From Business News

How blatant can you get? (Notice the name of the reporter at the end of the article).

R.

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Published on March 30, 1999

Firms try spinning the crisis

They realize what they say about the crisis is almost as important as what they do WHAT'S GOING ON: Businesses anticipating a millennium bug crisis have taken steps to manage their Y2K message. Bankers and power and telephone companies took the public relations lead in an effort to prevent panic about Y2K. But small businesses should also take care. When it comes to the technical fixes of Y2K, the way you communicate them can be more important than what actually gets done. WHAT YOU CAN DO: Contact trade groups that host Web sites and issue newsletters outlining ways they have approached the media, government and the public. Develop a plan designating who can talk about Y2K issues to the media and to the public, draft sample Y2K messages as well as sample questions and answers for crises that may come up later. DAYS REMAINING UNTIL JAN. 1, 2000: 276

By Psyche Pascual TIMES STAFF WRITER ------------------------------------------------------------------------

Bank of America hires Ketchum Public Relations to forge its public awareness campaign. A Connecticut firm advertises a "Y2K PR Tool Kit" that promises to help companies soothe anxious consumers.

If the millennium bug is just so much hype as some claim, then why are American companies turning their attention to how they tell their side of the Y2K story?

It's simple: People want to know if and how the millennium bug will affect them. And companies are spending millions of dollars to make sure nervous consumers keep using their products into the new millennium.

Crisis managers and legal experts say companies can't afford to ignore their spin on Y2K, especially when the public is involved. Since no one knows what will happen when the internal clocks change from 1999 to 2000, the much-ballyhooed Y2K crisis could turn out to be a big zilch.

On the other hand, if the crisis is real, the cost of looking bad to your customers is incalculable, said Frasier Seitel, author of "The Practice of Public Relations" and editor of the Public Relations Strategist.

'Next great crisis'

While most businesses have spent most of their time fixing the technical problem of Y2K, many have neglected to tell customers and consumers what preparations they've made, Seitel said. He expects spending on Y2K communications to increase dramatically this year as companies realize consumers are still worried.

"Once Monica Lewinsky's forgotten, the next great crisis people will be looking at is Y2K. Any of these industries that are in the cross-hairs -- like the airlines or medical industries -- that are the least bit suspect will have to communicate that all is correct with them," said Seitel, who also serves as managing partner for Emerald Partners in New York.

One problem, researchers argue, is that consumers don't think the coverage of Y2K problems, either on television, radio or print media, is very useful in helping them plan. Recent opinion surveys reflect uncertainty and concern about the future.

In January, when the nonprofit Freedom Forum surveyed 1,002 people on Y2K, researchers found that 32 percent of those surveyed were "very or somewhat seriously" considering withdrawing money from their bank. About 20 percent were seriously considering stockpiling food and water.

Larry McGill, director of research for the Freedom Forum's Media Studies Center, which studies the relationship between the media and the public, said the data may be dated and the survey will be conducted again. But experts say the number of people concerned about stockpiling has grown, not declined, he said.

Concern increasing

Private businesses around the Bay Area report that public inquiries about their Y2K preparations have grown, especially since the beginning of the year.

Pacific Gas & Electric Corp. details on its Web site the testing it has done on software and hardware systems, its spending and progress on its Y2K plan. Requests for information have grown, not declined, and officials are struggling to keep up with them.

At the request of community groups and public officials, PG&E representatives have made 60 presentations to government and community groups this year, and 25 in March alone .

"We all anticipate as we go through the year, we'll get an increasing amount of inquiries," PG&E spokeswoman Diana Gapuz said.

Stories about millennium survivalists and the Y2K bug's potential to spur bank runs also prompted financial institutions to step up their PR efforts.

Last year, Bank of America hired London-based Ketchum Public Relations to help draft the institution's communication strategies around Y2K. It would not disclose what it paid Ketchum.

"In some areas a lot of attention is being paid to the doomsayers or information is not being portrayed accurately," said Julie Davis, who manages Bank of America's public relations for the Year 2000. "There are so many folks looking for things to go wrong and looking for opportunities to file lawsuits that we have to be extremely cautious. We have to be so careful about what we say, how we say it, who we say it to."

Bank of America discloses its Y2K compliance efforts to help ward off potential lawsuits from other businesses.

But when media organizations began generating stories about possible bank runs around Dec. 31, Bank of America got so many requests for information, it created a community speakers program that could be deployed, Davis said. The bank is now considering how to widen its message over the Internet.

Cost of preparedness

Environics Communications in Stamford, Conn., took advantage of the concern around Y2K to develop a Y2K PR Tool Kit, which it sends free to anyone who requests it. It includes a 77-item questionnaire, magazine articles on the psychological effects of Y2K, questions about legal issues involving suppliers, a list of Y2K Web sites and, of course, company brochures about Environics.

About 125 organizations have requested the kit since Environics began marketing it in early February, Environics officials said. Officials say the kit is a way of reaching understaffed businesses and nonprofit groups that can't afford to hire a public relations team. It is also a checklist for companies that already have a staff in place.

How much does reassurance cost? It would cost anywhere from $5,000 to $10,000 to help a company that wanted to make a big announcement about its Y2K preparedness, Environics Executive Vice President Bob Pickard said.

Planning Y2K strategies through the end of the year could cost as much as $5,000 a month, he added. In many cases, companies already have their communications staffing and network in place. They just need help drafting the kind of message to send.

"We're not talking about new services or products," he said. "But most organizations would not spend the equivalent of launching a new toothpaste or soft drink." ------------------------------------------------------------------------

Psyche Pascual is a business writer for the Times. Reach her at 925-952-2670 or ppascual@cctimes.com.

-- Roland (nottelling@nowhere.com), March 30, 1999

Answers

Flint, If the banks (or any other industry) are in good shape vis-a-vis Y2K, the best way to convince others of that fact is to make public the details of an independent third-party audit. The only reason most of us are willing to trust the P&L figures of a pubicly-traded company and thereby decide to buy their shares is that their financial statements are audited by independent organizations whose professional employees have to get accounting degrees, CPA's, and other such certifications. With respect to Y2K, I can't see how you can expect a reasonably cautious person to feel confident about the banks' optimistic statements when we know that the very same banks are prohibited by law from disclosing the results of the Y2K audits/inspections currently being carried out by the Fed. Here's the language of the restriction, which you can find at the following URL: http:// www.fdic.gov/banknews/fils/1998/fil9874.html

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"Information from Year 2000 assessments are governed by the same rules of confidentiality that apply to FDIC examinations for safety and soundness, compliance, information systems, and trust activities. Under Part 309 of the FDICs rules and regulations, disclosure of reports of examination, or any information contained in them, is strictly prohibited. Accordingly, institutions may not disclose results from Year 2000 assessments just as they may not disclose other types of examination information. "

"Moreover, disclosure of such information to third parties such as financial ratings firms or fidelity bond carriers is likewise prohibited. Requests from such entities are not authorized by the FDIC or any other banking regulator. In light of the blanket prohibition on disclosing ratings, compilations of Year 2000 ratings by such firms are necessarily incomplete and unreliable."

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I'm willing to ride in an elevator because I'm allowed to see to inspection certificate that confirms that the elevator is safe. I'm willing to buy a Brand-X car because the safety inspections conducted by the government, as well as independent entities like "Consumer Reports", are made public. Why should I be willing to believe the Y2K assurances of an organization if I'm specifically prohibited from seeing the results of their Y2K inspections? Ed

-- Ed Yourdon (ed@yourdon.com), March 30, 1999.

Flint,

Well, we may not be in complete agreement on everything about Y2K, but it looks like we see eye to eye on the "secrecy" issue. The irony is that the banking industry is almost certainly in better shape than any other industry, at least in terms of the "narrow" definition of internal Y2K readiness, etc. They've got plenty of money, plenty of talent, enormous amounts of regulatory pressure, and a self-generated sense of urgency because of the fractional reserve nature of their business. But by keeping all of their Fed inspections secret, the public-confidence situation is likely to boomerang on them. And I'm not sure they get it -- the harder they try to tell everyone not to worry (while keeping those inspections secret), the more they tempt people to mutter to themselves, "Methinks they doth protest too much..."

Ed

-- Ed Yourdon (ed@yourdon.com), March 30, 1999.

THIS IS WHO "NORM/Y2kPRO" and "MUTHA NATCHA" ARE WORKING FOR! -or might as well be. Ever wonder why "Norm" is here every day, upchucking printmedia damage-control fluff, usually without comment? IT'S HIS JOB! This is "public relations" (lies and sorcery) in the information age, people. Kudo's to Roland for "paying attention to the man behind the curtain." Outstanding!

Prepared.

-- Prepared (laughing@shills.now), March 30, 1999.

"Once Monica Lewinsky's forgotten, the next great crisis we'll be looking at is Y2K." Sorry, preempted by Y2Kosovo.

-- Spidey (in@jam.com), March 30, 1999.

Lies, damn lies and statistics.

Information, misinformation, disinformation.

Spin, rumor and propaganda.

Y2k is difficult enough to analyze accurately given the vast number of unknowns in the equation even without the confusion and obfuscation being deliberately introduced into the process. I really feel sorry for anyone at this point in the game who is just beginning a serious personal evaluation of the potential problems y2k might bring. They will have a great deal to contend with, and I doubt it will get any better as rollover approaches. It is a time for objectivity and clear thinking.

-- (li'ldog@stillontheporch.com), March 30, 1999.

...obectivity? Clear thinkng? On this forum?

...hee,hee.

"So, of course I want to see y2k bring down the system, all over the world. I have hoped for this all of my adult life." -- Gary North

-- Y2K Pro (2@641.com), March 30, 1999.

More clear evidence that "Norm/Y2kPro" is a vile disruptor, and inimical to the purpose of this forum, and to it's legitimate posters. What more do we need to pull his posts, or at the very least excoriate him consistently, until he gets the message? Victimization - such as the takeover of this forum by PR shills Y2kNorm and Co. - goes two ways: audacity (and moral bankruptcy) on their part, and WEAKNESS on our part. DO NOT TOLERATE THEM. Y2kNorm: My curse is upon you, shite. In the post-Y2k world, you and your feral type are going to learn decent behavior or end up in a ditch. I just hope you flap your mouth just like you type, so you find out exactly what I mean.

Prepared

-- Prepared (digging@ditch.now), March 30, 1999.

Some times,,late at night,,I get to thinking about what will happen to all the spinners if TSHTF. I'm not talking law suits here,,,I'm talking the grid goes down and you're the PR point man,,and people are dieing,,,your Ko-skin-em,,,and people are dieing,,,lots of people.

If TS really HTF,,I see a real possibility of a shortage of rope. Nope,,I would want to be the guy that said we're Y2k-OK when people are freezing in the dark.

-- CT (ct@no.yr), March 30, 1999.

CT:

The way to stay warm is to build a fire.

Prepared

-- Prepared (gathering@fuel.now), March 30, 1999.

re: soothing anxious consumers

What it really means is: if you punch the "withdraw" button on an ATM after December 1st, you get shot with a tranquilizer dart.

What, me worry?

-- Margaret (janssm@aol.com), March 30, 1999.

The mouth-breathing "Prepared" threatened:

In the post-Y2k world, you and your feral type are going to learn decent behavior or end up in a ditch. I just hope you flap your mouth just like you type, so you find out exactly what I mean."

In the post-Y2k world,(which will look exatly like the pre-Y2K world...) you and your feral type are going to look at your ten year supply of rice and beans in your bug-out shelter and say, "How could I have been such a fart-catcher as to listen to Gary North?"

On that day, I shall laugh - smugly.

"So, of course I want to see y2k bring down the system, all over the world. I have hoped for this all of my adult life." -- Gary North

-- Y2K Pro (2@641.com), March 30, 1999.

This article raises an interesting issue, and 'preparer' has only addressed it indirectly.

Let's say (purely hypothetically) that de Jager is correct, that the problem is well under control, and that as far as those who really have the details we never see are concerned, nothing much will happen.

If this were really the case, I ask 'preparer' how (s)he would get the word out in a way that (s)he would accept. I put this question to a banks-are-toast poster to csy2k, and he admitted that if banks really were prepared, there was *nothing* that could possibly convince him of the truth of this, *even if it were true.* I wonder if 'preparer' would be honest enough to admit that there is NO WAY he could learn the truth, should the truth be optimistic.

It's entirely possible that many people in the know sincerely feel that public concerns are overblown. How do you get this word out, if all reassurances, no matter how reality-based, are rejected as PR? So we really want to see detailed lists of systems from every organization, telling us how critical each is, and where it stands, updated daily? Perhaps more important, do we really want organizations to spend the time and money on such daily reports, possibly satisfying public curiosity at the expense of getting actual work done (because the details would have to come from the geeks, and they're pretty busy right now).

So I ask 'preparer' or anyone else here: If the news is really good, how do you get this across?

-- Flint (flintc@mindspring.com), March 30, 1999.

Hey Y2K Prophylactic, will you get off that soapbox, you're boring us to death with the same line, over and over and over and over... Needless to say, I agree with prepared that you are a disruptive moron that should be stripped naked and lashed in public. Freaking idiot. <:)=

-- Sysman (y2kboard@yahoo.com), March 30, 1999.

If the news about Y2K is good and it's getting better everyday, then there won't be public panic. Why are these companies wasting their money on PR?

-- Kevin (mixesmusic@worldnet.att.net), March 30, 1999.

Kevin:

If the news is good and getting better every day, shouldn't we be told about this? Aren't we more likely to worry if we don't know this? PR companies are in the business of communicating a message. They know how to do this. Of course, they don't care if the message is accurate or not, just like a defense lawyer doesn't care if you're guilty or not.

If the goal is to tell the truth, the job becomes very difficult. It's hard to find a good way to tell people that we're working on it, we won't finish, real problems are likely, we don't know what they'll be, we believe a properly informed public will make good choices if the information is accurate, even if the future isn't too promising.

At least, that's the message I'd like to see put out there.

-- Flint (flintc@mindspring.com), March 30, 1999.

Ed:

One thing that seems clear to me is that as time goes on, keeping this information a secret is rapidly reaching the point where the secrecy does more harm than good, if we haven't got there already. Y2K really seems to be ripening into one of those situations where the best strategy is to tell the truth and tell it fast. No matter what that truth might be.

While some of these 'audits' seem awful perfunctory, I'd still like to see all of the results published (preferably, along with the auditor and the method of audit). I think we've reached the time when secrecy is worse than genuine bad news. Non-disclosure agreements are not helping.

Of course, if I said who my employer is I'd be fired.

-- Flint (flintc@mindspring.com), March 30, 1999.