Archive for the ‘Corporate Culture’ Category

Jackboots on the Forklifts

February 19, 2013

Let us spare a thought today for poor Amazon as it lurches forward from perhaps the most out-of-left-field crisis of the decade. According to The New York Times, the company has now severed its ties to the security firm it had hired to protect its warehouses in Germany who, it was disclosed, had, at the very least, a predilection for Neo Nazi outerwear. One could raise the question whether anyone at Amazon thought it odd that the security firm’s name in acronym spells out H.E.S.S., the name of Hitler’s deputy, but to us, this crisis is an object lesson in the futility of crisis “playbooks.” We award a golden pompom to anyone who could have predicted that such an event might befall Amazon which is precisely why lengthy crisis playbooks that purport to spell out what to do in any eventuality are relatively useless. By all means, have prepared language for the most likely problems but the best practitioners focus on the process more than the content. If you can get the right team on the line quickly and effectively you will have accomplished more than will be found in any playbook no matter how extensive.

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My Boss is a Sadistic Cockroach

December 6, 2011

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

September 26, 2011

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!

August 19, 2011

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.

First Stupid, now Evil

April 28, 2011

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

April 22, 2011

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.

Smoking Tweets

March 2, 2011

The Supreme Court’s ruling in the AT&T case ends for the moment the idea that corporations have any personal privacy protection of material provided to government agencies.  This has particular relevance in the burgeoning world of social media as practiced by companies, in which more and more internal and external traffic will not only be FOIA-ble but searchable.  In this environment, legal agreements in which companies pay fines without admitting to wrongdoing will provide little protection against out of context citation of awkward statements.  This is, of course, merely another reminder that the utmost care should be exercised in all forms of business communications, underlined by the ancient psychological truth that anything that can be misconstrued will be misconstrued.  We can understand why the U.S. Chamber of Commerce would  stand with AT&T on this.  Their statement cited in the Wall Street Journal that the ruling could have a chilling effect on corporations’ willingness to cooperate with law enforcement authorities somehow didn’t sound quite right, however.

Regardless of how the issue evolves, lawyers and communicators will now have to bid farewell to a tried and test cliché: “this statement has been taken out of context.”  How much context can there be in 140 characters?

Pass me the lexical Novocain

December 17, 2010

Politicians, bureaucrats, attorneys, generals and corporate spokespeople cherish the bland turn of phrase, the reassuring clichés that are the equivalent of the beat cop’s refrain: “move along, folks, nothing to see here.”  Indeed we would argue that there is a place for anodyne in reducing the heat when things have gone awry.  However, a cliché over-used becomes a caricature and focuses attention on itself in precisely the wrong way.  We’ll get in a moment to a recent example from Ohio State University that brings this subject to mind, but in the spirit of year-end resolutions, this is a plea for some new language in the corporate lexicon.

Some of the hoariest clichés have already been thoroughly disassembled and, to be fair, companies have largely abandoned the cloying warmth of sending fired executives to “explore new career opportunities” or “spend more time with their families.”  In these traumatic and litigious times, we have seen so many settlements that there are a couple of phrases which are now past their sell-by date.  Companies who settle with the government because they know or suspect that a full-blown trial could be even worse now need to stop saying the settlement is  designed to “eliminate the expense and distraction of protracted litigation.”  Surely, a shriveled fig leaf that covers less and less.  The opposite strategy, of course, is to “vigorously defend ourselves against these baseless allegations” which now means only that we are so guilty we’ll have to throw everything at this one to see if something sticks.

Which brings me to Ohio State, which has apparently been the victim of a security breach exposing 760,000 personal records to potential criminals.  As The New York Times reports today, the university is offering a year’s free credit protection to anyone whose name was on the affected server.  It is doing so, not because it believes anyone is at risk but “out of an abundance of caution.”  Not so they don’t get sued, mind you, but “out of an abundance of caution.”  It is as if corporate spokesmanship was a kind of kabuki theatre in which ritual gesture and phrasing has healing power.  How else can we explain that this odd, awkward, bumbling phrase elicits 1.41 million hits on Google?  What’s wrong with “just in case” or “to reassure people.”  We would argue that this and similar clichés have crossed over into caricature and now focus more not less attention on the problems under discussion.

We’re reminded of an analogous process from the history of Britain’s satirical magazine, Private Eye, which was routinely sued for libel in the 1970s by politicians and businessmen whom it alleged on little evidence were engaged in illicit affairs or observed drunk in public.  They cannily invented two clichés to signal this to its readers without getting sued.  Politicians were henceforth “seen discussing Ugandan affairs” when with their mistresses and “tired and emotional” when slurring their words.

So in this season of so many clichés, mostly good ones, let’s re-dedicate ourselves to inventing some new ones.  It is time to restore our lexical Novocain to its full strength.

The Market State

November 17, 2010

Last year, corporate executives spent a lot of time talking about the problem of headwinds in a difficult economy.  They never talk about tailwinds in a good economy but that’s another story.  What they have talked about this year is “uncertainty” by which they apparently mean excessive government regulation brought on by the global fiscal crisis. A McKinsey white paper published earlier this year suggests that companies would be better off preparing for much more activist national governments and the challenges they will present than whining about uncertainty.  The authors of the study suggest that the challenge for sovereign states in dealing with slower economic growth while still providing affordable safety nets will entangle the private and public sectors in the future in ways that are unthinkable in today’s developed economies.

While there are clearly financial and operational implications of this shift, there are also reputational dangers and opportunities.  If McKinsey’s predictions are correct, the term corporate social responsibility may take on entirely new meanings.  U.S. companies have long bemoaned the emergence in the 1950s of employer-supported health benefits.  If the market state is truly the wave of the future, they may have seen nothing yet.

Wanted: Social Capitalists

November 1, 2010

Social Network consultant Valdis Krebs plays along with Brian Lehrer on NPR today to create a “Six Degrees of Separation” game for Andrew Cuomo and Carl Paladino, each striving to win New York’s gubernatorial race.  It features the usual political figures, both foreground and background, lobbyists and campaign consultants.  This kind of social network analysis has been used in  numerous ways, such as mapping the relationships between senators, lobbyists and corporations with respect to health reform.

Digging a little into the social capital theories of Ron Burt at the University of Chicago we find useful measures of power relationships in social networks such as “betweenness” and “closeness.”  We also learn that most networks, left to their own devices, develop a high degree of homogeneity — more connections between more of the same kind of people.  Undiversified networks such as these offer none of the supposed benefits of social networks, such as innovation and cross-fertilization of ideas that come from unanticipated inputs.  In order to create these benefits, social networks need to be actively managed and nourished.

It strikes us that fostering these networks is one of  the critical contributions of the corporate communications function in the 21st century.  In an environment of intense flux and the disappearance of boundaries between industry sectors and functions, having a strategy to build your company’s social capital is no longer a luxury.  Wherever new threats emerge, we need fresh and diverse connections to understand and manage them.  New opportunities can only be seized when the diversity of our corporate networks alerts us to them.

The good news is that social media make the work of measuring your social capital and finding new potential connections easier than ever before.  The bad news is that building social capital is time and resource intensive.  Since some things don’t change, though, we will need new titles to describe our social network experts.  We think Senior Vice President for Social Capitalism has a nice ring to it.