Disturbing Conventions

The Costa Concordia and Fact-based Crisis Response

Peter Hirsch — Fri, 20 Jan 2012 21:33:35 +0000

The evolving story of the ill-fated Costa Concordia is an almost casebook illustration of the dangers in crisis response of rushing to place an interpretation on a murky situation too quickly. It may well be that the “hero/villain” narrative elevating the Coastguard captain and demonizing Captain Schettino turns out to be correct. However, the emergence of conflicting data about the pattern of Costa Cruise ships route deviations suggests that much has yet to be learned that may not reflect so well on the company, as FT.com suggests today (“Focus Shifts from Ship’s Captain to Company”). It can be very stressful to withhold judgment in these circumstances but it is critical in order not to box oneself into a corner.

By contrast, some steps in crisis response should be undertaken without delay even before all the facts are known. In this spirit, it was much better news that the parent company Carnival is launching a “stem to stern” audit of all its safety and emergency practices for every one of its cruise lines. This makes emotional and psychological sense and represents a logical human response to the fear and pain people feel in response to such a crisis, irrespective of the cause ultimately determined.

My Boss is a Sadistic Cockroach

Peter Hirsch — Tue, 06 Dec 2011 13:55:09 +0000

The National Labor Relations Board has recently begun warning employers that restrictions on employee use of social media may violate labor laws for both union and non-union employees. This is because the 1935 Wagner Act generally protects the right of employees to talk to each other to discuss employer conduct, wages and working conditions, so-called “concerted activity.” According to legal experts cited in yesterday’s Wall Street Journal, name-calling plain and simple probably isn’t protected, but more than a 100 employers have recently been accused of improper application of social media policies as it relates to employee comments online. The NRLB has so far left a number of areas unclear such as the relevance of an employee posting a rant from a workplace computer, but it seems clear to us that this is another case in which employers need to be very cautious about censoring or firing employees for anti-company or anti-supervisor statements. The NLRB may yet deem that a posting on Facebook by someone with workplace colleagues as friends constitutes de facto “concerted activity.” This is just another area in which social media has opened up a new avenue for potential reputational damage and a further reason why handling your “talent” well has become a critical brand strategy.

Good Morning, Data Subject #21984756

Peter Hirsch — Mon, 26 Sep 2011 13:27:11 +0000

The Wall Street Journal has laudably made a big deal of data privacy over the past year, particularly with respect to super cookies and other tracking software. Today’s edition carries Julia Angwin’s story about the rise of the chief privacy officer, citing GE and HP among the usual suspects leading in this new field. Are IP addresses and device identifiers personal data? The FTC isn’t sure yet but European governments have taken the lead in trying to protect citizens’ private data, forcing global companies to look closely at their practices in this area.

To our eyes, this is another area in which companies can create reputation-building power by embracing high standards for personal data use, transparency about their practices and easy to use problem/resolution pathways. Appointing a chief privacy officer is not a bad place to start. As Scott Taylor, HP’s CPO, puts it: “if you think about the delivery of this project, is there anything that might surprise the data subject?” That’s a good place to start.

We Are the J Students! We Are Proud!

Peter Hirsch — Fri, 19 Aug 2011 18:41:34 +0000

Yesterday’s news brings yet another tale of unanticipated reputational threat arising from the terminally outsourced world in which we currently live. We can, I think, confidently say that the Hershey chocolate company never in its wildest imaginings considered the possibility that employing international students through a government program would become a “sweatshop” flash point as reported in today’s New York Times

This most recent example of the networked enterprise focuses our attention once more on the critical need for employers to have transparency in their supply chain. Many years ago, energy companies tried to argue that because the tanker truck in the freeway pile up was operated by a contractor, they bore no responsibility. That argument didn’t wash then and any suggestion that a long outsourced HR supply chain absolves Hershey of responsibility for work performed to get its own product to the end customer would be equally wrong. The vigilence is all, and having ordinary managers who can spot an obvious disconnect when they see one.

Hack Hacks Shutter Rag

Peter Hirsch — Fri, 08 Jul 2011 15:13:37 +0000

The New York Times barely concealed glee at the misfortunes of News Corp. shouldn’t distract us from this rare example of crisis over-reaction. The negative response to the decision to shut down The News of the World, which may well have had iron-clad operational logic, demonstrates that in every crisis there is an irreducible narrative arc that must not be violated. In the context of the ongoing uncertainties about whose cell phone was hacked by whom, shutting the newspaper was akin to knocking off the key government witness prior to the trial. The News Corp.’s explanation for the decision was also a textbook non-explanation explanation. The New York Times called James Murdoch’s statements “a striking example of self-critical apology” but if all the key players, James Murdoch and Rebekah Brooks, among others, remain in place, this is an odd sort of self-criticism. Rather like the exquisite torture of business executives appearing before a Congressional committee in order to provide headlines for politicians, it is sometimes most effective simply to stand out in the withering fire until public interest begins to fade. By attempting to bring down the curtain prematurely, to mix metaphors, News Corp. has robbed the public and the politicos of their moment of hypocritical self-righteousness and it will assuredly not smooth things out for the BSkyB deal. The only effective brand recovery has to include publicly acknowledged learnings. Riding out of town in the dead of night makes this hard to do. There will be more twists and turns before the public has had its fill of this story.

Jack Dorsey is not Johannes Gutenberg

Peter Hirsch — Thu, 16 Jun 2011 13:33:09 +0000

Let’s call it The New York Times effect. Just as surely as buying the naming rights to a sports complex is the inflection point at which a corporation’s fortunes turn south, a phenomenon covered to saturation by The New York Times is doomed to disappear before very long. Yet another heavy breathing story about Twitter and opposition to non-democratic regimes around the world signals that its moment has come and gone. At first no-one “got it” and then it was adopted by people who spend a lot of time waiting in public while ignoring others — celebrity musicians and actors. In its final act, Twitter is home to everyone standing in line anywhere — airports, bus stops, grocery stores as well as social media mavens who are terminally bored at social media conferences. At some point, even The New York Times will stop writing the same story over and over again. And then, quietly but surely, everyone else will just stop. Good night, Tweet prince, and flights of angels sing thee to thy rest.

Privacy as Competitive Advantage

Peter Hirsch — Mon, 23 May 2011 23:36:24 +0000

The Sony Playstation imbroglio and the stealth campaign attempted by Facebook on Google have once again pointed up the critical sensitivity towards the issue of privacy. The astonishing fact that Apple felt the need to respond to allegations about geo-location data it was collecting suggests an acute consciousness of the reputational toxicity of privacy. Or, perhaps, it is merely recognition of the fact that each of these competing eco-systems occupy very similar turf and privacy could be the wedge issue that pushes customers terminally towards one player and away from another.
There are many conspiracy theorists willing to explain in great detail all of the nefarious things that companies want to with the data they have, but we have always been adherents to the view that inertia explains more than malice. To us, it looks almost as if it’s the effort involved in getting rid of the data that is getting companies into trouble rather a secret master plan to exploit it.
So we’d like to make a modest proposal that there is at least a possibility that there’s a business to be made in being the wired company that cares enough to purge responsibly, with a patented and fully transparent data cleanse system ™. Certainly, the race to the top in data cleansing would lol a lot more edifying than the sheepish mumbling about enhanced data privacy settings that is today’s standard response to each succeeding data revelation.

First Stupid, now Evil

Peter Hirsch — Thu, 28 Apr 2011 12:40:05 +0000

We were happy to see the board of Berkshire Hathaway reverse itself in the matter of David Sokol’s disclosure about his acquisition of shares in Lubrizol because it neatly illustrates one of our core crisis management precepts. This is that in the fog of swirling facts, conjectures and opinions surrounding a crisis, it is often helpful for a company to ask itself — is our explanation going to be that we were stupid (mistakes were made) or evil (someone can be blamed)? This can then lead to an unemotional discussion of whether procedures need to be changed (no more mistakes) or whether someone can be fired (noisely or quietly) or a business unit closed or sold. What is compelling about the B-H decision is that its original explanation was a botched attempt at explanation #1 — everything was legally OK, but we probably would behave differently in the future. This flew completely in the face of our baseline of expectations about Warren Buffett as a man of impeccable rectitude with an aversion to obfuscation. The audit committee report outlines in excruciating detail a timeline and pattern of events that enables the firm to convincingly switch to explanation #2. We offer no opinion on whether this version of events is correct, but this looks like a good save, and probably a bit of luck. Most companies in crisis trying to make this switch simply make matters worse by destroying their credibility. Note to Renault: it is usually easier to go from stupid to evil than evil to stupid.

Malus Domestica

Peter Hirsch — Fri, 22 Apr 2011 15:37:57 +0000

Well, how fitting that we now know what kind of Apple Steve Jobs runs — Northern Spy. It makes very good pies, but does it make good public relations? We’re prompted to ask this question because once again Apple has stayed true to its practice of not commenting with regard to allegations about its retention of data about IPhone users’ locations. This is consistent with its previous posture re Steve Job’s state of health and questions about stock options. The almost universal admiration of the company (some might call it adulation) in spite of this habit occasionally causes corporate communications practitioners to ask — “opacity seems to work for Apple. Why shouldn’t I try it?” The answer is not as simple as it might seem. Some might say this posture has worked well for Apple, causing past critical storylines to wither for lack of the oxygen provided by a company response. However, it seems to us, that it requires a level of intestinal fortitude, the willingness to put up with high levels of negative speculation, that is realistically only available to a company like Apple. Steve Jobs is truly one of a kind and arguably even titans such as Jack Welch, Lou Gerstner and Bill Gates would have had trouble pulling off this consistent silence. The great Warren Buffett himself will be hard pressed to say nothing about the resignation of David Sokol at his upcoming annual meeting even though he is unlikely to go beyond what he has said previously. So the lesson here seems to be that, for most companies, consistent and reasonable transparency is the safest posture. Once again, we will have to leave pregnant silence to the man in the black turtleneck.

Men in Crisp Suits

Peter Hirsch — Fri, 01 Apr 2011 17:14:07 +0000

For many people, the day hasn’t really started until they’ve read The New York Times and this writer in particular owes most of his knowledge to reading the newspaper every day for 35 years. The paper’s coverage is so uniformly credible and balanced that its intimate readers instantly recognize when a reporter is reaching — anonymous quotes, unsourced opinions and in portraits of insufficiently villainous bad guys, cruelty to animals, anecdotes about high school arrogance and references to unrelated lawsuits, long dismissed. This past Sunday’s paper carries variant number two of this technique used when it is deemed appropriate to paint a corporation in a poor light without any evidence for bad behavior. In Walmart Tries a Refined Path into New York, reporter Elizabeth Harris delivers a gem of this particular genre. The way to recognize this particular type of story is that there is always a reference to the PR people, inevitably wearing crisp suits. Then there’s the obligatory Dr. Evil analogy (Walmart henchmen ”furiously” tap Blackberry messages to company exec watching remotely). We are also treated in these stories to power words that add little information – “all out push,” “overwhelm,” “out manoeuver,” “aggressive” (and “aggressiveness”). Note the sheepish dissonance between the headline descriptor (refined) and what the reporter appears to want to characterize as a brute force campaign to (OMG) influence public opinion in open forums. The reporter is keeping all options open here, accusing the company of simultaneously saying too little (“would not speak to a reporter for this article”) and too much (“the e-mails kept popping up for nearly four hours”). What exactly does one need to add to a campaign (“aggressive media strategy”) conducted so stridently in the open?

This is not to argue for a moment the merits of the issue. For all we know Walmart does destroy small businesses and replace good jobs with bad ones. We’d just like to “out” these veiled editorials, although we have little expectation that even “in your face aggressiveness” will cure the Times of this occasional vice. In the mean time, we have a few recommendations for the good people of Walmart — ditch the “emblazoned” (Scarlet Letter) folders and hand out information on coffee stained napkins. And we have two more words for the PR people: cargo pants.