Ertblog

Northern Rock: did the bank's comms seal its fate?

UPDATED WEDNESDAY 30 JANUARY 2008

Disclosure: I am PR manager for one of Northern Rock's competitors

I spoke at the Don't Panic Guide to Crisis Communications last Friday (25 January 2008) in London.

My subject was how to manage communications for a crisis, especially in financial services. It's highly topical: since I spoke at Don't Panic's original event in Manchester last year Northern Rock's extraordinary implosion has made the world realise that a crisis in a bank can be just as challenging reputationally as a plane crash.

Everyone seems to have written off Northern Rock's comms as a textbook example of how  not to do it. (See the Smart agency's website for just one example.) And they've got a strong point. The north east bank seems to have been complacent and remote: the then chief executive Adam Applegarth was nowhere to be seen during the critical weekend when the world's media filmed savers queueing patiently to get their money out. (It was a very British panic: customers saved each other's place in the queue when they nipped off for a sandwich. Makes you proud to be British!)

But wait. Don't jump to blame the PR team for the failure of the business. Over that weekend, everyone wanted to know if savers' money was safe. But thanks to the limitations of Britain's savers' compensation scheme, any savings over £35,000 were completely unprotected. (And only the first £2,000 was totally protected.) So while I'd strongly recommend in most cases that companies in a crisis go out of their way to get their side of the story across, in Northern Rock's case I'm not convinced that such an approach would have made much of a difference.

In short, the PR battle was lost when we learned that the Bank of England had agreed Northern Rock's emergency loan on Thursday 13 September 2007. The four day delay before the Chancellor announced that Northern Rock savings up to £100,000 would be totally protected meant the bank couldn't give a confident, happy answer to the crucial question: 'Is my money safe?'. Northern Rock would have gained little had Adam Applegarth toured studios admitting that savings over £31,750 were unprotected. He'd have been forced to rely on arguing that it was unthinkable that the Government would allow Northern Rock to go under, risking the life savings of many north east voters. True, as it happened, but not a strategy to save your reputation.

NOTE: after Northern Rock's crisis hit the headlines, the Financial Services Authority increased the maximum compensation to £35,000. Further changes are expected.

UPDATE

The most moving presentation at Friday's event was by Heather Edwards, the head of communications at Bolton Hospitals NHS Trust.

Heather talked about the tragic deaths of three mothers and a baby in the Royal Bolton Hospital's maternity unit over a three month period in late 2005 and early 2006. The NHS Trust didn't think there was a link, but decided to launch an independent inquiry just to make sure. The inquiry confirmed that there was no link.

The Trust deserves great credit for setting up an inquiry. Some organisations would have been tempted to keep things quiet, fearing media headlines. Bolton was bidding for extra funding at the time, and announcing the inquiry could have jeopardised that bid. As the Trust's chief executive told Heather, "It's the right thing to do."

The right thing to do. So often ignored, yet almost invariably the best approach if you want to maintain a good reputation. As I told Heather on Friday, her presentation was just as moving second time around. (I had seen when we both spoke at last May's Don't Panic event in Manchester.)  Just as impressive was the way Bolton's head of midwifery personally visited the bereaved families rather than rely on an impersonal letter. The personal touch: it's still amazingly powerful even in the Facebook era.

Any advice for Gordon Brown?

After my speech, one of the delegates asked me what advice I would give to Gordon Brown. (This was the day after Peter Hain resigned as Wales Secretary and Work and Pensions Secretary.) I replied: act as a human being, not as a politician. If that sounds glib, I added that too many politicians and business people inhabit their own world, remote from the people they are supposed to serve. Small wonder they don't always create trust.

The resignation of Peter Hain is a classic example. Hain clung onto office as long as he could, damaging himself and the Labour government. It's hard to believe that career politician Hain of 2008 is the same man as young Peter Hain, who came to fame as a campaigner against cricket and rugby tours to apartheid-era South Africa almost 40 years ago.

There's much to admire in Hain's career, from the fight against apartheid through his support for Welsh devolution to the struggle for a settlement in Northern Ireland. The shame is that he didn't do the right thing earlier over the funding of his campaign to become Labour's deputy leader. People on benefit don't have the excuse of pleading ignorance if they've not disclosed income. A smart Work and Pensions Secretary would have realised in an instant that he could hardly claim greater rights than those of his constituents.

Guardian's readers' editor opens details debate

Have you ever wondered why stories in the media include irrelevant details?

The Guardian's readers' editor Siobhan Butterworth devoted her Open Door column this week to this topic. She gave the example:

' "Officers had gone to the £700,000 bungalow in West Chiltington," readers were told. "The valuation is a distraction from the story," a reader objected. She may be right.'

I agree. And I'm intrigued. Do journalists now consult estate agents on such vital topics? Do they take account of regional differences - after all, £700,000 would buy a palace in Bargoed but not very much in London. Is it the type of property or the price tag that's deemed newsworthy? Would a man's clothes merit as much interest as a woman's? (Hillary or Barack?) I think we should be told...

Ertblog: an explanation

Apologies to anyone who has been frustrated by the fact I'm now moderating comments. A month ago, I noticed an increasing number of spam comments. After a couple included unacceptable language I reluctantly decided to hold comments for moderation before they appear on site.

I'm only doing this to catch spam. Any genuine comments will appear unaltered.

On a more frivolous note, I've changed my profile photo. After two years, I thought it time to give the photo of me struggling to cycle up a very steep hill in Umbria an honourable retirement. (It also reflects my shame at not getting the bike out of the garage for three months...) 

We love 1976

Nostalgia. Wonderful thing, even if it can be as indulgent as Mississippi mud pie. So it's no surprise that the second most emailed story on BBC's website today is a piece asking whether we were at our happiest in 1976.

You've clearly got to be rather older than my friend Jo, born in June 1976, to identify with this claim. And immune to the idea that the Seventies were ten years of unremittingly bad news. (Inflation at over 20%; IRA terrorists on the rampage; cars such as the Allegro; power cuts and miners' strikes...)

But 1976 was a special year for many in Britain, thanks to the driest summer since 1772. That spring, aged 12, I celebrated Cardiff City's promotion to the old second division, made all-but-certain with a storming 2-0 win against near-neighbours Hereford United. (I was one of the 35,000 who saw that dramatic night game.) Later, I spent long holiday hours in the heatwave paddling a rubber dinghy in the river at Seaton in Cornwall. And my sister got married in a church surrounded by yellow, drought-hit lawns.

The television highlight was an early BBC fly-on-the-wall documentary Sailor, about the men on board HMS Ark Royal, which featured Rod Stewart's Sailing as its theme. Less successful, perhaps, was ITV's drama about a Labour MP, Bill Brand.

Happy days. Just don't mention the cod war, the assassination of Britain's ambassador to Ireland, the bombing of trains in London and the fact that Big Ben broke down.

Time to tackle word inflation

Apologies, this post will upset anyone who hates Lynne Truss and her campaign against poor punctuation and other crimes against English...

We've got the Bank of England's monetary policy committee to tackle price inflation - the way prices creep up while you're not looking. It's time to bring in a language policy committee to do something about word inflation: people and organisations using two words or more when one would do the job perfectly.

Train companies insist on telling us we're arriving into Leeds, which will be our next station stop. (We wouldn't get out if the train didn't stop...) E.ON's chief executive tells the BBC his company is closing out old coal power stations. Other executives talk of building out their presence in new markets. And don't get me started about heading up...

No doubt most people don't notice or care. But this kind of language is ugly and verbose. It's an example of how jargon numbs the senses: it's a barrier to communication. Anyone who communicates for a living should do better. Time to join the language policy committee...

Keegan: Nun blesses Kev's messiah status

Kevin Keegan's second coming as Newcastle United manager has earned him messiah status amongst many in the north east. Newcastle's enterprising Journal newspaper tracked down a nun, sister Josepha Matthews, to reassure the world that Jesus wouldn't be offended. She says we're all messiahs if we can raise people's spirits and give them hope.

Keegan's return was without doubt the biggest sports story of the week. I remember the days when Keegan formed a powerful striking partnership with John Toshack, which helped Liverpool FC on the road to English and European glory. Sceptics are saying that the man who blew a 12 point lead in the Premier League in 1995/96, and who hasn't watched a game of football for three years, is hardly likely to end Newcastle's 50 year quest for a domestic trophy. But after recent years of grim football and sliding league places, Keegan inspires much needed faith and hope. It will be fun watching what happens next.

In praise of National Express East Coast rail service

National Express has taken over Britain's east coast rail service from GNER. The trains are the same apart from a lick of paint but the company is offering free wifi internet access for all passengers - not just those in first class, which was GNER's approach.

This is an excellent decision. Other rail companies and hotels please follow.

In praise of the National Health Service

Britain's National Health Service is an easy target for critics.

The sheer scale of the service - a universal health service for a country of 60 million - invites sharp opinions.

So it was no surprise when the BBC's online Have Your Say column was deluged by a seas of ranters condemning the NHS as incompetent, inefficient and uncaring. Ironically, the column was prompted by Gill Morgan, chair of the NHS Confederation, who suggested that devolution has meant Britain now has four separate national health services. Having worked for the Confederation in Wales, I know that few organisations have a greater empathy for the service.

Karen and I have experienced the NHS at its best over the last few months. We're expecting our first baby in July and Karen hasn't had the easiest of pregnancies. Our GP, Dr Taylor in Chalfont St Giles surgery, is my idea of a perfect GP: caring and sensitive. We've been able to get appointments at a couple of hours' notice, which has made our lives so much easier On New Year's Day, Karen's morning sickness was getting dramatically worse and we got an appointment with the out of hours GP in Amersham.

He recommended that we go to our local hospital at Wexham Park, near Slough. The triage nurse saw Karen quickly and was lovely. (Despite suffering a very busy 24 hours caring for people who had drunk far too much on New Year's Eve.)

Karen spent two nights at Wexham, and was full of praise for the care she had received. That care was given regardless of income or health history. Yes, we had funded the service through our taxes. But we would have received the same care even if we'd paid little in tax had we been on low incomes. The NHS isn't perfect, but it's nice to know that fellow Welshman Aneurin Bevan's creation is still doing good 60 years on.

PS: just one loud complaint. The cost of car parking at NHS hospitals is a scandal: £1 an hour regardless of the time of day or night.

Happy new year - and happy birthday, Ertblog!

I was going to wish Ertblog readers a happy new year. But time went by, so I'll simply offer best wishes for Twelth Night. Along with an image of the Christmas lights in our village of Chalfont St Giles in Buckinghamshire!

New Year's Day marked Ertblog's second birthday. I didn't hold a party, but thought it would be fun to note some of the most popular posts in the first two years.

The most popular one asked what that blog phrase 'hat tip' meant.

Next, a debate about whether you should ask your prospective father-in-law whether you may marry his daughter. 

A personal reflection about the 25th anniversary of the Falklands war still features in Google's top ten results about the 25th anniversary.

Maintaining the military theme, a post about Britain's sole survivor of the Great War trenches, Harry Patch, proved popular.

Finally, the post that generated the most comment and (short term) traffic. In July 2007, I rejected Guardian columnist and director Emily Bell's attack on what she saw as the BBC's failure to maintain its impartiality. You can read that post and comments here.

Like many bloggers, I've found it hard to post regularly. As Karen and I are expecting a baby in July I don't expect things to improve in 2008, but I'll do my best!

When sorry seems the easiest word

Once upon a time, sorry seemed the hardest word for company executives and politicians to say. All manner of disasters and crises would strike without a hint of an apology.

This week Network Rail, the company that manages Britain's railway tracks and stations, proved that everything has changed. Engineering work to improve the west coast main line and lines into London's Liverpool street station overran disastrously. Travellers were left stranded. Operations director Robin Gisby gave a copybook example of a grovelling apology on Radio 5 Live on Wednesday. It wouldn't have made hapless passengers feel any better but it did leave interviewers less ammunition.

I've always said that far too many organisations - political, commercial, charitable - regard saying sorry as an admission of weakness or blame. Yet in many cases voters and customers have already decided who's guilty. They're more likely to warm to executives and politicians who show a human side and put their hands up. So Network Rail's response was sensible. But an apology will only help your reputation if you also tackle the underlying problems. Network Rail had already apologised before Christmas for closing the west coast line for an extra day. If there are any further problems, saying sorry will look like a mere ploy in the face of continuing incompetence.

PS: Today's Guardian leader contrasts Network Rail's botched operation with the Great Western Railway's extraordinary achievement in converting 177 miles of broad gauge track to standard gauge over a single weekend in 1892. Clever people, those Victorians.