At the onset of inquiries
into Martha Stewart’s possible insider trading, the
public response was somewhat evasive. How many times
have we seen a crisis mushroom because the company or
individual involved failed to take decisive action?
There are at least two rules
to remember when handling such accusations. The first is
to immediately analyze a crisis situation and begin
working to get public opinion on your side.
The second is to tell it
all, and tell it fast. Government attorneys claim they
have caught Stewart in a lie, and have included that lie
as a basis for several indictments against her. They are
claiming that although her original actions were bad
enough, those transgressions were compounded by her
failing to take subsequent responsibility.
Only when it became clear
that she was going to be indicted and face criminal
charges did Stewart take a more proactive approach,
placing a full-page ad in USA Today and creating a Web
site dedicated to telling her side of the story, perhaps
A proactive public relations
strategy should be employed at the first hint of
scandal, so that you can blunt any ongoing rumors and
allegations. As a top media industry personality,
Stewart could have easily told her story numerous times
over several types of media – without needing to pay for
advertising, which is a less credible communications
medium. Television shows, radio shows, newspapers – just
about anyone would have loved to interview her and hear
her side. Instead, she dodged when the subject was
broached during a TV morning show appearance.
When you’re high-profile and
an allegedly innocent victim, you can take the fight to
the prosecutors, instead of being placed in a defensive
posture that serves no one well. By keeping a low
profile and avoiding comment you only reinforce a
perception that there may be fire behind the smoke.
One approach to consider
would be to say you inadvertently made a mistake, you
were not clear on the specifics of the situation, and
that you will take responsibility for what happened.
What if Stewart had said, “Yes, I heard that there would
be problems with ImClone and that it would be a good
idea to bail out of my position.”
Maybe a slap on the wrist…a
fine that would have been easily paid…or perhaps some
probation. A week’s worth – if that – of rough media
coverage, then back to business as usual. Instead, she
has now lost her position in her company and is facing
possible prison time, a felony record, huge legal bills,
and a trial that is already being billed as the largest
legal spectacle since the O.J. Simpson case.
When it comes to a crisis,
consider consulting a public relations expert (who may
possibly tell you things you may not wish to hear)
rather than getting PR advice from your lawyers.
This access to targeted
information will become very important to companies
wishing to disseminate their news and information.
Instead of issuing mass press releases, businesses will
need to determine where their audiences access this type
of information and how they can get their news in front
of those audiences.