PUBLIC RELATIONS IN CRISES

CHAPTER 16

PUBLIC RELATIONS IN CRISES

MICHAEL SITRICK

ABSTRACT

This chapter addresses communications in times of crises. Several principles are

outlined and illustrated. These principles include telling the truth, organizing the

facts, focusing of messages, using irrefutable sources of facts, taking control of

communications, getting help for communicating, and maintaining consistent

messages. Extensive vignettes and case studies are used to illustrate these

principles.

PROLOGUE

I had just come back into the office from a meeting when my intercom rang.

“Mr. Sitrick, Mr. McNealy would like to see you right

away,” my assistant said. Mr. McNealy was the Chairman of the

Board and Chief Executive Officer of Wickes Companies, an

organization I had joined just nine months earlier as head of

communications. When I got to Mac’s oftice, he asked me to

close the door and join him at hs conference table.

“Mike, you are one of only three people in the company

outside of the Board who knows this at this point, but I have

decided to resign as Chairman and CEO. This is, as you might

expect, a very difficult decision for me. But with the economy

and housing market as it is, our high debt level and all of the

other pressures on the company, Wickes needs someone who

can shrink and restructure the company and I am a CEO who

grows companies. So the Board has decided to bring a man in

who has expertise in ths area. A man named Sanford Sigoloff.

You, Art Kirchheimer (then the general counsel of Wickes) and

a handful of other senior people will be meeting with him this

weekend in Los Angeles.”

Great, I thought to myself. I have just moved my family across the country,

given up a job I would have had for life and now the man who hired me - in fact,

Entetpr-ise Tr-uns forniation: Under-standing and Enabling Funduniental Change

edited by William B. Rouse

Copyright XI 2006 John Wiley & Sons, Inc.

332 Enterprise Transformation

likely much of the management team I had joined - is leaving or will be replaced.

My first thought was, ‘‘I wonder if and how long I will have a job.”

Wickes had grown from a small lumber company in Saginaw, Michigan to

one of the 50 largest companies in the United States. Through a series of very

aggressive acquisitions, it now had 3,200 retail stores, 100 manufacturing locations

and something like 60,000 employees. Its businesses included supermarkets, drug

stores, home improvement stores, lumber stores, and women’s clothmg stores - to

name just a few - as well as automotive parts, manufacturing plants and tool and

die operations. It had $4 billion in sales. That was the good news. It also had a

crushing amount of debt, was heavily dependent on the housing market which was

in a horrendous depression at the time and was losing millions of dollars a year.

Having gone through one transformation - growing from a small regional

lumber company into a massive conglomerate - Wickes now had to go through

another, more painful transformation: it had to find a way to reduce costs, turn

losses into profits and shed its debt.

After three weeks of intensively reviewing financial and other data, flying

across the country to tour facilities and meet with employees and managers of the

various operations and digesting all the information, it was concluded that the only

way to preserve the assets and save the company was to put it in Chapter 11, a

bankruptcy reorganization.

It was clear that change was needed - not only in the structure of the business,

but in the way in which it was run. People had to change the way they thought, as

well as the way they acted. This is true in the major transformation of any

enterprise. Unfortunately, getting people to discard former behaviors can be

difficult - especially when the old way of doing things is well-engrained,

comfortable, secure, and convenient.

INTRODUCTION

Welcome to the world of enterprise transformation (DiNapoli, 1991, 1999). As

Niccolo Machiavelli pointedly observed in his book, The Prince, “There is nothing

more difficult to undertake, more perilous to conduct, or uncertain of success, than

to lead in the introduction of a new order of things.” The difference between

success and failure in the introduction of a “new order of things” is often the

presence or lack of effective communication by the leader seeking to affect the

transformation of the enterprise.

In its simplest form, such change can be broken down into three sentences:

rn

rn

I want you to do something.

I want you not to do something (or stop doing something).

I want you to let me do something.