Sarah Tucker: When Being Right is Bad for Business

Sarah Tucker

What the Palace, Volkswagen and KFC can teach entrepreneurs about the dangerous gap between being legally correct and being understood.

The Palace did not call Earl Spencer a liar. It did something considerably more carefully constructed: it questioned whether his memory could be trusted. In response to Spencer’s forthcoming memoir, Swan Song: Diana, My Sister, Buckingham Palace suggested that “the pain of fraternal grief can cloud reason, affect judgment and colour memory”, moving the argument from what King Charles allegedly said after Diana’s death to whether Spencer can reliably remember what he heard nearly three decades ago. Spencer has rejected that implication and insists that he remembers the words exactly.

Whether Spencer is right cannot be established from the public evidence, since there is no recording of the conversation and no independent witness capable of settling the precise wording. What can be examined is the communication strategy, and it raises a question that matters considerably beyond the Royal Family: when an organisation is under pressure, is being technically right necessarily the same thing as being right?

For a lawyer, the answer may be straightforward. The relevant question is whether a statement is defensible, whether it creates liability and whether an organisation has admitted something that could later be used against it. For a public relations adviser, however, the question is rather different: what will people think the organisation is trying not to say?

Those questions can produce completely different answers.

The Palace has an unusually difficult communications problem because every response becomes part of the story. The latest statement was rare precisely because the monarchy has traditionally understood the value of restraint, yet once it entered the argument, the press was given something new to analyse, including why the Palace had responded, why it had chosen that particular language and whether questioning Spencer’s memory was more revealing than simply denying his allegation.

It is a problem entrepreneurs encounter on a much smaller scale every day.

A customer complains that a product has failed and receives a paragraph explaining why the company is contractually protected. A client objects to an invoice and is sent the relevant clause in the terms and conditions. An employee raises a problem and receives an impeccably worded explanation of why the organisation has technically followed procedure. Everyone involved may be perfectly correct, yet the person on the receiving end can still come away thinking that nobody has actually answered the question.

That is strategic obtuseness: answering the question you can defend rather than the question everyone else is asking.

The tobacco industry took this principle to an altogether more sophisticated level. Internal documents revealed that Philip Morris developed a “sound science” campaign designed to influence the standards by which evidence about the dangers of secondhand smoke would be judged. Working through lawyers, public relations firms and apparently independent organisations, the campaign sought to make proving the risks more difficult rather than simply arguing that the risks did not exist. Researchers described this as an attempt to change the scientific standards of proof themselves.

That was not a communications accident. It was a communications strategy.

The distinction matters because an organisation does not always need to win an argument in order to influence the outcome. Sometimes it only needs to change the terms of the argument, introduce enough uncertainty to delay a decision or persuade people that the issue is considerably more complicated than they initially thought.

The strategy becomes dangerous when it is applied to customers rather than regulators or lawyers, because customers generally have no obligation to stay for the second paragraph.

Volkswagen discovered this during its emissions scandal, when technical explanations and carefully chosen language collided with a much simpler public question about why its cars had behaved differently under testing conditions. The company could discuss software, testing procedures and compliance, but none of those distinctions answered the fundamental issue of trust.

The problem with technically precise language is that it can sound wonderfully intelligent inside a boardroom and remarkably evasive outside it.

Johnson & Johnson demonstrated the opposite approach during the Tylenol poisoning crisis in 1982. The company could have concentrated on the distinction between its manufacturing process and the criminal tampering that had occurred, but instead it recalled the product and put consumer safety at the centre of its response. The decision imposed enormous immediate costs, yet it communicated something more important than a legal defence: the company understood what mattered to the people buying its products.

KFC produced the comic British version of the same lesson in 2018, when a distribution failure left restaurants without chicken. Instead of hiding behind corporate language about unforeseen logistical difficulties, it rearranged its initials into “FCK” and acknowledged the obvious absurdity of the situation. The advertisement worked because it did not try to persuade customers that the problem was something other than the problem they were experiencing.

The best PR, therefore, is not necessarily the cleverest PR.

It is the ability to understand what the other person is actually asking.

That distinction is particularly important for entrepreneurs because reputation is one of the few assets that can be destroyed much faster than it can be built. A young company can spend years persuading customers that it is trustworthy and then undermine that impression with one email in which the founder demonstrates that they are more interested in proving a contractual point than resolving a customer’s problem.

This is why “Who has the best PR?” is probably the wrong question.

The more useful question is who understands the psychology of the person on the other side of the conversation.

A customer disputing a cancellation fee may technically be asking about the fee while actually asking whether the company values the relationship. A client challenging a decision may appear to be asking for an explanation while really asking whether anyone has understood the consequences. A journalist asking whether a decision was made deliberately may not be interested in the carefully narrowed answer supplied by the communications team, because the real question concerns responsibility.

The most dangerous response is therefore not necessarily an inaccurate one.

It is an accurate answer to the wrong question.

That is why the current Palace dispute is so instructive for business. The statement may have been carefully designed to avoid directly accusing Spencer of lying while protecting the King’s position, and the Palace may consider that a perfectly reasonable objective. Yet the response has shifted the public conversation towards Spencer’s credibility, with Spencer now accusing the King of effectively questioning his truthfulness.

The Palace may have intended to close one argument.

Instead, it created another.

Entrepreneurs should notice the distinction because the same thing happens in companies, only without the benefit of a constitutional history dating back centuries.

Understanding the law does not mean you are in the right. Being contractually protected does
not mean you have behaved well. Producing a statement containing no factual inaccuracies does not mean customers will regard it as honest. Sometimes the most damaging thing an organisation can do is demonstrate how brilliantly it can defend itself.

Reputation is not a courtroom, and customers are not judges obliged to distinguish between liability and responsibility.

They are simply deciding whether they trust you.

The smartest organisations understand that being right is only one part of the problem. They also understand how their version of being right will sound to somebody who has experienced the situation from the other side.

That is why the strongest response is often not the one that wins the argument.

It is the one that makes the other person feel that you understood the question before you answered it.