Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

COMPUTER BUSINESS: Proactive PR Is Way Through Bad News

Last week, IBM was forced to rush out a statement denying that it is quitting the Russian and CIS markets and that it is determined to fulfill all of its contractual obligations. A story run by Interfax initially made these claims quoting an anonymous source at IBM. The story was then subsequently repeated by the radio station Ekho Moskvy and the news agency RosBusinessConsulting. This is now the second time a major multinational has been the victim of over imaginative reporting by local news agencies. Back in September, the components and consumer electronics company Philips was forced to issue a similar statement denying that it had temporarily suspended its activity on the Russian market. In that case, it appears that an over enthusiastic scribe attributed rather too much to the closure of the Philips branded store on Novy Arbat.

In this instance, IBM was onto the erroneous story very quickly - publishing a response via rival news agency Prime-Tass. However, if allowed to go unchecked for too long (and too long should be measured in hours not days), these stories have huge damage potential. As anyone who has worked in journalism will know, usually the biggest source of leads at daily publications is not industry contacts but other publications. Not all journalists check these stories with the original source. An indication of what could happen was illustrated by the reaction of U.S. traders to the August currency crash. The value of shares in Microsoft and Dell fell significantly - the equivalent of several times the annual sales of either of these firms in Russia. Some badly managed news from Russia has the potential to wipe out the equivalent of months of hard work.

In most cases that I have seen, these scandals (sometimes true, sometimes completely wrong) almost always arise out of comments made by relatively junior employees. Typically, local journalists are unable (or unwilling) to attribute proportional weight to comments made by a senior local manager and junior employees or between a company spokesman and a disgruntled former employee. Nevertheless, however effective a company is at communicating messages to the local media, in the current economic environment it is inevitable that these kind of stories are going toappear.

Apart from reacting quickly, there are several things that can be done to avoid public relations disasters. The first is to be proactive with bad news. When a well-known company fires dozens of staff, closes a factory or shuts down a local office, people do tend to notice. If that firm does not communicate these events using its own explanations then this information is going to hit the airwaves anyway - but the picture will be painted a lot worse by the local press. When this incorrect story appears, that company is also going to be forced to admit that this information is at least partly correct.

I think being realistic when communicating bad news also helps. There are people who believe that anything written in a news release must have a positive spin put on it. But when an industry is contracting very rapidly there is often no good news to tell.

The most novel approach that I have seen to communicating bad news is an instance where a company described its restructuring process in such convoluted detail that the reader became completely lost as to what the true local impact will be among a soup of other facts. This approach is particularly clever because it takes advantage of the reluctance of many journalists to call and ask more probing follow-on questions themselves.

Robert Farish is research director at IDC Russia. E-mail: