13 November 2006

For want of a telephone call

For the want of a nail, the shoe was lost; for the want of a shoe the horse was lost; and for the want of a horse the rider was lost, being overtaken and slain by the enemy, all for the want of care about a horseshoe nail.
- Benjamin Franklin
For if the trumpet give an uncertain sound, who shall prepare himself to the battle?
- 1 Corinthians 14:8

Consider the irony.

Four telecom companies in Newfoundland and Labrador - Persona Communications, Bell Aliant (TSX: BA.UN-T), Rogers (TSX: RCI), and MTS Allstream (TSX: MBT) - are embroiled in a controversy involving a government deal that will likely affect their corporate bottom lines and all because the companies involved neglected two words:

Public relations.

Here's how.

Public relations is about connecting a company with the public interest. It is about gaining and maintaining public support by developing awareness, information, attitudes and behaviour.

Public relations these days is very much about an organization's reputation: attitudes over time.

And time is the key element.

Public relations professionals will you that in order to gain and maintain support, people have to know. The only way they know if you tell them.

None of the companies involved told what needed to be told in a timely way. The companies involved with government in laying new fibre-optic cables across the province waited until the end of the process - once the deal was done with the provincial government - to tell people that a deal was even in the works.

Naturally, public interest was peaked. Spending public money gets their attention anyway. And when two of the three companies behind the deal are headed by individuals with a long-standing business and personal relationship with the Premier, they are bound to wonder what's up.

The information the companies and the provincial government gave initially was limited and confusing. One company spokesperson - Paul Hatcher of Persona - described an $82 million project already underway with no mention of the federal and provincial government money involved. The government announcement added up to only $52 million.

Public comments by business and political leaders in the wake of a fire at Bell Aliant's St. John's headquarters seemed to smooth the ground for the government announcement. But, a week later, as the full scope of the project slowly seeped in the public domain, questions mounted. A week after the announcement, news stories spread across the country alleging that the public money actually came as a result of a deal among buddies rather than something that was actually in the wider public interest. [For a telecom industry/business view, see here.]

The controversy will likely be fueled in the second week by bumbling comments by the finance and business ministers as well as contradictory comments by innovation minister Trevor Taylor and Persona's chief operating officer Paul Hatcher, another Cable Atlantic alumnus.

In an interview with NTV's Issues and Answers, Taylor played up the government's purchase of fibre-optic strands for $15 million. Hatcher told the Telegram that the provincial government cash was needed to fund the expensive portion of the project, namely the sub-sea connection into Nova Scotia.

As the Telegram story put it:
More than a year ago, the consortium pitched the undersea cable to the province - they had $37 million and asked the province to make up the shortfall.
To make matters worse, while concerns about public safety were raised by the Premier himself as the deal was being approved, Taylor said this weekend that province-wide 911 service is being examined. The cost and technical feasibility of expanding broadband to Labrador will also be studied with no commitments being made at this point.

Underneath the whole controversy are allegations of unfair dealings of a government with companies headed by individuals who hold appointments to the province's hydroelectric corporation, both of whom are the Premier's former business partners.

As easy as it is to decry suspicion of politics and politicians, Trevor Taylor gave credence to this aspect of the affair by confirming that the proposal had been reviewed by cabinet at least twice in the past year and rejected on both occasions out of concern of a perceived conflict of interest. Ordinary residents of the province can hardly be faulted for wondering why a single incident suddenly erased the concerns if the politicians were worried about real or perceived conflict of interest twice before. If the deal was good now, it was good then.

To a public relations professional, that sort of suspicion - even if based on appearance rather than fact - is the most damaging. Releasing information when the proposal was first made would ensure awareness and accurate information. Tackling head-on the questions about conflict of interest at the outset would have sent reassuring messages about government and corporate sensitivity to ethics questions. Early and complete disclosure instills confidence.

For Bell Aliant's part, the issue is more one of opportunity lost. The company simply has missed every chance to deal frankly with its telecom service to the province. Its competitors have relentlessly pointed to the supposedly exorbitant cost of leasing space on Aliant's fibre-optic cables. They have pointed to increased service to the public. Aliant has been silent on the existing surplus capacity in the system and the likelihood that consumer prices will drop anyway as a result of deregulation of the nation's telecom industry.

This deal has put Bell Aliant is in a hard competitive spot anyway. It will hardly lose anything by speaking more forthrightly about how this project will affect them and their customers. On the face of it, would speaking publicly about the controversial deal make it less likely that Aliant can get the government account back or that it can win any other telecom contracts?

Bell Aliant can deal authoritatively with technical issues. The company can speak frankly about its service, costs and long-term telecom issues. By speaking openly and frankly, the company will give its consumers the chance to see - if they don't already - a company that is interested in more than the customer's bank account.

But look at it this way, as well: if early and complete disclosure instills confidence, then silence is taken as consent. Every negative comment made by Aliant's competitors about Aliant's costs and service is left unchallenged. To the ordinary consumer, that looks like an admission of guilt or fault.

To be sure, each of the companies involved has first-rate marketers handling corporate advertising. The bigger companies - like Rogers and Aliant - have competent public relations professionals on the payroll. Persona uses a well-connected and creative advertising firm in St. John's. Nothing said here is a slight to them and their competence.

What seems to be missing in this controversy is an understanding in the corporate headshed that there is more to public relations than issuing a happy-faced news release supporting the latest marketing venture. If the in-house team of general public relations practitioners lacks the specialized skills - and they are specialized - to handle a controversial government relations and media relations issue, then there are plenty of practitioners who can lend a hand.

If all you have is a marketer, understand that advertising is built on image. PR handles your reputation and a competent PR professional will make sure that your media appearances are considerably more successful than Dean Macdonald's recent foray to the local open line shows or a short-lived trip into another corporation's boardroom. [See here, here and here.]

The business landscape in Newfoundland and Labrador is littered with the carcasses of good projects that have foundered for want of some straightforward public relations support. The failures affect the bottom line, either in lost opportunities, unrecovered expenditures, or added expenses from delays. For publicly traded companies, the impact on share price - even if marginal - is still an impact that could be avoided. For all, the impact on their reputation is easy to figure out.

It might be difficult sometimes for managers to see the return on a public relations investment. But ask Fishery Products International, the Hebron consortium, IOC, INCO, Fortis and its Belize dam and now the Telecom Four about the cost of not investing in building awareness, understanding, of influencing attitudes and behaviour.

Few projects are lost irretrievably. Even if the public relations efforts were left out or botched, there is always a chance to sort out the mess.

All it takes is a phone call.