Defending Free Enterprise from Agenda-Driven Attacks

SINCE THE COLLAPSE of Enron and Worldcom, not to mention the broader avalanche of corporate scandals, it’s open season on free enterprise. Inevitably disguised as crusades for the public good, attacks on businesses and free market think tanks are, in fact, highly orchestrated programs by a well-funded “crisis creation” industry including a loose affiliation of trial lawyers, non-governmental organizations, and select media. One of the tactics du jour is to expose the funding sources of public policy think tanks, the rationale being that corporate support equals malfeasance. The immense wealth of trial attorneys and NGOs is, of course, glossed over in favor of the hardscrabble—and fundamentally false—positioning of the common man’s David to industry’s Goliath. Don’t be fooled—the crisis creation industry is just that: a strategic business juggernaut looking for growth and self-perpetuation.

One of the challenges that businesses and public policy groups face is a naïve and outdated approach to managing crises and attacks on their survival. A brutally realistic look at the new rules of engagement is the first step in effective crisis management.

The modern public relations industry’s philosophy of crisis management is anchored in the canard that if Richard Nixon had just “fessed up” to the Watergate break-in and cover-up from the get-go, he would never have had to resign in disgrace. Nonsense. He would have been removed from office in a nanosecond. Why? Setting aside the grave legal and moral violations, Watergate was not a “communications problem” lending itself to spin-driven solutions. It was a fundamental conflict aggravated by hostile parties who didn’t have the remotest interest in hearing Nixon out.

Modern crises are not communications problems as much as they are conflicts that are conceived, financed, and prosecuted by motivated adversaries interested in the destruction of their targets. These attackers aren’t seeking to make the world a better place; they are seeking power, money, and the perpetuation of their enterprises. Whether it’s the war on terror or chronic attacks on corporations by plaintiffs’ lawyers, these are not misunderstandings that will be corrected by thoughtful dialogue. Rather, the attacks won’t stop until the attackers perceive that they are at some risk for engaging in concerted efforts to discredit their targets.

The height of fashion at the moment is the investigation of PR firms, lobbyists, and think tanks, to which a handful of media have devoted enormous resources. Perhaps the most humorous headline I came across (I wish I had clipped it) announced that Microsoft was hiring a PR firm to influence the media. Well, yeah, that’s what PR firms do.

Harper’s Magazine recently ran an expose of the APCO PR firm’s plans to promote the government of Turkmenistan by teaming with Washington think tanks. The twist was that the pitch was set up by a Harper’s reporter posing as an agent of Turkmenistan. Whether or not the nation deserves representation is beside the point. What’s noteworthy is that the exposure of advocates and their techniques is now a bona fide reportorial beat. The same holds true of coverage of how enterprises are mismanaging their affairs.

During last February’s JetBlue debacle, in which thousands of passengers were stranded during a blizzard, I was interviewed on a cable television show. The interviewer asked me why JetBlue was “getting such bad PR.” I answered: “Because you keep inviting guests on your show to ask them why JetBlue is getting such bad PR.” In other words, the media have an active investment in making certain that embattled targets remain embattled. Why? Because otherwise there is no story.

This is not a conspiracy as much as it is symbiosis. A loose affiliation of like-minded plaintiffs’ lawyers, issue-specific activists, NGOs, and journalists collaborate to expose the misdeeds of free enterprise.

Fair enough. However, there is comparatively little coverage of the crisis creation industry. My firm, which primarily represents businesses under media attack, routinely finds itself battling well-funded “independent” studies by NGOs that inevitably conclude that our clients’ products are endangering the public welfare. These studies are almost universally treated as being credible by the mainstream news media despite the suspicious role that trial lawyers often play in fanning the flames. However, when we retain, say, a toxicologist—for a fraction of the cost of the study—to help refute damaging allegations, our efforts often find themselves on the receiving end of an expose by powerful media seeking to link our advocacy with malfeasance of some kind.

What to do? It’s hard to combat the narrative locomotive equating free enterprise with dirty deeds. It’s especially challenging given the rise of what’s being called “corporate social responsibility,” campaigns whereby corporations demonstrate their commitment to making the world a better place. These are noble efforts in theory, but in practice they often amount to apologies for capitalism, which can backfire.

British Petroleum, for example, spent roughly a quarter of a billion dollars to promote the company as being an alternative energy outfit, operating with the motto “Beyond Petroleum.” (BP, get it?) The problem is that BP is, almost exclusively, a petrochemical company. Environmentalists rightly saw through the charade, Greenpeace giving BP a tongue-in-cheek award for “best impression of an environmentalist.” Moreover, its socially responsible pose didn’t do BP much good when crisis after crisis hit the company in 2006 and 2007.

Companies and think tanks under attack must first reject the notion that it is somehow immoral to defend one’s self. The whiff of apology that belies modern damage control buys you nothing when professional attackers are at work. After all, when Plato issued his “Apologia” for Socrates, he was engaging in a spirited defense, not saying he was sorry for anything.

Enterprises must learn to push back against their critics by taking a page from Ronald Reagan and “wrap every argument in a principle.” No one sympathizes with the plight of an attack target per se; people demand to know what principle supports your self-defense. Are you opposed to hypocrisy? Are you championing jobs? Are you demanding that your critics receive the same scrutiny that you are? Key audiences want to know the broader reason why they should care about an issue and should not be expected to appreciate the self interests of those under fire.

Finally, there’s something to be said for preaching to the choir. Because of the success of the public relations industry’s fundamentally wrong (but appealing) sales pitch that anyone can be spun, attack targets have a strong desire to be liked by their adversaries. This is especially true of large corporations, which contribute fortunes to their adversaries in the hope that they will learn to like them. These crisis creators enjoy the funds, but almost never shift their core positions. Nevertheless, such techniques often make companies feel as if they are doing something constructive, which supplants what’s really called for—a vigorous self-defense.

The truth is that image overhauls fail far more often than they work. Sometimes one has enemies who can’t be written off in a frenzy of denial as “stakeholders.” When it’s time to engage one’s adversaries, it’s better to have committed allies than wavering “target audiences.” A sober—and disquieting—understanding of how the marketplace of ideas, with all of its prejudices and inequalities, really operates is the first step in defusing attacks.


Mr. Dezenhall is CEO of Dezenhall Resources, a crisis communications firm, and co-author of Damage Control: Why Everything You Know About Crisis Management Is Wrong.