And Now It's Time for a Few Words with the CEO

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October 15, 2007

Courtney Barnes

I talk frequently with young people who seek to jump start their careers at my company MSCO. About every fifth one has majored in PR at school or says their burning desire is to be a PR person. When I ask them why, they often say, "Because I like working with people."

"Wonderful," I respond, "but you are not applying to be the Pope. What do you think PR has to do with serving the needs of humanity?"

And they stare at me blank-faced. Why this glazed expression? Because they, like so many others, including those we would think should know better really haven't much of a clue about what PR is.

Which is really our fault. We are the influencers, communicators, idea shapers and we allow most of the Western world to be in a baffled state as to what we do and why we do it? This has to change.

Let's start with the name Public Relations? Sounds like a course in etiquette or a state department code name for turning the masses in a third world state against the ruling junta.

Why don't we say what it really is: The Incredibly Important Function of Making or Shaping News? Ok, hold that thought.

Remember, in case you have forgotten, how vital that function is to every company, every organization, every leader. And with this powerful realization frozen in your mind, recognize that the first market you need to "sell" is your company or clients' senior management. Because too many don't get it.

I am going to address a global conference of the world's leading CEOs in Germany this month. If I had announced that my subject was PR, the hosts would have said, "Thanks, but please stay home." But, not if I told them and sold them on the Incredibly Important Function of Making and Shaping the News. That they would want to hear. That they would need to hear.

In most cases, senior management values PR below finance, manufacturing, HR, sales and marketing. And PR people abhor that. But I say it is our fault.

They can't respect it if they don't know what it truly is. If they don't know that it saved Tylenol. That it made the iPod. That it keeps Jack Welch a legend. And that it can do the same for them. Isn't it time we did PR for PR?

Mark Stevens
CEO

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Always Low Prices, Always S Low Morale?

Most of us already know about Wal-Mart’s notorious employee relations setbacks. But the latest uncovering does raise significant communications questions: How intertwined are employee and customer relations, for one, and why do problems similar to Wal-Mart’s continue to plague organizations?
Maybe the biggest problem is that of sheer enormity: If there is such a disconnect between what executives practice and what they preach, and between separate departments’ strategies for handling issues, then there is little hope for light at the end of this tunnel.

I see this as an enormous opportunity for communications executives, as they are the common denominator – at least they should be – in every business function; after all, they have their hands in employee, customer, media investor and human relations, internal and external outreach, and issues management. Because the connection between employee relations and customer relations is obvious, if not quantifiable – Matt Gonring, a consultant with Gagen MacDonald, has conducted research that inextricably links employee engagement to customer loyalty – it should be natural to address one in order to positively impact the other. Judging from Wal-Mart’s practices, though, apparently its not.

Another point this story raises is that of communications’ integration throughout the business operation. For example, at the Sustainable Brands conference held last week in New Orleans, Rand Waddoups, Wal-Mart’s senior director of corporate strategy and sustainability, gave a presentation on the company’s “new commitment to sustainable business practices.” His speech gloried Wal-Mart as a company that champions CSR and sustainability. However, various surveys (including one conducted two years running by Fleishman-Hillard, which surveyed 800 adults across the U.S.) reveal an interesting twist: When asked to define what CSR means to them, 27% of respondents defined it as "commitment to employees," while only 12% cited "responsibility to the environment."

If these results are accurate, then Waddoups’ account of Wal-Mart as a sustainable and responsible brand doesn’t hold up at all. Zing. It also would suggest that he should have a meeting with other senior execs in his organization to discuss this gaping hole in their strategy.

Chilondoscow? It must be the spotty reception…

Identity crises seem better suited for teenagers and middle-agers, but a fair share of companies seem to have trouble homing in on their “true selves” lately. Take AT&T. Despite what most would call a successful run with their Apple/iPhone partnership, last week company representatives announced plans to rejigger the new corporate identity. Again. This comes in the wake of the recently finalized merger between AT&T and Cingular. But is there any sense in fixing something that isn’t broken?

Apparently, the new plan is to further incorporate Cingular’s signature orange color online, and in billing statements and stores. What’s more, indie film king Wes Andersen has been commissioned to direct six TV spots (he was also tapped by American Express for its “My Life. My Card” campaign). The question is whether or not this is necessary, considering the company’s revenues are surging (having doubled over the course of a year), not to mention the added confusion this could bring to consumers. Cingular was known for its orange hue, true, but should AT&T be? And, isn’t rebranding more than adding a splash of color to a logo?

I would imagine that this decision hinges on bringing Cingular’s freshness to AT&T’s image, which, until last year’s merger, languished as an afterthought in the marketplace. But the partnership with the iPhone makes huge strides in appealing to the young and hip; why, then, dilute the current momentum with another brand concept that may be tough to get off the ground?

Rather than focus on something as shallow as color schemes, I’d argue that the communications executives’ attention should be focused on highlighting the positive initiatives – namely, the iPhone – and addressing the negative brand traits that still seem to cling to the service provider: spotty service and inconsistent billing policies, for starters. Then, they should toss the dreadful ad campaign, which features trios of locations where people live, work and play, and merges the names of each into one incomprehensible word. China + London + Moscow = Chilondoscow. Come again?

With a marketing campaign like this, the brand is only reinforcing one thing: It started out at two different points and got very, very lost somewhere in the middle. 
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Steve Jobs Rocks the Vote

Not all technophiles may be believers, but Apple has certainly wooed enough users to be considered among the best brands in its industry – and beyond. From iPods to MacBooks, its products are recognizable, user-friendly and appealing to people from all demographics. However, Apple CEO Steve Jobs wasn’t feeling the love last week when he announced the price-cut of the iPhone from $599 to $399 – a slap in the face to consumers who waited in line for days – and who shelled out a good chunk of their paychecks – to become proud owners of the revolutionary phone two months ago.

But the company’s sterling customer relations came to the rescue a few days after the announcement, going to show PR professionals how far a little good will can take you. Jobs personally issued a note to all iPhone customers, first assuring them that he had received and read all of their e-mailed complaints; then explaining that the decision was made for the company and the consumers’ highest good; and, finally, offering every iPhone customer who purchased the phone at the regular price a $100 store credit.

Jobs’ quick acknowledgement of his loyal customers’ dismay was a stalwart effort in mitigating what could have become a reputation disaster. His explanation was succinct and honest – he readily admitted that the impending holiday season had an impact on his decision, but he followed with this statement: “Our early customers trusted us, and we must live up to that trust with out actions in moments like these.”

Apple’s success in the marketplace has been so significant since the release of the iPod that it most likely would have survived this price-cut controversy with flying colors; Jobs’ decision to take the fall regardless makes his actions all the more laudable. But the company’s customer-friendly culture doesn’t stop there. In fact, it trickles from the top all the way down to the employees who work in the retail store. Case in point: Two months ago, I purchased a new MacBook and received a rebate for an iPod and a printer. Two weeks after submitting the rebates for reimbursement, I received an e-mail stating that I wouldn’t qualify for reasons that didn’t seem to add up. Feeling betrayed, I went to the store and explained the situation. Within five minutes (and with the help of three eager cashiers), I had a $200 refund. That’s why, one week later, I was surprised (and thrilled) to receive a check from Apple for an additional $200 – a gesture that was above and beyond what I expected.

A willingness to acknowledge legitimate customer qualms and to address the issue fairly will, in the end, improve your brand’s position. Their actions certainly got my vote, and my money – I happily spent the extra $200 on Apple accessories, and I’d do it again in a second.

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Kids These Days – As If Dog Fighting Wasn’t Enough

Apparently Michael Vick’s inhumane extracurricular activity hasn’t only wrecked his reputation; now his generation is taking a fall as well. As reported by others around the Web, Vick’s Falcons teammate, defensive end Chuck Smith, offered the following explanation for his behavior, at the same time criminalizing Gen Y-ers as wayward decision makers due to the influences of online media:

“Michael Vick is the first generation of superstar. I call it the ‘why’ generation – ‘why’ do they do what they do? They’re influenced by the blogs, YouTube, MySpace … For Michael Vick, it’s a gift and a curse – the gift of being the most publicized athlete in the world, but also it’s the curse when you get in trouble…”

There are a few flaws with this rationalization. First of all, Smith stepped in and played the blame game for Vick, who (finally) took responsibility for his participation in an underground dog-fighting ring last week. In a reputation crisis, pointing fingers is risky business when it is impossible to obscure the real culprit – especially when you are pointing fingers at inanimate objects like YouTube.

But more troubling is Smith’s attack on the entire generation of 20-somethings, whose report with online communications channels apparently equates to being unable to make sound decisions. This feeling has profound business implications, as managers are seeing their fair share of generational conflicts within their organizations. After all, Y-ers climb the ranks and are managing their “elders” more and more frequently despite (or because of?) their “self righteous,” “entitled” and, according to widespread beliefs, generally distasteful personalities.

However, by ignoring talent management challenges, executives set themselves up to endure reputation crises as bloody and defacing as Vick’s current disaster. Granted, it won’t involve the mistreatment of animals, but it will weaken their organizations by fueling tense employee relations. Communications professionals are poised to step in and mitigate this challenge by encouraging senior managers to stop resisting these “cultural” changes, and by training Gen Y-ers to represent themselves in ways that command respect rather than resentment.

As for Vick, suffice it to say that social media was never his problem, and that digging himself out of holes was never his strength. He committed a number of cardinal communications sins when facing the allegations. First, he rabidly denied the charges and defended his innocence. When sickening details emerged in the investigation, Vick did admit guilt, but any redeeming qualities of his public statement were marred by his initial betrayal. When at fault, the first words out of your mouth should be those of admission; the second should be those of apology. 

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Toys for Tots: Who Should Really Be in the Hot Seat?

Made in China.

It’s a common epithet attached to hundreds of millions of brands that circulate worldwide, but events in recent months have made it a tagline befitting of the grim reaper. Glaring safety oversights of Chinese producers and manufacturers have resulted in the deaths and injuries of puppies, kittens and, most recently, young children. The latter group of victims comes with the news of Mattel’s second toy recall in a year, this time of Chinese-made toys contaminated with lead paint. This recall follows that of magnetic toys with faulty designs in November 2006.

Understandably, Mattel is in the hot seat for selling toys that should have never passed safety tests. However, until recent blips, the company had a stalwart reputation for being a conscientious toy maker with advanced inspection systems in its China factories, thus raising a key question: What’s going on in China?

Mattel’s current PR problem is a crisis management case study in the making, and communications executives are taking steps to rebuild trust in its brand and to reinforce its concern for safety. The team launched an advertising campaign with the headline “Because your children are our children, too,” and spokespeople are constantly reiterating the company’s investigation of the matter.

But what of China’s response? Contaminated pet food, deadly toys, defective tires – none bode well for a country whose economy is dependent on revenue generated from exports. According to a recent Financial Times report, “China” says that over 99% of its exports are safe, but that’s not very comforting when the country pushes a trillion dollars worth of exports annually. With numbers like that, even 1% adds up to a lot.

In short, there are two public relations situations here: the handling of a product recall for Mattel, and the overall reputation crisis for China. When it comes to product recalls, communications best practices include over-communication, complete transparency and bringing in independent third-parties to test and ensure safety. Mattel should follow the example of Johnson & Johnson, the archetype of product recall prowess. As for China, its next PR steps are anyone’s guess. Perhaps people should get used to hearing “Made in Singapore.” It has a nice ring to it, don’t you think? 

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Oops, They Did It Again

Cyberspace is not a playground, or a mud-wrestling pit, or a platform for flame-throwers.

It’s a lesson you’d think you’d be telling your 14-year-old kid who doesn’t understand the risk of his wacky (or risqué) blogosphere banters, but apparently you should consider taking the warning to the workplace – and maybe even hand-delivering it to your CEO.

Case in point: Whole Foods CEO John Mackey has created an organic mess out of his affinity for anonymously (until now) denouncing competitors on Yahoo! financial message boards. His PR/communications team most likely wasn’t aware of this pastime, but its recent entrée into the public domain reiterates the importance of keeping your C-suite executives informed on the opportunities – and dangers – of digital communications.

The messages Mackey posted allegedly date back to seven years ago (which is ironically impressive that he even knew how to use the technology in digitalization’s relative infancy) and number in the thousands. And while technically not unethical – but definitely well in the realm of a really bad idea – his definition of “fun” is PR’s definition of transparency, which is all the more relevant in today’s digital environ. Edelman and Wal-Mart learned the hard way with their faux-folksy “Wal-Marting Across America” blog, and now Whole Foods will suffer the reputation consequences. Maybe those consequences will be more of embarrassment (after defaming rival Wild Oats for years, he has recently made moves to buy shares) than anything, but only time (and board-of-directors decisions) will tell.

In the meantime, Mackey should probably abandon his keyboard for greener, safer, more organic pastures. 

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Got a Breaking View to share? Contact Courtney Barnes at cbarnes@accessintel.com

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