Nick Freer: Pre-empting the 'vampire squid' is the only route to PR success

HOW a company tells its story and reports on corporate strategy and performance, in the worst of times as well as the best of times, can have far-reaching consequences for the business.

As the so-called "vampire squid" Goldman Sachs recently admitted in its annual report, negative publicity has become a significant risk to its prosperity – alongside economic conditions, market volatility and regulatory uncertainty.

As we come out of a year when confidence in business and its executives reached an all-time low, good communication is more important than ever.

While corporate communications was once seen as a post-strategy delivery of information process, best practice communication is now firmly focused at the sharp end of business strategy development. Making PR a business fundamental helps avoid the shock headlines in the press that have a nasty habit of sticking around in the collective memory – think for example of a chief executive cashing in shares in the week that his or her company announces thousands of job losses.

Early communication planning affords decision-makers a vision of how various stakeholders are likely to react to corporate activity and company announcements.

Whether it is the banks not plugging in to the strong feeling of the public on bonuses, car manufacturers failing to deal with customer sentiment in a timely fashion or Scottish PR agencies being paid a packet from the public purse for consultancy services, the by proxy reputation of PR has suffered of late. While bankers have become the new "fat cats" and have generated an avalanche of press coverage, companies of every size still need to spend a lot more thinking time on how their reputation is read as customers and stakeholders concentrate far more on corporate values and integrity as well as key performance indicators.

From press releases to website content, everything now needs to be written and communicated in the language of customers and other stakeholders.

Corporate reputation can be seriously damaged over a matter of days. Unfortunately, repair cannot be achieved over a similar timescale – but it can be done. Think of Standard Life prior to its demutualisation – its reputation at a nadir. But through sound management, good business performance and excellent communications Standard Life is now one of the strongest corporate financial services brands.

The organisations that lead the field in PR realise that strategy must drive communication. As one eminent industry professional says: "Lincoln said, 'Character is the tree; reputation is the shadow.' I'm afraid too many people in PR, marketing and advertising spend more time manipulating the shadow then tending to the tree."

I think most PR professionals would admit to falling foul, not infrequently, of this unwritten rule. As an industry, we need to get further in front of whatever story we have in hand.

There are plenty of good corporate news stories about in Scotland, most recently including Iberdrola's decision to establish its global HQ for offshore wind development in Glasgow and how highly rated our main cites are for doing business, but at the same time we need to face up to harder facts – investment by our businesses are at a 40-year low and much better infrastructure is sorely needed to aid recovery.

Integrating communications alongside other corporate functions like HR, finance, legal and sales is a good starting point when attempting to redress the balance. Also important is a much better appreciation of the information-sharing and social media explosion; communication is increasingly seen as two-way dialogue. Pronouncements from ivory towers create neither goodwill nor trust.

Likewise, not communicating at all can be seen as a communication in itself. Silence can be a statement in itself. If you decide not to tell your story you create a vacuum and in more cases than not your story will be told for you anyway and rarely to your advantage.

PR consultancies often describe their role over-simplistically as "getting the right kind of ink" on the page. That is not achieved without honesty, transparency and an instinct for what interests journalists and their readership. Getting the ink off a vampire squid on your corporate brand is more difficult still – and it's not easily removed.

• Nick Freer is the founder and owner of the Freer Consultancy. www.freerconsultancy.com