Monthly Archives: April 2011

A Royal Wedding Provides A Reputational Boost for the Monarchy

I remember setting my alarm to wake up early and watch another royal wedding…the wedding of Lady Di and Princes Charles.  Since then, the British monarchy’s reputation has taken a beating – with the tragic death of the world’s most beloved princess, the subsequent public relationship of Charles and Camilla…it was a story filled with tragedy, and a reputation suffering from a lack of relevance.    The monarchy was old, stodgy and not particularly sexy or interesting.  Until Kate Middleton came along.  Fashionable, confident and open, her engagement to Prince William gave the royal family instant relevance, and once again sparked a new affection and interest in the royals.

Prince William has grown into a young man with a public persona more like Diana than Charles, with a genuine smile and an approachable demeanor.   Kate is a poised “girl next door” who married the handsome Prince.  Their photos reveal genuine affection and a spirit of fun that we haven’t seen since the legendary photos of Diana running off the airplane to embrace her boys.

This could be the beginning of a reputational rebound for the royals. With the bookmakers seeing bets on everything from the dress to the appearance of the first royal heir, only time will tell if the royal reputation can rebound for the long term, of if this is just a wedding related “bubble.”

Does the Term “Public Relations” Have a Reputation Problem?   Three things that can change the reputation of PR for the better.

Shakespeare said a rose by any other name would smell as sweet.  Can the same be true for the term public relations?  If you follow the industry blogs at all, over the past few days there has been some interesting conversation about the term public relations v. the term communications – which one is narrower?  Which one is broader?  Which one better describes what we do? Most of the pundits seem to agree that public relations, when done well, is more than communications – communications is one just one facet of public relations.  Others advocate for a different term entirely – like reputation management.

The fact that there is this much debate suggests that the term public relations – too often cast as “spin” and suggestive of manipulation or downright dishonesty – has a reputation problem.  And that problem is usually based on a bad experience someone has had with a PR firm.  Like every relationship, agency-client relationships begin with baggage – of the agencies that pulled a bait and switch, or failed to deliver – of the clients who put their team in a compromising position with a journalist or an industry association.   This isn’t something that can be changed by changing our vernacular.

So what’s the solution?

  1. Know your client’s baggage and their organizational attitudes about PR.  If offering a communications strategy (vs. a PR Plan) is the path to building consensus, securing budget and getting the opportunity to demonstrate the value of PR, so be it.
  2. Practice your profession with integrity.  Provide your best advice.  Be honest and transparent in all you do for your client, and on your client’s behalf.
  3. Think holistically, broadly and strategically.  Provide integrated programs that meet your client’s business needs.  Sometimes that means partnering (and sharing your budget) with a third party.

Earn your clients’ trust, and the reputation of PR will surely follow – one client and one company at a time.

How Does It Play in Peoria?

That old journalism saw took on real-world significance recently when Peoria-based Caterpillar, one of the largest employers in Illinois and the world’s largest maker of heavy equipment for construction and mining, hinted that it might move out of state. Late last month, a supposedly private letter from Caterpillar CEO Douglas Oberhelman to the Illinois governor leaked out, became instant news and spread far beyond what in the old days would have been the big story only in Peoria and the state capital, Springfield.

According to the leaked letter, the CEO was not happy about a state income tax increase, onerous workers’ comp rules and what was characterized as a generally unfriendly business climate. He said a number of states were trying to snag Caterpillar’s headquarters. As traditional and social media pounced on the news – from broadcast to print to partisan blogging – a great deal of speculation and finger-pointing ensued for days, creating a “blame game” atmosphere where someone needed to act, and fast, to preserve 23,000 jobs in Illinois.

Last week, after meeting with the governor, CAT’s CEO said the company was staying put and going to push for improvements in the business climate. That put an end to the flurry of media coverage, and both CAT and the Illinois governor made a point of saying that Oberhelman’s initial letter was taken out of context.  But ultimately, that doesn’t really matter. What mattered was that in the era of social media, negotiations of this sort can become public literally within seconds and create external pressures that don’t quietly go away.

The reputation lesson in all of this, as we know from our clients, is that attempts to lure major employers out of states where they’ve resided for decades or even centuries are going on every day across the country and in increasingly hard-ball fashion. While companies analyze these opportunities from a financial perspective and make their decisions accordingly, preparing for a leak and having a communications action plan ready to go is also critical. How the story plays in Peoria is no longer as meaningful as how it plays everywhere and anywhere.



Goldman Sachs – Vampire Squid or Snake Pit?

While it pales in comparison to Rolling Stone reporter Mike Taibbi’s famous description of Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money,” Senator Carl Levin (D-MI) added his take with the release of yesterday’s Senate report on the financial crisis calling the House of Blankfein “a financial snake pit rife with greed, conflicts of interest, and wrongdoing.”  The report itself points accusing fingers across Wall Street for everything short of murder in the run-up to the financial crisis and lambasts Washington for either being too cozy with bankers or asleep at the wheel.  Yet the most robust criticism and best reading is that related to Goldman Sachs.

In his remarks, longtime anti-Goldman crusader Levin spoke of DOJ and SEC investigations and perjury charges from misleading testimony before Congress.  This has led some commentators to get almost giddy about a new round of perp walks for some of investment banking’s glitterati.

A focus of the Senate report was Goldman’s bet against the mortgage market while it also was playing games with its clients and the market in general.  Goldman reaped some killer profits but in the last few years, it has been those who have shorted the reputation of the former paragon of investment banking and its beleaguered CEO Blankfein, who have been the winners.

A Goldman statement regarding the Senate report said that the firm “disagreed with many of the conclusions”, but said it did “take seriously the issues explored by the subcommittee.”  So what does Goldman do now?

In reaction to the Goldman-bashing of the past few years, the firm has issued a number of mea culpas (and refrained from referring anymore to doing God’s work), published a list of 39 things it promises to do better in managing conflicts and client relationships, initiated some big ticket philanthropic efforts to rebuild its image and even paid $550 million to the SEC for indiscretions with CDOs.  It all hasn’t bought them much loving.

Since words, self-improvement plans and throwing around a lot of money has not worked, it may be time for Goldman’s board to consider some changes on the executive wing.  New leadership, a more humble approach and some quick and decisive action on the issues raised in the Senate report could stop the reputational bleeding at Goldman and help the firm take the initial steps to rebuild its reputation.  We may still see a perp walk but perhaps the allusions to squids and snakes will begin to fade away.

The Death Penalty is Killing America’s Reputation and the Reputation of Officers of the Court

I am opposed to the death penalty, let me just put that out there.  I don’t believe killing is right.  I cringe at the hypocrisy of death penalty advocates who spend Saturday mornings protesting at abortion clinics, because every life is sacred, then go to prisons on Thursday to applaud the execution of adults- usually poor, minority men who’ve been poorly represented in our legal system.  What is increasingly disturbing is that with the increasing availability of DNA testing, we are learning that these people are not guilty of the crimes for which they’ve been condemned. Since 2000, nearly 200 convictions have been overturned as a result of DNA testing.

What does our love of the death penalty, particularly in light of DNA testing’s suggestions that its use in our nation is flawed and in some cases, unfounded, do for our reputation as a world leader?  As DNA evidence routinely reveals that investigators and prosecutors have hidden evidence that would exonerate the accused, our trust in the system – and our belief that it is the best system in the world – is broken.

In 2010, we executed 46 people….more than Libya, Iraq, Bahrain and Saudi Arabia.  The only nations who executed more people than us were China, Iran, Yemen and North Korea.    Leaders are judged by the company they keep.

The Unites States can’t be a world leader simply because we claim to be one.  We need to act like one.

The Real Value of the First 100 Days

It’s that time again….the end of the First 100 Days of the new Congress, of new Governors.  Ever since FDR pioneered the concept and offered America the New Deal, the First 100 Days have become a benchmark used by leaders in both the public and the private sector.  In today’s nano-second world, 100 days can feel like a lifetime…yet the complexities of leadership today can also make 100 days seem very short.

Which begs the question – is 100 days a meaningful metric, or is it just hype?

I think it depends on how you define success.  The idea that 100 Days is the be all and end all – hype.  The value of the first 100 days is that it is a “fresh start” period – one where your stakeholders are listening and paying attention – they are looking for direction and guidance.  They want to be led.  Lead and communicate effectively in the First 100 days, and the job of continual leadership gets much easier.

The First 100 Days can be an effective tool for building reputation and establishing leadership.  Here are my 5 Golden Rules for effective 100 days programs, and sustainable leadership.

  • Define success…and its interim benchmarks – this is a unique opportunity to change the yardstick by which you will be judged. Set goals, and tell stakeholders what the interim success steps will be.  This is a tried and true strategy for IR/financial communications that is equally effective with multi-stakeholder programs.
  • Listen Actively – leadership transitions always mean change – whether a moderate evolution or a dramatic revolution. Your stakeholders will be listening to what you say, but more importantly they will be watching what you do.   Do you walk your talk?  And do you really hear their concerns, suggestions and observations?  Seek feedback.  Encourage dialogue.  Success today requires conversation, not just messaging.
  • Establish and articulate priorities – it might be your vision for the Company. But if a leader is new to an organization after an abrupt transition, you may need to use that initial period to learn and formulate a plan.  But even if a plan is underway, you can define the process for creating a plan, and articulate big picture goals for the organization.  Don’t assume people know what is important….you need to tell them.
  • Translate priorities into individual actions – It’s easy to say “We need to be a more customer centric organization.” But what does that mean to individuals in different departments?  What do you want them to think about?  And what do you want them to DO differently?  Be clear about the “how” and the “why” as well as the “what” (the goal).
  • Cultivate, recruit and engage your advocates and third party endorsers – To be successful, every leader needs ambassadors and embassies. The time to recruit and cultivate advocates and ambassadors, both within your organization and outside your Company, is now.  And don’t confuse “yes men” with advocates.  Often the most vocal and effective advocates will be the ones who have questions, or are skeptics…because once they buy in, they really believe.   Their questions are good indicators of the issues that others may be thinking but not saying.


Airplanes Shouldn’t Have Sun Roofs: The Gaping Hole in Southwest’s Reputation

I was traveling last week when Southwest made its announcement about grounding flights for inspection after passengers on a flight experienced the reason that airplanes don’t have sunroofs.   Suddenty all of the pre-flight stand up comedy about safety didn’t seem so funny, as passengers blacked out while the aircraft dove to an altitude where oxygen masks wouldn’t be necessary.

Southwest has catapulted from the scrappy start up who mastered the quick turn and whose culture and cheap fares made them the airline everyone loved to fly.  And they’ve enjoyed cruising on that reputation for many years. They embrace being an industry outlier – air baggage handlers proudly promote that they load free bags, for example.   Will safety concerns put a chink in Southwest’s previously “bulletproof” reputation armor?

In the airline business, safety is the greens fee.  And while the airline has worked hard to minimize the concerns, that very attempt to minimize the issue may be reputational suicide.  I was in the airport while the “minimally disrupted” passengers were told they would not get to their destinations for TWO DAYS.

There are other indications that the reputational decline of Southwest are on the horizon.  Southwest ranked 5th (out of five) in the “kindest airlines” rankings – which is based on performance data, not customer opinions.

What should Southwest do?  Educate their stakeholders, in the authentic Southwest fashion.  For an airline that is known for its use of candor, embracing dialogue and utilizing all channels, Southwest’s response to this situation has been decidedly by the “textbook” – straightforward statements issued via traditional means.  Technical language about the “non-destructive test (NDT) in the form of High-Frequency Eddy current of the aircraft skin” doesn’t make customers feel safe.  Southwest should think about how to make the technical aspects of safety accessible, meaningful and engaging.  For the short term, they should balance the dialogue about free bags with dialogue about safety.   And they need to keep the sunroof closed.

New on RoR: @SouthwestAir needs to use its usual candor to embrace passengers’ safety concerns: #reputation

No Longer the Oracle?

Warren Buffet is famously known for saying, “lose money for the firm and I will be understanding; lose a shred of reputation for the firm and I will be ruthless.”  The quote and the speaker are often seen as benchmarks for those of us in the reputation management business.  However, the Oracle of Omaha is now embroiled in perhaps the biggest reputational crisis of his career after the surprise resignation of heir apparent David Sokol.  The story has pivoted into a fulsome discussion of Buffett’s image and how much he knew or wanted to know about Sokol’s purchase of Lubrizol shares and subsequent recommendation of the company to his boss prior to Berkshire Hathaway’s purchase.

Buffett’s press release/letter on the subject, starts by expressing shock at Sokol’s departure and praises his extraordinary contribution to Berkshire Hathaway.  He ‘secondly’ discusses the Lubrizol situation and concludes that nothing unlawful occurred.  Unfortunately, regulators, who have already started investigating, may not see it that way and the incident has unleashed a relative savaging of Buffett by a normally fawning analysts and media.  Yesterday’s column by David Weidner in the Wall Street Journal goes so far to as to chronicle a decade-long decline in Buffett’s mastery of his reputation.

The Sokol fiasco and media frenzy of the last ten days is guaranteeing that the Berkshire Hathaway annual meeting later this month will not be the usual lovefest in Omaha.  The folksy Q&A format will no doubt be a lot more tension filled.  Buffett has said that he will simply refer any questions on the Sokol and Lubrizol matters to the press release/letter issued on March 30.  But that just won’t cut it.  Buffett has already damaged his reputation by not addressing the very real concerns on the issue and any stonewalling at the annual meeting will only do further damage. He needs to meet this crisis head on and draw on his strength as a plain-speaking Nebraskan to tell shareholders what he knew when he knew it and show some ruthlessness regarding his and Berkshire Hathaway’s reputation.  Buffett has already wasted precious time but the goodwill he has engendered over the years gives him a chance to rebound.  He needs to be his usual candid self and provide the answers his audience wants.  A better mea culpa, if his lawyers let him, also wouldn’t hurt.

As he prepares for the annual meeting, Buffett can refer to the recent DealBook post by the New York Times’ Andrew Ross Sorkin, one of the media regulars at the gathering, for a great list of questions to prepare for.