public relations experience to explain the necessary qualities to be a good leader. “[A leader] in public relations has the intangibles: confidence, integrity, high energy level, news-junkie, inquisitive, well-read, and [takes] on hard assignments,” Heyman said.

Heyman’s definition of a good leader can be helpful for certain CEOs who may not have applied such qualities in times of need. These qualities are vital in both good times and bad, and can point a leader in the direction of good decision-making. Times of economic stress and company changeover can be difficult for an organization and its leaders, but bad decisions or customer dissatisfaction can cause an uproar.

When good goes bad

A recent blog post on PROpenMic explained the frustration many people had with Netflix and its leader.

On September 18, Reed Hastings, Netflix CEO, sent a supposedly apologetic letter to his customers for recent price changes. Soon after the letter reached Netflix users’ inboxes, people started ranting. They wondered why the situation was dealt with so carelessly, and customers hoped for a better explanation. One question among customers and business analysts was, “Where’s the PR?”

Forty-eight hours later, Netflix posted two job openings for public relations managers.

Over the last few years, CEOs and other business leaders have entered the spotlight as representatives of their companies, but their goal of presenting their companies in a good light sometimes backfires. Entering the PR world without a PR specialist (or against a PR specialist’s advice or approval) has proven to be detrimental, and these leaders are now learning what it’s like to be held responsible for the downfall of their businesses.

Heyman’s intangible qualities of leadership are essential for a CEO to stand as a strong business representative, but if a leader doesn’t possess them, he or she should seek the advice of a PR professional.

“The biggest challenge these organizations confront is the difference between what is a PR problem and what is a business problem . . . these crises sometimes just stem from companies taking chances, trying to grow and provide. Sometimes by taking chances you fail,” Heyman said.

What’s wrong with this PR picture?

Netflix’s Reed Hastings faced a challenge and took a chance when choosing to make a change within his company, which turned out unfortunate for his previously loyal followers. The industry-dominating CEO made abrupt price changes, announcing the decision to customers via email. Customers and PR professionals alike were outraged at the unapologetic manner Hastings took in making the announcement.

However, analysts and business specialists believe that Hastings’ decision was inevitable. As the business market around Netflix changed, the powerful CEO made a decision that was meant to protect him in the business world.

Richard Levick, president and CEO of Levick Strategic Communications, discussed this problem.

“All markets mature. The red and white envelope changed viewing habits, but who needs an envelope? There is no such thing as a postal service. He was competing with cable television and knew Netflix was in need of a price change,” Levick said.

Levick’s theory may ring true in the world of business, but Netflix and Hastings still faced a public relations problem post-price change: an angry crowd and a bad reputation.

Sometimes PR blunders are not the leader’s fault, but he takes the blame. In the case of Netflix, the changing business of video streaming caused the company to take a financial turn, which reflected on customers’ bank accounts. What began as a business problem turned into a public relations problem, suggesting that the leadership didn’t make proper use of public relations professionals. Leaders and CEOs like Reed Hastings have gained more enemies than friends in their attempts to address customers as personal contacts, instead of utilizing a public relations professional to help them.

Public relations steps in

The job of mending a bad reputation can be tedious and hard to do. Patricia Faulhaber wrote an article stating that “the job of restoring the good meaning of what it means to become the CEO will require stamina, patience and renewed good behavior on the part of the CEO. It can and will be done with the tremendous help from good public relations practices.”

For a CEO to understand that other divisions of the company (such as public relations) are there to help is critical for his success as a leader. In a fast-paced, competitive world, it is easy for a leader to take on the responsibility of anything and everything involved in his business. However, it’s important for leaders to know that establishing rapport and trust in other divisions will help them in the end.

“The notion is that the whole is greater than the sum of its parts. The only way [to succeed] is if the people at the top let go of their responsibilities and authority and let some of the others take over some of those challenges,” Heyman said.

Although it may be difficult for a leader in charge to let go of some responsibility, sometimes it’s better to back down and let the professionals handle it.

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