The “Barry O’Farrell” Lesson For People in Power

There is a salutary lesson for Tasmanian politicians as well as directors and executives of state government enterprises in the unfortunate demise of former NSW Premier, Barry O’Farrell.

The lesson is unambiguous. Do not ever discount the precepts of honesty and transparency. Apart from being wrong, it is a high risk proposition that can cost your job and destroy your reputation.

Having met Mr O’Farrell on a number of occasions, I was impressed with his sense of duty and responsibility. Unfortunately, his mistake – while not in itself illegal – carried an enormous price.

Almost every day there are individuals and organisations who find themselves embroiled in a crisis from which they cannot escape. Some survive. Some don’t. Almost none emerges unscathed.

Crisis is non-discriminatory. It can happen to anyone or any organisation – private or public – at any time, without warning. Similarly, it can take many forms. It may involve sexual harassment, embezzlement, bribery, food contamination, environmental or industrial mishap. The list is endless. But one thing is certain – no one is immune. Yet, despite the obvious danger, few individuals or organisations know what to do when a crisis occurs.

The first, predictable reaction is usually defensive, especially if the media is involved, which is normally the case. The most common response is to hide from the spotlight and go into denial. This is the wrong option. It will simply fuel the crisis as well as the potential fall-out. Reputational damage is almost inescapable.

There are two essential rules to follow when a crisis strikes.

First, gather all the facts, as thoroughly and quickly as possible. Determine the exact circumstances by finding answers to who, what, how, why and when? If you don’t, the media will do it for you, and you don’t want that!

Rule two is tell the truth, tell it all, and tell it now. This can be a tough challenge but it is critical.

If you are less than truthful with the media you can be sure they will unearth the real story. That’s their job. And they will do everything they can to expose a lie or a hidden truth. So don’t play games with the media. It won’t work.

Some lawyers, mostly those with outdated views, resist this approach arguing it could prompt legal action. They overlook the fact that an adverse finding in the “court of public opinion” is potentially far more devastating than the outcome of legal proceedings.

By presenting the facts as you know them, openly and honestly, you will help inoculate yourself from any claims of a cover-up. Consider for a moment how effective former Queensland Premier Peter Beattie was at defusing crises – and he faced plenty of them during his administration. His stock response went along the lines: “Yes, it appears the government got it wrong. And I want the people of Queensland to know I will get to the bottom of the problem and it will be fixed. If that means heads must role, then so be it. But it will be fixed and it won’t happen again.”

Peter Beattie was a Master at defusing political crises even if he didn’t actually manage to resolve many of them!

Of course, not every politician, company director or chief executive has Peter Beattie’s “gift of the gab”. So how do you prepare for the prospect of a crisis? And should you even bother?

Consider the latter question first. Most organisations see insurance as a critical safeguard against unpredictable circumstances. Fire and professional indemnity insurance are two examples. But insurance companies rarely offer policies designed to protect your organisation’s brand and reputation against all forms of crisis. That doesn’t mean you can’t take steps to insulate yourself from crisis and controversy.

The best insurance is a Crisis Management Plan, which unlike an insurance policy involves only a one-off cost as opposed to an annual premium.

The starting point for a Crisis Management Plan is a Vulnerability Audit which involves a detailed evaluation of an organisation’s potential for crisis. This is normally a revealing process and usually results in positive, management action to obviate the most likely causes of crisis.

The Plan itself establishes very clear procedures and processes for what needs to be done, how, when and by whom. It is a transparent blueprint for action that delivers both an effective and accountable response.

The final question is, can you afford to ignore the need to protect yourself from major, adverse controversy and the consequences that stem from an ill-managed crisis?