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Phone Hacking: a reputation management lesson

News of the World final coverThe News of the World phone hacking scandal is a lesson for any business in how not to manage bad news. In a world where social media gives every man and his mouse an instant voice; where social networks allow the instant worldwide dissemination of scandal, not just News of the World but the global empire that owns it has been slapped in the face by the common man.

The lesson to be learned from the phone hacking story is that you should be open and up front, not be economical with the truth and not try to cover up things that would appear far worse if revealed by other parties.

Following the first investigation into phone hacking, which resulted in Glenn Mulcaire and Clive Goodman going to prison, loud rumblings rattled through the media grapevine that the “one rogue reporter” claim by the News of the World was false. Clearly, as we know now, it was false and what remains to be discovered is how far the phone hacking went, who knew about it, who authorised it etc.

That initial attempt by News International to kill the scandal by saying the guilty people had been sent to prison was an enormous error in judgment. Clearly, the company assumed the public would be satisfied that it had cooperated with the investigation. The second huge error by News International was its own internal inquiry which found no further evidence of wrongdoing over phone hacking. Again, with the benefit of hindsight we now know this to be wrong.

The problem for News International is that it has, repeatedly even over the past week, boasted of its brilliance at running investigations, so why was it not able to uncover wrongdoing during its own inquiry? A media organisation that has made enemies was always going to be found out in the end. With the power of social networks providing a perfect avenue for armchair commentators to pick holes in News International’s claims, the company’s initial attempt to kill the scandal before it got going actually ensured it became a much more disastrous scandal once it was revealed.

For any company in a position where bad news is likely to be revealed, the first question should not be, “How can we cover this up?” Instead, it should be, “How can we reveal this in a way that won’t destroy us?” Up front honesty is sometimes painful, but the socially connected online world has shown this month that dishonesty can be far more painful.

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