I decided to take up the story not to throw stones at Burson or Facebook, but to try and draw some lessons that could serve all of us in the industry better; that could raise us all up and help us to adhere to a higher standard for the sake of the industry’s reputation.

What happened was a clear breach of professional PR ethics. According to reports, such as this one on Powerwall, two Burson flacks, one a former tech reporter and the other a former political reporter, were trying to get journalists to investigate negative stories about Google. One of the flacks had gone so far as to suggest to a blogger that he would help pen anti-Google opinion pieces for him and help get them published under the blogger’s name in the Washington Post, Huffington Post, and other high profile publications.

What blogger could resist an offer from two former hacks offering to write and get stories published under your own byline in leading publications?

An ethical blogger, apparently. Who would have thought one existed? Well actually anyone engaged in and working with social media. You’ve got to wonder about the talent in the PR industry these days given the antics of the two Burson buffoons involved in this fiasco. But that’s another story.

I love the power new media gives to every one of us to keep everyone else honest. The blogger published the emails between the Burson bumblers and him online for the world to see. Other media that had been approached by the flacks picked up the story and began investigating; eventually The Daily Beast connected the dots. The rest is history: Facebook denied it knew anything about it; Burson blamed Facebook for asking their flacks to do it; Burson then said sorry… but then, get this, Burson deleted critical comments from its Facebook page. I wonder what Perception-is-Reality-Harry thinks about the crisis management approach taken by the company he founded.

So what are the lessons we can draw from this? And what are they for PRO’s in China specifically?

The first lesson of course is that we shouldn’t do unethical things just because the client asks us to. The client isn’t always right and sometimes it is better to just walk away from the client than get dragged into the mud by them. As two former journalists the Laurel and Hardy (“this is another fine mess you’ve got me into”) duo of Burson buffoons should have known better: How would they have felt if a couple of PR flacks had approached them with a smear campaign when they were reporters?

A few years ago I was approached by a “management” consultant in Beijing who asked me to run a “Black Ops campaign” (that was the term he used) against a competitor of one of his clients. I don’t know whether his client knew what it’s consultant was doing or not – hopefully not – but I declined the “opportunity”.   I told him point blank it was unethical and beneath me to engage in such activities regardless of the lucrative fee he was offering. Presumably in a market where smear campaigns are de rigeur (remember the Mengniu smear campaign against Yili last year?)  he found someone else willing to take up the cudgels of creepy-PR.

China unarguably is an ethical quagmire when you consider the euphemistically named “transportation fee” and “hong bao” through to the out-and-out bribes that are sometimes paid to get favourable stories published for clients. While we all unhappily swim in the sea of hong bao it really is time the industry and CIPRA (the China International Public Relations Association) enforced a code of ethics aimed at ending this pernicious practice.

Lesson number two shouldn’t even require re-learning, but evidently it does. It is that you cannot get away with underhanded PR any more. Smear campaigns may have worked in the old days but they cannot succeed in the age of the Internet, blogs and micro-blogs. We are forced to be fully transparent and that means we have to be uncompromisingly honest in how we conduct public relations. This is the age of naked PR. There is no way to cover up or hide given the democratizing power of the blogosphere.

Burson has said it will not fire the two flacks responsible for the crisis it is now facing; instead it will require more training on ethics for its staff. We’d all do well to revisit our companies’ codes of ethics and to reinforce those codes with appropriate training. This scandal does not reflect well on our industry and we all need to take better care to protect its reputation. Honesty in PR please! Black Ops is best left to the CIA and military special forces; it has no place in business.

You’ve got to wonder what the bean counters at Transocean were smoking when they took the decision to award five senior executives nearly US$900,000 in bonuses, 25% of which were for achieving the “best year in safety performance”. It certainly leaves you wondering what would constitute a bad year  if 11 dead and a massive oil spill that ruined the lives of millions in the affected states around the Gulf was a “a best year in safety performance”  for the company. Anyone thinking of a career in offshore oil exploration and development would be well advised to avoid Transocean given that statement.

To suggest safety performance was a factor in the wake of the Deepwater accident was reputational faux pas of incomprehensible proportions. You’d think someone sitting at the table when the decision was being made would have said “we’re going to look really stupid when this gets out”.

Or maybe they thought it wouldn’t get out as it was only mentioned in the company’s annual securities filing documents.

Who’s running Transocean? The bumbling yet bubbly 1960’s sitcom character Gomer Pyle? Surprise, surprise: Who would have thought that after a disaster like the Gulf of Mexico spill the media would be scouring over every document churned out by any of the companies involved? Well your average 12 year old would probably have worked that out, actually. But not the five Transocean executives who got the bonuses or the group of faceless bean counter geniuses who awarded them.

And what did they say in the filing documents? They said “Notwithstanding the tragic loss of life in the Gulf of Mexico, we achieved an exemplary statistical safety record”. That is some spin-doctoring there. That is tantamount to Col. Gadhafi saying “Notwithstanding imprisonment and torture of political dissidents, Libya is an exemplary democratic nation.”

Transocean may have not committed reputational suicide with this blunder. But it has certainly shot itself in the foot.

The executives who received the bonuses and then (subsequent to the media and public outcry and ridiculing) decided to give the proportion for the safety achievement to the fund for the families who lost loved ones did the right thing – in the end. But Transocean should not have awarded its executives bonuses that comprised a safety component in the first place. Indeed, it had set the precedent for not doing so in 2009 when it withheld all executive bonuses following the deaths of four workers. It seems that two years on – and despite a greater tragedy – the company suffers from hubris.

The fact that such bonuses were awarded this year suggests the company is in desperate need of a management overhaul to put it back in touch with reality.

Pudong - rose from mudflats to space age metropolis in a decade

You better believe it when China says it plans to create the world’s largest mega-city in its southern province of Guangdong. Not because China has the population to do it; but because it has the will to do it.Thirty years ago paramount leader Deng Xiaoping ordained a major city should arise from a fishing village in the south of China as a direct rival to free-wheeling, capitalist Hong Kong; and today the city of Shenzhen, with its own stock exchange, stands across the bay from Hong Kong where the fishing village once stood.

And a little more than 20 years ago I remember visiting China with an Australian political delegation and laughing at an ambitious plan to build a metropolitan business district on the east side of the river in Shanghai. We had been taken to what can best be described as mudflats where a single demountable building stood.  Inside that demountable was the model of the cityscape that was to rise from the mud. The group I was with boarded the bus for the long drive back to Puxi (then just plain old Shanghai) – a long drive because there was no bridge or tunnel connecting the two sides of the river then. But within 10 years of that visit Pudong arose and now stands as a major business district, not just in China, but in the Asia-Pacific region. It’s success was pre-ordained by the government of Shanghai – then led by Jiang Zemin and Zhu Rongji, who went on to bigger and better things – including the construction of the Three Gorges (mega) Dam despite the opprobrium of Chinese and international environmentalists, archeologists, anthropologists, historians, civil engineers – well just about everyone who could think of reasons to damn the dam.

So don’t doubt the Chinese will to achieve whatever it sets out to accomplish. Mega-cities, mega-dams, stealth fighter jets, aircraft carriers are all achievable if ordained by the government.

It’s hard to believe that China is planning to create a mega-city of 42 million people at a time when Australians are stressing-out that its main cities will double in size in 40 years. While Aussies are complaining that this will place a significant strain on limited resources, the Chinese see a mega-city as an asset because it will improve infrastructure and create greater economic efficiencies. The cities and towns that will be pulled together into one mega-city already account for around 10% of Chinese GDP. If their efficiencies can be further improved this region is expected to remain a powerhouse of the Chinese economy for a long, long time. And economic advancement leads everything else in China, such as the environmental and social impacts. In fact you can probably bet that those impact studies don’t really factor here.

Leaving aside the possible environmental impact, a real downside of the plan is what might happen to the local culture and language of the region. The mega-city is likely to see regional accents of the local dialect of Cantonese homogenized at best; but more likely Cantonese, which is currently only spoken by around three percent of mainland Chinese, will eventually disappear as migrants from other regions of the country flood into the mega-city in search of jobs and better lives. Already, fewer taxi drivers and wait staff in restaurants in the region speak Cantonese. Just last July the region saw demonstrations by locals concerned at the risk Mandarin posed to their local dialect after it was announced that Mandarin should be used in all TV and radio news broadcasts, even on Cantonese television stations. Perhaps social tensions will rise in the region as the mega-city is pulled together.

But social tension has not stopped China’s unstoppable drive in the past, either under the old emperors or the new ones. Rest assured the mega-city will rise on the paddy fields of southern China because the Party wills it.

While you might want to think twice before you engage him, his piece is nonetheless good because the article is text book stuff and provides a good overview on what you should do to prepare for a crisis in advance of one. Of course, BP found itself in very deep do-do very quickly and you have to wonder how much of the real work had been done prior to the crisis. As I’ve noted in previous posts on this blog and other articles elsewhere BP had developed a lackadaisical culture on safety and environmental issues over a number of years. The company was far from being exemplary on safety issues let alone crisis management.

But Chapman’s text book piece is worth reading because too many companies still hope to get by on a wing and a prayer when it comes to crisis management. Only yesterday I had a discussion with senior executives of a company who are dealing with a simmering crisis in China. Fortunately for them the crisis is still under the radar and they have time to prepare. So I advised them on the steps to take from developing a stakeholder map, to messaging and training the company spokesman (who was yet to be appointed). In the end they decided this was a lot of work (and money no doubt) as the crisis may not become public. So they adopted a “wait and see” approach on the matter. Companies like that really need to read Chapman’s piece.

To summarize Chapman’s key points:

1. Crisis readiness “is an everyday investment” to ensure internal responders are familiar with corporate systems and processes, something that “takes training and practice”.
2. The organization needs to be familiar with external responders and their systems and processes in order to integrate with emergency services when they arrive on the scene.
3. In an online world you cannot afford to focus solely on traditional mainstream media – you need to communicate with bloggers and social networking sites to ensure your message is getting out to everyone.
4. You can’t wait for the crisis to happen to start learning about social media – you need to be using all the platforms of blogging, video sharing, and micro-blogging long before the crisis happens so you know how to use it without coming off as awkward on these platforms.
5. You need to use modern technology – and not just email – to keep your staff, many of whom will be constantly on the move, updated on developments in the crisis. This is a mobile world.
6. Understand that you will be inundated with requests for information and interviews if a crisis breaks and you may want help dealing with it. Is there an agency you can call to handle the overflow of media inquiries? Or do you plan to run a tender during the crisis?
7. Have you got a crisis manual in place?
8. Have you trained your leaders to deal with a crisis?

Interestingly Neil Chapman distances himself and his team within BP from some of the real communications disasters the company made during the crisis; his byline notes that “we weren’t the ones advising Hayward”. A pity his piece didn’t include something on making sure the right people are in fact advising the CEO given that so much in a crisis depends on how the CEO handles it. If the communications team is not at the C-class table or the board table – it is not managing the crisis; it is merely implementing the decisions of others – probably the lawyers in the case of BP. Chapman is sadly mistaken to wear this failing as though it is a Guernsey. It is incumbent on all chiefs of corporate communication to ensure they have the ear of their organization’s operational leaders.

That aside, Chapman’s piece is good oil for any corporate communications department looking to prepare for a crisis. As this is the beginning of a new year it might be timely to stop and take stock of how prepared your organization is for a crisis. And, if you’re not sure how to do that, you can always call for help – point six above.

But it really wasn’t all that surprising as BP managed to escape a charge of gross negligence in the report. Indeed, the report has apportioned blame to BP’s partners Transocean and Halliburton as well as to the regulators. BP’s lawyers and shareholders no doubt read that to mean BP will not face the damaging law suits and payouts everyone was expecting (see, for example, The Source: BP Likely to Avoid Harshest Penalties, in the Wall Street Journal).

Does that mean BP is home and hosed?

Not quite.

There’s still more of the report to come out and we need to wait and see what is still to be said. And there is a significant voice questioning the report’s findings thus far, including the CEO of ExxonMobil, which wants to see BP (and its partners, presumably) held accountable rather than see deep sea drilling itself impugned by this issue and possibly halted.

Needless to say, everyone has a vested interest.

But the report’s findings raise some interesting questions about the crisis management systems and processes of the companies involved and of the way BP itself approached its management and communications during the crisis.

We have covered the details of the BP spill previously (e.g., BP: Timeline of a Public Relations Disaster, and Sea of Sludge Man Overboard: BP’s Hapless Hayward Loses PR War), as well as in an article I wrote for the Mercatornet website (Will Shuffling the Deck Deal BP a Better Hand?); so we don’t need to go over all the details again.

Rather, let’s focus on some of the PR issues brought up by the report. It is also timely to do so because it appears BP is shaking up its communications department at present. According to media reports at least one senior staff member responsible for media relations has departed the company and a new head of corporate communications has been recruited.

One of the criticisms that was made of Tony Hayward, BP’s hapless CEO up until recently – he too was a casualty of the crisis, exiled to Siberia – was that from the outset of the crisis he had tried to shift blame to the company’s partners on the Deepwater Horizon rig, Halliburton and Transocean. Has the presidential commission report proved him right?

Yes and No.

The report clearly says that more than one party was responsible for the series of mishaps and mistakes that led to the crisis. But that doesn’t mean Tony Hayward was right to say so during the crisis. That was a critical mistake from a crisis management communications perspective. It sounded arrogant and defensive. Hayward would have been better advised to say at that time the “company’s focus was on stopping the leak rather than pointing fingers” – something he later tried to do, but which rung hollow given his initial knee-jerk reaction.

Other mistakes in the handling of the crisis included BP pressuring victims in the States along the Gulf of Mexico to sign contracts that they wouldn’t seek further damages if they availed themselves of BP’s initial compensation payments; and Tony Hayward watching a sail boat race in the UK while the people of the Gulf were losing their very livelihoods.

It seemed as though BP’s lawyers ruled the roost and had too much of the ear of Terrible Tony. And Hapless Hayward for his part lacked sensitivity and failed to demonstrate any real concern for the damage to the environment and for the economic victims of the disaster.

BP may have avoided the charge of gross negligence in the presidential commission report that would have had it subject to massive compensation claims and payouts. But the company’s poor handling of communications during the crisis has certainly done untold damage to its reputation. Bear in mind the words of Harold Burson that “perception is reality” and you get an idea of the task BP has cut out for itself.

It is going to take many years to fix the poor reputation BP has made for itself and much more than shaking up its communications department. Through this crisis BP has made a name for itself as a text book case study of what not to do in a crisis – a case study that is likely to be in use for the next half-century. Unless of course some other corporation has a corporate communications team eager to surpass the effort of BP in some future crisis.

Communicators beware;  if the BP disaster teaches us anything it is that we should never underestimate the human potential for hubris and stupidity – conditions that tend to go hand-in-hand. I guess that’s what “human error” means when it is blamed in an accident or crisis.

It might be time to take stock of how prepared your company is for a crisis lest the walls come crumbling down around you, BP-like.

The TV interview followed the arrest in October of an executive of Mengniu dairy company and three executives from the public relations firm BossePR for fabricating stories in Chinese social media websites to create a crisis for competitor dairy company Yili. It was suggested that a contaminant in Yili’s infant formula products was causing baby girls to develop breasts – a claim that sent a panic through the market. At one point the world’s largest dairy company, Fonterra of New Zealand, which provides raw material to Yili, had to issue a statement to say their product met the highest international standards and was not a contributor of the problems being reported in the Chinese media.

The sordid affair raises the need for better ethical standards in China’s PR industry. While many are looking to laws and regulations to do that, there is an argument for better standards to be maintained by the industry itself. While the industry in China is still struggling to define itself, the International Association of Business Communicators (IABC), which is striving to establish a presence in China, might help fill the professional development void. Here’s a link to a column piece on the issue that I wrote on IABC Beijing’s website last month.

And, for an important disclaimer, I am a member of the IABC Beijing Organising Committee. My vested interest is to see better ethical and professional standards in the PR industry in China. If you share this interest please join IABC China, or at least attend our events in Beijing and Shanghai to find out more.  Here’s a link to the IABC China website, where you can find some relevant information about the organisation and upcoming events.

It started with a mad dash this morning to the Bloomberg offices in Finance Street all the way over on the West side of Beijing in Xicheng District (of course). It took 45 minutes to get there and another 45 minutes to get back and all for what probably amounted to three minutes of live air time. I was to be interviewed on the risks of doing business in China ala my interview with The Australian newspaper the other day on the same subject (see the story here). But it changed almost at the last minute to the issue of the US geologist who has been jailed in China for stealing “state secrets” (see the Wall Street Journal article on it here).

Bloomberg’s very professional journalists are to be credited with the fact that they did give me warning of the change and ask if I was alright with it. I was in agreement because the whole issue of state secrets is one of the risks of doing business in China – and that was the point I wanted to make. It is such a gray and all encompassing area that it seems Western businesspeople need to tread very carefully if they are not to get ensnared in a trap. The journalist interviewing me wanted me to give a definition of “state secret”, something I’m not even sure the Chinese government can give – or indeed wants to give. I tried to point out the definition is probably deliberately vague and that companies need to be aware of this when they are trying to do business in China, particularly in sensitive areas like oil and gas, or commodities trading. I rather suspect my answer wasn’t sufficiently glib for the reporter as I tried to explain the nuances and so he cut the interview shorter than the 10 minutes I had anticipated. I can only imagine that the viewers of Bloomberg TV – stock and currency traders – also prefer glib responses. That might explain why those markets fluctuate so violently on a minute by minute basis: the world is managed by kids on roller-coasters – of their own making.

I had expected better of the world’s leading financial news service.

But there are other ways to get the message out. I received an email today to tell me I have been listed on the International Association of Business Communicators’ speakers bureau, as an “IABC Recommended” speaker. The recommendation followed a speech I delivered at the IABC Asia-Pacific Regional Conference in Hong Kong in May. The speech was on reputation management in China and received rave reviews from the audience. The IABC is of course an organisation dedicated to the professional development of professional communicators – people in PR, advertising and marketing – around the world. To see my listing on the IABC website, click here.

This is the second speakers bureau to list me. The other one is China Global Speakers. But I should probably mention that I own China Global Speakers – full disclosure. I guess that makes the IABC listing more objective. And at least they have the speaker ratings as a reference. But I’m happy to be booked through either bureau. I cover a range of topics on public relations, reputation management, crisis management, and China business issues – except of course anything that might be construed as a State Secret, whatever that is. And that’s on the record; I think.

Chinese-Australian entrepreneur Matthew Ng is not the first Chinese-Australian to be arrested on charges of business or economic crimes. In the 1990’s James Peng languished in a prison in the south of China for some six years despite having politically well connected business partners; perhaps because of those very connections. More recently we saw Rio Tinto executive Stern Hu arrested, tried and sentenced to 10 years in prison.

Therefore, Matthew Ng is unlikely to be the last Australian businessperson in China that will find him or herself somehow running foul of the law.

I will avoid commenting on the guilt or innocence of all of these men as I simply do not know the facts of the specific cases or the intricacies of Chinese law.

But Australians, both here in China and back home in Australia, working themselves into a lather over this latest issue are missing the point.

China is a risky place to do business. The legal system is different. You can be locked up here while the police conduct their investigation. You do not get the benefit of the doubt. You are not presumed innocent until proven guilty but rather guilty until proven innocent.

Australians crying that their fellow citizens should be treated fairly in China are mistaken. Australians are being treated fairly in China because they are being treated exactly the same way Chinese are treated under Chinese law. It is absurd to suggest that Australians should be treated differently.

Chinese law will take its course. Australians cannot expect special treatment for their fellow citizens simply because they are Australians.

Being considered guilty until proven innocent may be distasteful to us, but it is the way the law works in China just as it is the way the law works in many West European nations and Latin American nations.

Rather than getting worked up on how Chinese law works, Australians and other foreign business people need to take extra special care because the system is so different to what they are accustomed to. As I said to The Australian newspaper on the subject of Matthew Ng, in the article “Hidden risks of doing business in China” of 30 November:

“Such cases highlight how carefully one needs to tread on this unfamiliar ground, and the need for getting good, solid legal and accounting advice when doing business here, and making sure everything is on the level. Everything. At the same time, be leery of the China hand who tells you that you need to do things the China way.”

As I’ve said on previous occasions: “When in Rome, follow the law damn it!”

The lesson of the Matthew Ng, Stern Hu and James Peng cases – irrespective of the innocence or guilt of each of those men – is that foreigners in China need to take extra special care to ensure they do not fall foul of the law. I imagine a Chinese prison is not a particularly salubrious place to spend time while trying to prove your innocence.

A summary of my comments can be found on the China Global Speakers website, by clicking here.

The full panel discussion on CRI’s Beyond Beijing program can be listened to here (select Hour 1 to hear the panel discussion).

We’ve also added a new poll at right, asking whether Western nations have legitimate concerns about Chinese companies involved in M&A deals in their markets or whether the concerns are driven by xenophobia. Take a minute to let us know what you think by voting in the poll.

The mêlée on China’s social media platforms was due to Rui positioning himself as a journalist representing the whole of Asia after President Obama had called for questions from journalists of the host country of the meeting, South Korea. In the absence of Republic of Korea journalists raising their hands to ask a question, Rui quickly stepped into the breach to ask his question “as a representative of Asia”. Chinese bloggers and tweeters have been asking on what authority had Rui put himself forward as a representative of the whole of the region.

Some commentators also questioned whether Rui could claim even to represent China, saying he didn’t represent them.

The debate around the incident has focused on Rui’s aggressive  journalistic style that often comes across as arrogant within a culture that prefers harmony and humility to confrontation. However, various polls taken during the course of today by a number of Internet portals in China showed support for Rui was running at between 80 and 90 per cent.

But one has to wonder how Rui’s claim to represent Asia might have been perceived in other quarters of the region. Indeed, Tokyo has been locked in a diplomatic tussle with Beijing since a Chinese fishing boat collided with a Japanese naval vessel near the disputed Senkaku (Diaoyu) Islands last month – an incident that has triggered nationalistic demonstrations in both countries. South Koreans might also prefer not to have Chinese journalists claiming to represent them as China has chosen to sit on the fence over a North Korean submarine’s sinking of a South Korean naval vessel earlier this year. Vietnam and India, both of which have border disputes with China, are probably not too keen on Chinese journalists speaking for them.

Poor, misunderstood Rui says he didn’t mean his comments to sound arrogant or as though he was speaking on behalf of the whole of Asia.

But imagine what would happen to an American journalist that might have the temerity to suggest he represented the whole of the West; or a French journalist that claimed to represent the EU.

Several years ago Rui’s legitimate complaint about a Starbucks outlet in the Forbidden City created something of a nationalistic storm against foreign companies in China among netizens. While Rui later pointed out that he was not anti-foreign and hadn’t intended to stimulate an anti-Western wave, the reality is his language on the issue had fed exactly those sentiments.

We will probably never really know whether Rui intended to feed anti-foreign sentiments previously or whether he was trying to ride roughshod over his counterparts from the rest of Asia at yesterday’s press conference. Regardless, it’s time for Rui Chenggang to act with responsibility more befitting his profession. In the interests of better journalism, Rui should think through his questions and comments more carefully before speaking. If Rui Chenggang has been misinterpreted, as he claims, it is his own fault; indeed, it shows he is a poor journalist and communicator. It’s time Rui Chenggang lifted his game.