Sunbeam: Lack of PR Hurts Image In Wake of Financial Crisis


PR at Sunbeam Corp. [SOC] is proving elusive, as its reputation is suffering amid plunging stock prices, a fired CEO and a Securities and Exchange Commission investigation of its accounting practices. In the past year, the company has endured so many image slayers, it would seem PR would be at the forefront of its strategy. But Sunbeam seems to be dodging the press, its customers and employees. PR NEWS has learned that Sunbeam, a $1.68 billion company, doesn't have an internal PR department. And it outsources its crisis PR to a New York-based firm, Sard Verbinnen, which didn't respond to our press queries. And apparently it doesn't have a corporate communications department, but company officials refused to disclose that information. Additionally, a Wall Street analyst, who covers Sunbeam and asked to remain anonymous, last week told us it's very likely that the company will file Chapter 11. Seems to us this would be a crucial time to closely manage the press and other PR efforts, especially when much of what's in the public domain is journalists' accounts of axed employees rejoicing when they heard that the board of directors canned CEO Al Dunlap. Sunbeam's lackadaisical attitude about communications comes at a time when there couldn't be a stronger link between corporate reputation - public and internal perceptions - and financial success. Experts contend satisfied employees and loyal customers can affect revenue. A 5 percent increase in customer retention has the same impact on net profits as a 25 percent increase in market share, says Christine Loeffler, an independent strategic consultant in Davidson, N.C., who researches the topic. The Sunbeam dilemma provides a textbook example of the lack of PR being linked to a failing corporation - proof PR executives have been seeking for decades. Too often, companies only court Wall Street by cutting the work force and closing plants and ignore customer and employee insight. "[In communications] this is an example of the other woman. This is a company that looked to Wall Street as its mistress and forgot its family - its employees and customers," she adds. No PR Shining at Sunbeam To chronicle what has happened at this Delray, Fla.-based company on the communications front has become an exercise in frustration. Two weeks ago, PR NEWS began an analysis of how this company plans to rebound from recent blows, including the ousting of Dunlap. Dunlap, who earned the nickname "Chainsaw" by cutting jobs at other companies, slashed about half of the corporation's 12,000 employees in the past two years. He was let go around the middle of June, but his lack of emphasis on communications still is apparent. Sunbeam does not support a corporate clearinghouse for press inquiries. When we called to speak to corporate communications, a receptionist transferred us to Ron Richter, telling us he was in charge of PR. Richter, Sunbeam's treasurer, recently handled IR for a brief stint. He failed to return several calls and then, once we did reach him, said that he had nothing to do with PR. The IR responsibility has been handed back to VP Mark Shiffman who wouldn't speak to us, but passed us on to Maureen Bailey, VP of Sard Verbinnen, the PR firm it hired in May for crisis counseling. Bailey said she didn't want any publicity about her company's dealings with Sunbeam and that she'd speak to us after reviewing the newsletter. We faxed her 16 pages last Tuesday and she has been unreachable up to our deadline. It's questionable why a PR agency hired to handle crisis management for Sunbeam would make little effort to speak to the press. Sunbeam overall has had little voice in the slew of recent media and financial community criticism. Months ago, Sunbeam dropped its PR agency Hill and Knowlton, the firm that handled media coverage of its failed endorsement deal with the American Medical Association. (PR NEWS details this in its "The Good, The Bad And The Ugly" report; for a copy, call 888/707-5814) The lesson: If your company is floundering, don't look to Wall Street as the knight in shining armor. A company in this state must immediately establish a dialogue and rapport with its employees. Start out with meetings to learn what employees are hearing about company strategy and host breakfast forums to educate them about what's happening. It takes years to pull out of something like this. For example, Sears, Roebuck & Co. [S] is a testament to the power of communications during a major image overhaul. By targeting employees and customers, it has re-emerged as a success story. Should Sunbeam survive and decide to make its employees key to its success, it will have to spend millions of dollars annually over two to five years to establish communications programs and make sure its employee/customer relations are in sync, Loeffler told us. (Maureen Bailey, 212/687-8080; Walt Lindenmann, 212/448-4213; Christine Loeffler, 704/896-5927; Sunbeam, 561/243-2100) Monitoring Employee Morale: When They 'Can't Get No Satisfaction' As communicators rack up more proof of the effect employee satisfaction has on profitability, you can help your company be a leader in this area by conducting in-depth surveys, according to Walt Lindenmann, senior VP/director of research at Ketchum, New York. Determining how satisfied your employees are requires that you measure how they perceive a range of variables. On a scale of -5 to +5, says Ketchum, ask them to rate the following (lower scores mean unsatisfied workers): The amount of challenge they experience on the jobThe actual work they performThe amount of recognition they receive for performing wellCompensationOther types of rewards earnedThe link between good performance and increased compensation or other awardsGrowth opportunities for individuals according to their background and experienceSense of empowermentSupport received from supervisorsTrust toward company management and their supervisorsSense of commitment to and satisfaction with actual work performedWorking conditionsContribution to performance andSense of company pride.

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