Oral Histories

Peter Debreceny

Interview Segments on Topic: Challenges/Accomplishments

Peter Debreceny Biography

Peter Debreceny, a consultant with the Chicago-based strategy execution firm Gagen MacDonald, and former vice president of the Corporate Relations Department of Allstate Insurance Company, has more than 30 years experience in public relations and integrated communications. Debreceny has had a distinguished career in both corporate and agency life and has practiced in New Zealand, Australia and the United States.

Debreceny joined Gagen MacDonald in 2007, specializing in change management, corporate reputation and social responsibility strategies. In addition to leading several of the firm's client engagements, he started its social media and CSR practices.

Previously, Debreceny was vice president of Corporate Relations at the Allstate Insurance Company where he was responsible for internal and external communications and where he won a Silver Anvil award for his pioneering work in stakeholder engagement and corporate reputation management.

Earlier in his career, he led communications for New Zealand's first two America's Cup yachting challenges in Perth, Australia and in San Diego, for which he also won a Silver Anvil. He also led the communications campaign for New Zealand's first successful environmental campaign and was a senior member of the group that organized the New Zealand entry at the 1988 World Expo in Brisbane, Australia.

Debreceny is a 2009 inductee to the PR News Hall of Fame. He has served as a trustee of the Institute for Public Relations and was chair and co-chair of the Institute from 2004 to 2008. He is chair of the Commission on Global Public Relations Research and a trustee of the Center for Global Public Relations at the University of North Carolina, Charlotte. He was recently awarded the 2010 Distinguished Service Award by the Arthur W. Page Society.

Transcript

Interviewer:   That’s right. The Gulf Coast experienced a terrible tragedy from the hurricanes Katrina and Rita. At that time you were Allstate’s vice president for corporate relations and you manned the front line. Of course, there were many accusations in the following years about the integrity of the “good hands” of Allstate and you found yourself dealing with the question of the flood versus the wind damage and over 300,000 claims. How did you, as an individual and as a corporation, handle extreme devastation and high emotions with little or no technology to support the normal communication you would have with your employees and your various constituencies? How did you manage that? It’s remarkable.

Debreceny:   Well, let me break that question down into three parts. Firstly, let’s talk about crisis management. I think the one most important thing about crisis management is to understand that a crisis is not normal operations. A crisis is different and everybody in the organization has to behave on the basis that a crisis is different and what you would normally do on a day-to-day basis you had to put to one side and focus on the crisis because if you don’t stay ahead of the crisis, it’s going to overtake you. That was particularly the case with Katrina and Rita, and any time a calamity or catastrophe like that happens. But in any organization a crisis can happen any time and come from anywhere and the organization has to be ready to deal with it. It is really critical and when it happens you really need to be able to put your game plan into operation and really focus on dealing with that crisis and staying ahead of the game. Just to repeat; if you don’t stay ahead of it, it’s going to stay ahead of you and then you’re going to be following it and it’s going to be taking you to places you really don’t want to go. The only way to manage a crisis to get it to where you want it to be is to really focus, keep everything really simple, clear, and do everything that you need to do in order to be able to stay ahead of the game.

Big insurance companies like Allstate and State Farm are really good at dealing with what we would call a catastrophe. So in the Allstate case, we have a whole group of people who do nothing else but look after catastrophes when they happen.  Any time there is a tornado, an earthquake, a hurricane, even something like an ice storm that will take power out and destroy cars, and floods, we have a specialized group that will go in to look after our customers. So we’ve had lots of experience dealing with catastrophes, both from the point of view of running an insurance business, handling claims, and communications. So to an extent, when Katrina came along we pretty much had a game plan that was tried and tested that we were ready to put into operation. Even before Katrina arrived on shore, we had thirty mobile claims facilities standing by waiting. It was a little unclear which way it was going to come. Was it going to come into New Orleans, or was it going to veer a little bit to the east? So we were waiting, ready to bring this facility in. The local region had communications all ready to go. Katrina was really interesting because it was so much different from virtually any other catastrophe of that kind.

Early on, true communications were completely out. An interesting learning point for me was that it just showed you the fragility of our communications system. All of the cell phone towers go because the wind blows them down and if the wind doesn’t blow them down, there are so many people trying to get out on their cell phones that you can’t get a line. So there’s no wireless communication, and there probably wouldn’t be in an earthquake as well. Next time an earthquake hits California, a big one; there won’t be any wireless because all of the towers are going to crumble. The regular landlines worked fine for the first 24-48-72 hours. There was no power but they all had backup generators so they all moved to backup generators. Pretty quickly after about the third or fourth day those generators ran out of gas and there was no way to get extra gas because essentially in that area there was no communication happening. Our claims trucks, once we could get them in, which was really difficult, particularly with the security issues, were OK because they had their own facilities, but just to get our agents back up and running we went and found a mobile telephone exchange and trucked it in and we set it up in order to get people back up and running.

But we had these systems already set up for when any hurricane comes through. We have these mobile claims offices come in, set up, and away we go; looking after customers. That’s our number one priority; how do we look out for first our employees and agents, then how do we look after our customers. Everybody is pretty much focused on that and nothing else but that for the first few weeks in the case of Katrina. The role that communications plays is getting information to people. This is where you go to file your claim. Here are the locations; here is what you can do. We use the news media to communicate to customers so we can do what we are required to do and what we want to do in looking after our customers. Everybody in the Allstate family and in other insurance companies like Allstate is full of people who by their very nature are caring people. That’s why they go work for insurance companies in most cases. We are good neighbors, if you work for State Farm. You’re in good hands means something to the Allstate family. So we are really focused on that. After a while, the communication systems came back up and the role of communication began to change because, to a point, we handled a lot of claims and the insurance industry handled a lot of claims and paid out billions and billions of dollars. There was a small percentage of all of those claims that became problematic and it’s an interesting conundrum for people like an insurance company when essentially you’re bound by a legal document. Although we don’t think of it this way, the policy that you sign is a legal document between you and the insurance company and the insurance company is bound by its requirement to deliver against that legal contract. In the case of an insurance company like an Allstate or a State Farm and most of the other big insurance companies, we will bend over backwards to meet the terms of the contract.

But sometimes you do get into a disagreement about is what just happened covered under this contract or not. That certainly did happen in the case of a relatively small number of homeowners in the region and it is really complicated. Is something covered? Under a normal homeowner’s policy, you’re not covered for water damage from the sort of event like a Katrina. You are covered if a tree falls down breaks the roof and rain gets in; you’re covered. But unless you’ve bought a special flood insurance policy from the government, you’re not covered. There was absolutely a lot of debate about that. Typically, not unusually, there is a lot of news coverage about the people who have the disagreement with the insurance company and not much news coverage about the hundreds of thousands of people who’ve been very happy with the way that their claim was settled. It is complicated trying to explain the legalities of an insurance contract when people’s homes have disappeared and they have the emotional consequences are very real and insurance companies really sympathize. But unfortunately they are bound by the legal contract and so it becomes an issue. How do you deal with that? I think you have to be persistent and you have to try to explain in terms that really make sense for the average individual what’s at stake and why things happen the way they do. Some of these you’re going to lose, I guess, and some you’re going to win. At the end of the day what we know is we’ll be judged by how well our agents and our claims folks relate to customers over time. Allstate does a fabulous job with that, a fabulous job.

Interviewer:   Are there ethical challenges that corporations are experiencing with all the new portable web-ready devices? Have you experienced any ethical challenges?

Debreceny:   I don’t think that social media tools by themselves or Web 2.0 create additional ethical challenges by themselves. They certainly throw in to sharp relief, the ethical challenges that organizations have because nothing is secret anymore. So in my view organizations should be doing the right thing because that’s the right thing to do. This is a really interesting debate. It goes back for thousands of years. Socrates had lots of interesting things to say about this sort of stuff. But even if you’re an organization now, even if you don’t want to do the right thing because it’s the right thing to do, you should be doing it. It’s smart to do the right thing because you’re going to be found out if you don’t. So I think Web 2.0 certainly exposes ethical lapses more quickly and more completely than previously was the case. But there are lots of ethical challenges and many for our profession, which we prefer not to talk about.

Interviewer:   For which of your accomplishments are you most proud and why?

Debreceny:   I guess the accomplishment that I am most proud of is when I was involved in the first detail with America’s Cup Challenge; that we created a movement that essentially swept the country; that the country got completely wrapped up in, that mattered to everybody. We didn’t win; it was our first challenge. We shouldn’t have been anywhere near being able to win, but we were really close, really close. We could have won and probably just purely on skill should have won, but we didn’t. We lost, and we lost with grace and with dignity. We lost in a way that the country truly respected what the team’s sportsmen had done, but that it had brought the nation together in a way that hadn’t happened in a long time. It was important at the time, so we made a big difference. We had an idea of making the impossible happen and we came within a small distance of making it happen. We took the country with us the whole way through the audacity of the challenge; through the innovation of the response to the challenge; through the commitment and exertion of a group of amazing sports people; through the support of the country’s government, individual politicians and collectively the government and many other countries’ top companies, but also through the power of communications, which was able to make all of that visible to the average New Zealander every day, month after month after month as we were in Fremantle (Western Australia) from October through February, through the Challenge.