Applying the science of reputation management

Date: 20/02/1997

By Tim Jones

TO MANY people, public relations and lobbying firms are a puzzle.

Put simply, what are they actually for? Why are firms or trade associations incapable of carrying out their own lobbying of the European Union's institutions?

After all, up to 10,000 people are reckoned to be employed as lobbyists of one kind or another in Brussels, many of them working full-time to represent the interests of a particular sector.

Yet a large number of them seem to doubt their own expertise, with many turning in addition to specialist public affairs agencies such as Burson-Marsteller, Hill & Knowlton and Fleischman Hillard to help them devise a communications strategy and lobby governments on their behalf.

Europe's largest firm, Shandwick, is one of the newest kids on the Brussels block, having opened its office here just two years ago. The company, which was founded 22 years ago, has wholly-owned offices in the UK, Germany, France, Spain, Italy and the Netherlands as well as in Brussels.

Volker Stoltz, managing director of Shandwick Europe, insists that his profession has a worthwhile role to play.

“Public relations is reputation management,” he says. “That is to say, we try to manage the reputation of companies, people and brands. When it comes to public affairs, we are trying to deal with the issues which can affect the interests as well as the reputation of companies and brands.”

Stoltz does not believe that all news, even when it is bad, is good.

“A company can continue to sell, even with a bad reputation, but only for so long. Its standing will first fall with those in the know and this will eventually feed through to customers and have an impact on sales.”

Multinational companies and interest groups should certainly set up their own operations in the centre of EU activities, he says, but many of them can benefit in addition from using specialists in public affairs.

This is now becoming increasingly important as a shake-out gets under way in the Brussels lobbying scene, where some smaller firms have actually gone out of business.

“When a client uses a public affairs firm, they are benefiting from extra knowledge and expertise about the system itself,” says Stoltz. “Obviously, for them, the subject of their lobbying is second nature, but our staff have a strong understanding of the way the institutions work.”

Of course, public affairs firms would always stress how vital they are since they rely on fees from companies who think they have special access to policy-makers and opinion-formers.

In fact, organised public affairs is a traditionally Anglo-Saxon pastime. The biggest firms are American and it is in Washington that the art of professional lobbying has been turned virtually into a political science.

“This is a problem that all of us come up against in Europe,” claims Stoltz. “Britain and the US have a public affairs culture which is just not reflected elsewhere in the Union. But having said that, the best lobbyists in Europe are the French.”

French interest groups do not operate through professional firms. Instead, they make their influence felt through the institutions themselves via civil servants and political networking.

But that model cannot be aped by other nationalities since they do not have the same fonctionnaire culture, says Stoltz.

Shandwick sells itself as a pan-European lobbying network which can adapt to the situation on the ground in any capital - offering it a flexibility which is vital given that, when it comes to the EU, the key decision-makers are those in national ministries.

Since it is the European Commission which initiates legislation, but the Council of Ministers which must endorse it, public affairs firms must be able to make their presence felt back in the national capitals - a fact Stoltz laments.

“As long as Europe is not a democracy and continues to be ruled by the Council of Ministers and unfortunately not by the European Parliament, then this sort of work will have to be carried out,” he says.

This is a regular theme of Brussels lobbyists and may ring alarm bells among governments.

While they do not say it out loud, lobbyists would be happier to deal with an influential Parliament because they believe that MEPs would in turn be easier to influence than governments back home.