Is a muzzle the best tool for effective crisis communications?

Surprisingly, it certainly seemed to be for Dick Grasso, the former CEO of the New York Stock Exchange. According to the current issue of PR Week, Grasso proudly claims that his four-year long crisis communications strategy (created by counselor Eric Starkman) was to hang low and completely shut down any interviews or communications with the media. That is, with the exception of one well placed op-ed piece in the Wall Street Journal that stated Grasso’s position on the entire matter, mum was the word.

It’s hard to argue with his strategy based on the outcome that transpired. On July 1, a New York State appellate court decided that Grasso could keep the entirety of the $139.5 million retirement package he was given when he was fired in 2003.

This interview brings to light an important point that no crisis counselor should ever forget. We should never take our eyes off of the real objective with any litigation or crisis. Too often, I see that either no real objective is set or instead a number of them go back and forth in order of importance, often blurring together what the client really wants to maintain, win or contain out of the crisis. By understanding this clearly, a strategic plan can be developed with complete consistency and aim towards delivering that goal.

And, that’s what Grasso did. Don’t get me wrong, he took a HUGE chance by going this route. His main goal was to win this trial and he believed that regardless of what was said/written about him, this would happen once a court of justices heard the real facts.  According to his interview, the man was never going to settle because then it would have meant (in his eyes) admitting guilt. So, because his counselor never believed Grasso would get a fair shake with the media, he decided to use the most powerful U.S. business daily to deliver Grasso’s only communication to the world.

That said, I’m sure this strategy didn’t always feel so right to Grasso. Especially, after he continued to take a complete beating month after month for being “piggish” with his absurdly inflated compensation and the reality that many assumed he was guilty because of the complete radio silence. Maybe Grasso’s case was so iron-clad in his favor that this strategy was dead on. But I have to question whether this can work most of the time. Yes, it’s almost impossible to completely control your story once it’s out in the public domain. But, those who don’t even attempt to communicate their side of it (or at least dispel rumors, gossip and false statements), are often killed in the world of public opinion. And, that does have a real impact on the success or failure of crisis management, including litigation.

Grasso may have won the war, but I still think he lost the image battle by accepting the entire package that was rightly awarded to him. Since he’s a private citizen now, maybe it just doesn’t matter. But, most companies and individuals cannot afford to use the muzzle approach because too often winning small battles are key to being triumphant in the war. Most often, reacting swiftly and strategically to minimize public outcry is the way to go.   

Comments

[Eric Starkman]

Ed:

Please allow me to expand on my comments to PR Week as we appear to be very much in agreement.

As I noted in the interview, I certainly don’t recommend the “no interviews” strategy we took across the board. It was a rather unique situation requiring an equally distinct PR approach.

Giving a reporter an on-the-record comment adds credibility and extra story inches to the story which, as you know, is not always what you want to do -- especially in a crisis situation. That said, I did speak with reporters assigned to the Grasso story on a near-daily basis and knew in advance where they were going with their stories. The vast majority of their inquiries were simply undeserving of comment beyond the positions outlined in the op-ed, so obvious was their collective, entrenched bias against Mr. Grasso.

For what it's worth, I draw your attention to a blog post of mine on the merits of declining to comment on stories, an amazingly common practice of those who work in the media.
http://www.starkmanassociates.com/blogs/eric/stifle-yourself/

Thanks for your interest.

Eric

[ed]

Eric,

Thanks for you comments.

You make a valid point about speaking to reporters on a regular basis to understand exactly the mood and context of the situation. I neglected to include that part. But, it is important.

I think we are in total agreement. This case involved very unique circumstances. Congratulations on the good work.

Ed

[Jonathan Bernstein]

Risking redundancy, I also agree that Grasso did the right thing...IF his goal was, indeed, simply to win the legal battle, regardless of damage to his image. In most situations I work in, those priorities are more balanced or even sway in favor of the court of public opinion -- understanding, as Arthur Andersen did not, that the court of public opinion can put you out of business long before you resolve matters legally. Still, Grasso's situation was unique and if he never had to work for another organization again, he wouldn't exactly be flipping burgers.

Nice blog, btw, I'll be back!

Jonathan Bernstein
President
Bernstein Crisis Management, Inc.