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Did HP Get Bad PR Advice?

A seat at the table. That’s how those of us in PR often put it when we talk about the role of public relations counsel in the corporate suite. Since the PR function is easily misunderstood, marginalized, or reduced to tactics, it’s a popular topic in professional circles. We want that seat, and we applaud signs that the chair is warm.

That’s why early reports that former HP CEO Mark Hurd’s ouster was the result of advice from a PR firm was so interesting. Insiders told media that a senior APCO executive urged the HP board to come clean about the allegations of sexual harassment against Hurd. The idea was to avoid the drip-drip-drip of salacious news leaks that might result from a strategy of silence. A one-day story that you can influence beats a drawn-out media orgy. And who wants to tangle with Gloria Allred, who seems to have morphed from feminist crusader to sexual ambulance chaser?

Good advice, right? Problem is, it backfired – or so it seemed. Hurd stepped down under pressure, but what was to have been a dignified exit was riddled with rumor, questions, and controversy. Not only did HP receive harsh criticism about its decision, but the tepid sex scandal, complete with 30-year-old nude photos of Jodie Fisher, played out in the media for over a week.

Worse, some HP-watchers blame Hurd’s resignation on bad counsel by APCO, charging that the firm placed political correctness over shareholder interests. After all, Fisher’s sexual harassment claim had been settled and an internal investigation found no violation of company policy. Business community reaction has ranged from public “head-scratching” to Larry Ellison’s blistering letter comparing the HP board to the “idiots” who fired Steve Jobs from Apple.

So was APCO – a highly reputable firm whose work I’m familiar with from my GCI days – overzealous in its counsel? Is the HP mess a sign that PR has somehow overstepped its bounds in the boardroom?

Hardly. First of all, media may have overstated things in saying the board followed PR advice in asking Hurd to step down. What’s more likely is that APCO advised the board to be transparent about the misconduct. The board’s ultimate decision vis a vis Hurd needs to be viewed in the context of HP’s turbulent recent history, the alleged expense account abuse, and what The Financial Times calls a “receding tolerance” for ethical failures in the executive suite.

This last has been understated in analysis of the HP decision. Reputations, both corporate and personal, are judged in light of business and cultural standards of conduct. Given the financial and ethical scandals of late, few boards can afford to look the other way when faced with questionable CEO behavior.With Hurd’s track record of delivering results, the board’s decision would have been controversial no matter how it was disclosed. 

As PR specialists, it’s our role to understand and communicate the impact of public sentiment, particularly when mores are changing. But it’s up to the board to weigh the value of a CEO’s reputation, and its influence on the corporate brand. HP’s shares may be down, but I think reputation stock just went up.

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Comments

  1. Saxby

    This seems like a bad dose of pr advice to me. This is a case of turning an issue into a crisis rather than preventing one. They needed to manage the dribs and drabs of information at the source based on settled claims and internal investigations.

    It’s just like with rumours. They should be managed based on their severity because if you tell everyone about a rumour that only 20 percent of your customers have heard, you’ve just helped to spread the negative effects of that rumour, rather than addressing the problem at it’s source and minimising the damage.

    IF the public and media were already scrutinising Hurd’s situation en masse, it would have been highly advisable to be completely open and honest in an attempt to save and reinforce his reputation and draw on the public’s empathy. In this case, he admitted to something that had already been dealt with by the proper authorities resulting in unneccessary scrutiny. Terrible advice if you ask me…

  2. Dorothy Crenshaw

    Thanks for the POV. You, Larry Ellison, and many others agree here, and you make a good point about the lack of prior media scrutiny. I think you can definitely make a case for questioning the Board’s decision to let Hurd go. But, it was going to be controversial no matter how it was communicated. I might be wrong, but, I don’t think APCO was responsible for that decision; I’m assuming it was their call to disclose the circumstances around his exit, in an effort to be transparent. It’s definitely a situation that still bears watching.

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