Crisis management by accident - insights and challenges of Public Affairs

Wednesday 18 March, 2015

Those people who are waiting for China to become a fully fledged superpower might have a long wait, according to one of Australia’s most experienced government advisers and public affairs analysts, Mr Alistair Nicholas.

When Mr Nicholas, a former Warrane resident, spoke at the College on Wednesday 18 March 2015, he was asked after years of living and working in China about the country’s superpower prospects.

“China has some very deep problems it needs to resolve - deep geopolitical problems,” he said. Some writers talk about the problems that China has and living in China you could see those problems.

“If you live in a city like Beijing or Shanghai, a lot of foreigners visit those cities and they have rich, robust middle classes, great shopping malls, and it all looks good. But you drive one hundred kilometres outside the city and you start to see real poverty and you start to see real problems. You see unemployment and underemployment.

“So China has huge problems. If you look at the Chinese economy, it needs to grow by at least seven percent per annum to hire all of the new people coming onto the job market. If it doesn’t do that, it starts to have unemployment and unrest.

“So I think the future for China is not that bright. I think China at the moment is only a superpower because of the size of its economy, but if it tries to really assert itself as a superpower it will probably have the same sorts of problems that the Soviet Union had when it tried to bill itself as a superpower.

“If it tries to divert resources into building its military, which it is trying to do, it means that the resources are not going into other parts of the economy. It is going to have problems.”

Mr Nicholas, a UNSW graduate and Warrane resident from the 1980s, has been working in government, public affairs and crisis management for more than 25 years in Australia, North America and Asia. He has been an adviser to the Liberal and National Parties and was Australia’s Trade Commissioner to the World Bank and the United Nations from 1997 to 2000.

He was based in Beijing for 13 years advising companies experiencing communication problems dealing with the Chinese Government and markets. Since returning to live in Australia in 2013 he has been involved in advising Chinese and other multinationals on dealing with the Federal and State governments.

During his talk at Warrane he spoke about the advice he offers companies in crisis situations, pointing out that he “got into crisis management by accident”.

“After I left college I worked in a think tank and then for the National party and for the Liberal party and I found the ability to stay calm in the middle of a crisis is the one thing necessary to manage a crisis. You need to be able to stop and look at the situation and look at how you are communicating with the community. You have to communicate what you are doing.”

Mr Nicholas offered examples of particular crises he had been involved in, both in Australia and China. He said he often had to work with companies to make sure the story got out to the media of how the company itself saw the situation and often this was difficult because the company had been told by its legal advisers to say as little publicly as possible.

Most importantly, he said, it was necessary to exercise ethics and integrity in this kind of work.

“Often you hear of people like me referred to as spin doctors,” he said. “I would like to say on the record that I am not a spin doctor. And if that is how you think you are going to get out of a crisis situation, you have got it all wrong.

“So one of the first things I tell my clients is: ‘Don’t lie. As soon as you lie you have lost it, because as soon as someone finds out - the media are going to be digging or regulators might find out - you will lose what you are trying to do. You cannot tell a lie.’

“Quite often I have to work with the clients to get the truth out of them and sometimes it’s like extracting teeth but more often than not the clients I work with actually are doing the right thing. They are just not sure how to communicate it and too often they have got lawyers there saying we shouldn’t say anything, we should just keep quiet. Well, that doesn’t help you get your story out so you have to find a way to do that.”

Mr Nicholas said the second thing he advised clients to do was to avoid any temptation to bribe anyone.

“Don’t try to bribe journalists,” he said, “don’t try to bribe politicians, don’t try to bribe regulators. Sad as it may be, I have been asked to bribe people a couple of times in my career. I am happy to say I have walked away from those ‘business opportunities’, if you like, because I don’t believe that is something you should do.

“I have been in those situations, not just in China, but in Australia as well, where people have said: ‘Well, let’s give a bribe, let’s get what we want.’ and asked me to go along with it. Once, early in my career’ I said to my bosses that I had been asked to do this and that I didn’t think it was right and I was not prepared to do it. They were good guys and they said they didn’t do that either and they fired the client. So you have got to do that.”

Mr Nicholas said there were things he would not work on because of his personal morality.

“My company knows my values - things I believe in deeply. If a client came in and wanted me to work on a new abortion drug I would walk out and my company knows that.”

Mr Nicholas said he believed that in a democracy like Australia’s, the best way to arrive at a good outcome when a policy or economic issue arises is to ensure that both sides are given the opportunity to put forward their cases.

“Quite often the little guy doesn’t get that chance,” he said. “And quite often our clients are not big business, they are the little guys.”

Dealing with crisis management situations, Mr Nicholas said, usually meant dealing with people who were really stressed and that in these situations he found that the skills he developed as a tutor in Warrane were very useful.

“You need to get people to sit down and take a helicopter view of the situation,” he said. “There are all these people running around trying to deal with the problem, but they are not focusing and they’re not thinking about it.

“A lot of the time they’re just concerned about one particular aspect of it. They're not seeing the big picture. So often it is just about getting them to calm down and it helps if you have the sort of personality that keeps things calm.”

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