By Katharine Delahaye Paine
History 101
In examining the crises spotlighted this month, it occurred to me that companies or organizations, in their rush to communicate the "news, " forget that they often have some history to overcome or to which to live up.
Take recent labor actions against two admittedly disparate organizations: General Motors (GM) and the National Basketball Association. The progression of media coverage of each is very much a reflection of each one's history.
GM has a history of confrontational relations with its unions, and as a result, the unions seemed to get the better of the press coverage. On the other hand, until this fall, the NBA was the only national sports organization to escape an out-and-out confrontation with its workers. Its strike-free history left the media, at least initially, reflecting more the opinions of management.
An additional challenge when confronted with a labor crisis is the mixed messages it sends. To keep stockholders and investors happy, both organizations have bragged about their excellent sales revenue. Recent history has provided a string of financial good news stories for both institutions. Therefore, the same reporters who have been getting those "good news" press releases initially see a very different story than do the unions. And in both cases, the unions wound up doing an excellent job communicating their side of the story.
GM Fails to Drive Home Lesson About Crisis Management
This was GM's nightmare year. Strike after strike loomed, and eventually hit the company. The battle lines were drawn early on and GM was determined to cut costs even if it meant a lengthy strike. The union was equally adamant, figuring - as usual - that concessions granted to them at GM could quickly translate into concessions at all the other car manufacturers. The war of the words became a real strike in early June.
General Motors
Headquarters: Detroit
1997 Revenue: $178 billion
No. of Employees Worldwide: 608,000
No. of Employees in Corp. Comm: GM Would not Disclose Because of Restructuring
| Criteria | Grade | Comments | Advice to GM |
| Extent of coverage | C | The strike was one of the top-ten most covered stories of the year - ultimately influencing the whole U.S. economy. Making the headlines go away was not an option for either side; minimizing the damage was nearly impossible. The best management could hope for was equal time. | The bigger the target, the more there is to shoot at. GM is just about the biggest target out there. Keep expectations realistic among your key constituencies (employees and investors) and keep open all channels of communication. |
| Effectiveness of spokespeople | D | In most of the early coverage, the union was quoted first and far more frequently than GM management. This allowed the union to get out its messages far more effectively. It wasn't until a settlement was near that GM spokespeople became more visible and vocal. | Get your trained, credible spokespeople out in front of the media early and often. This is a large part of keeping channels of communication open. |
| Communication of key messages | C | GM's major message, as communicated in the press, was its need to improve company efficiency which no doubt played well with the investment community - but not with the media. Even automotive trade editors jumped on the bandwagon, suggesting the company had lost sight of its core business. | Remember your audience. While your primary audience may be the investment community, don't expect the press to carry the correct message to Wall Street - many reporters are union members. |
| Management of negative messages | D | The enmity between the two sides was very evident in the news coverage. Accusations were flung back and forth and the UAW generally seemed to be getting its perspective out far more frequently than GM was able to oppose it. GM did not appear to be ready and when the strike broke, the UAW clearly had its messages and spokespeople well-prepared with sound bites and accusations. | Not much can be done when faced with a very vocal and well-prepared enemy other than to be more vocal and better prepared with messages. |
| Impact on customers | C | News coverage implied that GM products would be in short supply, though improved efficiency is not a bad message for customers as well as investors. | Continue to assure customers that their interests are top-of-mind. Don't focus solely on the bottom line. Discuss the issues from the customers' perspectives as well. |
| Impact on investors | D | In the end, the strike no doubt cost GM hundreds of millions of dollars - not a good message for the investment community. In many ways, the efficiency gains originally sought by management were not communicated dramatically. | GM needed to do a better job explaining not just the reasons for this strike but for its whole history of labor relations. Too often, it was unfavorably compared to other auto manufacturers who have far more cooperative relationships with the UAW. |
| Impact on employees and prospective employees | D | The UAW tried successfully to convey the idea that GM was more concerned with profits than with its commitment to people. This is certainly not what you want your employees to think. | More than ever, GM needs a strong internal communications campaign that doesn't just tell the story, but educates the employees on the rationale behind all business decisions. |
| Overall score | C | In the end GM's eye was blacker than the union's, most notably because of the enormous cost of the strike and continued reputation damage. The union was simply more effective at getting its messages across and winning the hearts and minds of constituencies it shared with GM. | Don't be too proud to emulate smaller companies. GM can't escape its history or what it is. It may never be a Malden Mills or a Body Shop when it comes to employee and customer relations, but if it wants to avoid the losses and bad press that strikes inevitably bring, it should take some lessons from those companies. |
...And NBA Fails to Score on the Crisis Court
While other sports leagues occasionally cancel whole seasons during labor strife, the NBA profited madly as viewers switched to basketball in droves. In recent history, the NBA has had a sterling reputation as a sports marketing organization. As with any company that is flying high, however sooner or later the press will begin to take advantage of any negative. So when the players were locked out and negotiations forced the cancellation of the first half of the season, the media enjoyed a feeding frenzy. The idea that a player or owner making millions would require more money was something the media has had a field day about.
NBA
Headquarters: New York
1997/98 Stats: 1,189 games played, with average attendance 17,135 At Each Game
No. of Employees: 800
No. of PR Staffers: Would Not Disclose
| Criteria | Grade | Comments | Advice to NBA owners |
| Extent of coverage | D | Because the NBA is a household name (in the TV room, to be exact), anything significant about it will garner lots of headlines. Any time a sports season is postponed or canceled, the mainstream media as well as the sporting press, become involved. The publicity surrounding the players meeting in Las Vegas was over the top, ensuring the story would not quietly go away. | Keep getting your messages out. For much of the coverage since before the lockout was officially announced, the NBA did a great job explaining its position. Meanwhile the union looked disorganized and the players looked greedy. |
| Effectiveness of spokespeople | B | Early on, the NBA clearly had the upper hand but after the players met, the union began to get its point of view across and, oddly, the NBA did not respond immediately. | Be as visible and accessible as your opponents no matter how rich and famous they may be. |
| Communication of key messages | A | Throughout, the NBA did a great job communicating that the players already make a lot of money. Simultaneously, they nicely sidestepped the issue that the NBA makes a boat load of money as well. | The NBA had a clear advantage in that they only needed to appeal to the media's and public's common sense and reason. That isif the average player earns $2.5 million, what does he have to complain about? If you have a logical and simple argument, communicate the heck out of it. |
| Management of negative messages | B | Very few negative articles appeared about the league itself. Most negative messages were directed at the players, while the union was incredibly bad at managing its own messages. It wasn't until after the players met in Las Vegas that their view was communicated at all. | The NBA kept the spotlight on the high-salaried players, and, thus, on the bottom line - the salary cap. The lesson was: don't get sidetracked. Focus on one message that works for you (in a variety of ways) and repeat it. |
| Impact on customers | D | In all the hubbub, NBA fans were the biggest losers. They don't want to miss a whole season of basketball, nor do they want to be constantly reminded that the reason for the lockout is that some of their favorite players are asking for more money. | In any dispute, the customer must come first, because retaining customer loyalty through a labor action is incredibly difficult. Just ask UPS. |
| Impact on investors | N/A | But the fans weren't the only losers. Thousands of small businesses (i.e. vendors) and those that invest in individual franchises lose money until the first game is eventually played. |
|
| Impact on employees and prospective employees | B | The whole episode does little for the reputation of the game, and only reflects badly on those who work in the sport (players and non-players alike). | Labor actions are emotionally hardest on employees whose loyalties can be torn in many different directions. Ensure that your internal communications are even better than your external and that employees (i.e. non-athletes) are made to feel valued at all times. |
| Overall | B | "No matter," you say. It's hard to be sympathetic toward players who make more money in a season than most fans see in a lifetime. The NBA did a good job coming down on the side of widely-appealing logic and simplistic reasoning. | When you have logic and reason on your side in a crisis, you start with a huge advantage. The lesson - make sure you have both on your side BEFORE the crisis hits. |
Katharine Paine is founder and CEO of The Delahaye Group, an international image consulting firm based in Portsmouth, N.H. If you have a suggestion for an Image Patrol column, you can reach her at 603/431-0111. URL: http://www.delahaye.com