In 1991, a well-known home building company paid the largest criminal environmental fine in the history of Arizona on behalf of a subsidiary that it no longer owned. "They paid a $1 million fine, but because they did an appropriate mea culpa, it didn't follow them," says Jonathan Bernstein, president and CEO of Bernstein Communications, in Monrovia, Calif. "It was a two-day story, and not a two-year story."
The company was Del Webb. Its quick apology, and assumption of responsibility for polluting Lake Powell when it could easily have argued that it was not involved, turned a potential disaster into a model of good corporate citizenship. Del Webb, now owned by Pulte Homes, even paid part of the cost of investigating the case.
But Del Webb's proactive response remains more the exception than the norm in dealing with potentially explosive public relations issues, say some media analysts. Even the most sophisticated builders can, and often still do, give short shrift to knowing how the press works, building strong relationships with reporters, and reacting promptly and responsibly to a crisis. Bad press may not be avoidable, say media analysts, but public relations damage can be contained if builders respond quickly.
There's no question; builders have taken their share of hits in the media. Stories about mold, construction defects, and local opposition to development have typically been written from a consumer's rights perspective, providing a very limited view of the builder's side of the story. Many builders often retreat in the face of such stories.
Even when builders work overtime to get their positions in print, the results can be unflattering, as KB Home discovered last month. The Wall Street Journal published a story Aug. 18 detailing a battle between KB and frustrated San Antonio homeowners over repair problems and worries about unexploded ordnance in a development built atop an old naval bombing range. The saga included public protests, a disgruntled activist who allegedly planted a bomb on the site and now faces criminal prosecution, a dispute with the Army Corps of Engineers, and a raft of lawsuits. The story ultimately illustrated how far consumers will go to attract media attention as a means to resolve complaints and how challenging it can be for business owners to get good news into the media spotlight.
Earning good media is difficult, but it's not impossible, say media advisers, including Debra Hotaling, senior director of public relations at KB Home, in Los Angeles. One thing going for builders is that housing issues are more prominent than ever before in the media. The role that home building plays in the economy -- the financing issues and of course the perennial environmental issues -- loom large in the public consciousness.
"Big builders are high on the radar screen," says Hotaling. As a result, she adds, "We require a strong set of [communication] skills," especially since the issues are emotional. "The notion of home touches on every part of social discourse, whether it's land management or budgets or community and land uses. Anything you can think of gets back to homes and communities. There are so many different situations and topics."
Hotaling knows about hot topics in the news and the importance of providing sufficient background. She came to KB Home from the high-tech industry. She recalls the basic education that spokespeople, marketers, and publicists for the high-tech industry had to provide, day in and day out, to reporters and the general public. "Here's a computer. Inside it has a chip about as big as your fingernail. On that chip..." she laughs.
By contrast, many people assume the media know all about houses and home building, and some builders do not provide the basics, even if builders suspect that what the public thinks it knows is wrong. "Building a home is a complicated business," says Hotaling. "There are a lot of moving parts. Even folks who think they understand construction and quality assurance" might be misinformed or possess outdated information, she says. "We [public relations] professionals have a big job to do to educate reporters every day." The education involves working closely with reporters, to inform them of everything from the permitting process to changing the image of the builders themselves. "They think of guys chomping on cigars on their yachts," says Hotaling. "That's not who we are. We are very consumer-focused."
Linda Martin, senior vice president and general manager in the Irvine, Calif., office of Porter Novelli, an international public relations firm, has worked in the public relations business for 20 years. "I think there's a disconnect between how builders see themselves and how the public sees them," she says. Martin says she believes that builders' image problems are persistent and, if anything, growing stronger over time. "Builders see themselves wearing white hats," she explains. "They provide a place for families to live and grow, in nice neighborhoods with a lot of parks. But the public sees them as black hats. The builders are the visible people at the end of an obscure process called 'development' that takes away the vacant lot where the kids played softball."
The cultural gap between the media and big builders can translate directly into the general public's ignorance of builders' businesses, says Marcus Ginnaty, a senior associate at Porter Novelli. While the perception that the general public has of builders is "a little more sophisticated now than 10 years ago," says Ginnaty, the average person still isn't aware of how difficult the entitlement process is, how much a builder must pay to navigate the process, and how that price increases the cost of a home. The permitting process remains unknown and unseen by most members of the general public, believes Martin, so when there's a negative article or television report, there is no context in which to place the bad news.
Some builders, including sophisticated ones, misunderstand the job of the press, says Bernstein. Reporters are not publicists for companies, nor is it their job to report on promotions or financial developments, he says. Their job is to report what is newsworthy. The nature of the news cycle is that stories of controversy and conflict get more attention than the fact that company X has acquired company Y.
Environmentalists and community activists not only understand this but have perfected ways to exploit the media's daily appetite for a juicy story, says Bernstein. "Environmental activists are professional public relations people. They may be volunteers, but they are sophisticated users of the press, both online and offline. They are more sophisticated than builders" in working the media, he says, and more dedicated to investing the time to earn the attention of the press. He adds that he hopes that will change. If builders thought more like activists, perhaps the press pendulum would swing their way. Most builders, however, continue to react to events, rather than anticipate them.
It's All In Your Mindset
Many businesses have a tough time getting good press because they do not share the same mindset as the general public, says Bernstein.
Builders, including the biggest builders, are members of the communities in which they are located, and the public expects them to react to bad news as any resident would. "People are willing to forgive if you accept responsibility and apologize," says David Kusumoto, director of media relations at San Diego-based RHA, who works often with builders and developers.
"The vast majority of these consumer-based stories are preventable before they hit the press," says Kusumoto. "Consumers are seeking a remedy, and going to the press is a last resort." What builders should do is announce they are going to fix the problem, and then fix the problem, and then announce that they have fixed it and throw in a small freebie, such as a houseplant or assistance with moving, to make the owner feel less disgruntled, says Kusumoto.
Builders need to get out front and say, "We're taking care of the problem. We're sorry; we made a mistake." The cover-up, as Watergate taught us, is worse than the crime, says Kusumoto. If a builder does aggressively attack the issue, he says, then the perception of builders may start to change, from indifferent fat cats to concerned citizens.
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When there are problems, the builders can also position themselves as victims, notes Jonathan Bernstein. Mold is a national problem, and the public needs to be educated, he says. "You're always going to find mold. The question is how much and what kind? Toxic mold is still a headline-grabber," he acknowledges. Builders must emphasize that this is a nationwide problem, Bernstein says. "There are 17,000 mold-related lawsuits in the country right now. So far, no one has been found guilty of negligence, though there have been some settlements. That's an important point." The builders are usually criticized not for mold, says Bernstein, but for withholding information about the problem and for failing to act when the problem came to light.
It's important to recognize that some bad press is inevitable, says Martin, of Porter Novelli. "By the time a developer gets the [permitting] approval, the builder honestly believes that the community approves and you're going into a community that will embrace you," she says. But it's important to continue communicating, especially with local media, about the entitlement and development process even after the permit is issued and construction begins. After all, that's when many people first notice the development and start to ask questions.
"It's no longer optional to get out in front of this," says Martin. "You have no choice. No matter how small your project is, you can never assume that your neighbors will welcome you. You have to assume the opposite."
Occasionally, there is no opposition, she acknowledges, but builders should not think of that as the norm. "Builders must prepare for the worst," she advises. "There will always be someone against you. There will always be a gadfly on the city council. You can't hurt yourself by being prepared."
Doing the SpadeWork
Some builders ignore the press, except for issuing press releases about routine financial developments, and then don't start a media relations program until a crisis hits, says Martin. They are then starting from zero, with no residue of good will built up and no history of dealing with particular publications.
Most reporters need background information on the companies they cover. "When there's nothing particularly newsworthy, call and offer a background briefing and find some time to brief them on the company," recommends Bernstein. Include and invite civic activists, he advises. "But it's critical that the information be credible, and not hype," he says. Different material should be offered to salespeople as opposed to reporters, who are put off by sales pitches, he notes.
While many builders are reticent about the good works they do, and don't want to be perceived as people who are tooting their own horn about fine building programs, it's important to inform the decision-makers in the community of what your company is doing, notes Martin. If the local press won't cover it, send an e-mail to local online discussion lists or a mailing to a targeted group of people. When the community center you renovated opens, invite everyone to the opening, including known opponents, and feed them well.
Times have changed, observes Kusumoto. Good press is harder than ever to earn, even as builders and developers continue to do more for communities. In the past, developers and builders didn't have to take care of parks, schools, or infrastructure; this was the responsibility of government, says Kusumoto. "Today, private businesses have to provide them, but don't get credit for them," he sighs. But the current perception in the mainstream media of developers such as Mr. Potter -- the man who destroyed Jimmy Stewart's hometown in "It's a Wonderful Life" -- is unfair, he says. That perception has to change, he says, and the builders have the responsibility to change it.
Learn more about markets featured in this article: Los Angeles, CA.