Archive for the ‘Reputation’ Category

Data Exhaust

May 21, 2012

The initial public offering of Facebook last week has prompted discussion of how the company will  justify its behemoth stock market valuation over the long term.  In a canny, but apparently unrelated move, GM announced that it no longer considered the cost of advertising on Facebook justifiable.  The piquancy of this announcement was muted somewhat when the auto manufacturer also disclosed that it would not be advertising on the 20123 Superbowl but the question nonetheless remains: why would hundreds of millions of people voluntarily surrender their right of ownership in their own data production to Mark Zuckerberg?  Daily, exabytes of so-called data exhaust stream out of the tailpipe of human interaction to be sold to advertisers in a bizarre form of metaphysical carbon capture.  Is it conceivable that individuals will some day be able to extract  a fee from Facebook for the right to monetize their emotional waste?  Or will we see the establishment of a Facebook-type utility in which users agree to mutually pool their data exhaust and sell it directly to advertisers, effectively dis-intermediating MZ?  Arguably, managing their data exhaust is something people are willing to job out to Facebook for now, but it  might take only a few highly visible data outrages for them to change their minds.  Facebook and its advertisers will need to be more vigilant than they have been so far to ensure that this data exhaust doesn’t create a smog of privacy violations that people refuse to tolerate.  Perhaps, even today, someone somewhere is writing the data equivalent of “Silent Spring.”

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The Best of Times, The Wurst of Times

March 2, 2012

Poor Otto.  Bismarck’s timeless quip that “laws are like sausages, it is better not to see them being made” seems to have lost its bearings in current discourse.  Thus, Gerard Corbett, chairman of the Public Relations Society of America, discussing the search for a new definition of public relations in today’s New York Times — “it was basically an exercise in making sausage.”  Huh?  In any event, we can certainly celebrate this effort that resulted in the warm and only slightly moist sentence “Public relations is a strategic communications process that builds mutually beneficial relationships between organizations and their publics.”  Celebrate because, in the current first flush of social media’s youth, it has finally become obvious again that “PR” is about building and nourishing relationships not “communications consulting” or any of the other seventeen things it has been called since people started fretting that “public relations” was insufficiently dignified for such an august profession.  So, three cheers for the committee and may “a thousand flowers bloom.”  Well, actually, Mao Tse Tung’s campaign was the “Hundred Flowers Movement” but never mind.  Let’s get back to making sausage while the sun shines.

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.

Hack Hacks Shutter Rag

July 8, 2011

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.

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.

Men in Crisp Suits

April 1, 2011

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.

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?

Pawning the Family China

December 29, 2010

We’ve grown used to superlatives about the Chinese market, its billions of consumers, trillions in investments, the all-consuming maw of its energy needs.  Global companies have proved willing to do almost anything not to be left out of the competition to meet these needs, even when the costs and risks have been astonishingly high.  Now the Wall Street Journal reports on two massive deals in which GE agrees to combine its global avionics business with AVIC, the Chinese aviation company and GM expands its joint venture with SAIC, the Chinese automotive company, to sell its no frills Wuling mini-van throughout Southeast Asia.

We can leave to more competent analysts such issues as the intellectual property risk. There has already been pointed commentary on the joint venture that Kawasaki Heavy Industries and Siemens  created with a Chinese partner in high-speed railroads that has in short order produced a competitor for them all over the world.  What interests us is the increased reputation risk that GE, GM and other companies have taken on with these intense and intimate partnerships.

We make no allegations against any specific Chinese companies, but it is clear that a century or more of corporate reputation building by GE and GM is not matched by their fledgling (if giant) Chinese partners.  The ethical care and commitment to international standards across a broad swathe of business practices exemplified by companies such as these stand for respected corporate brands that have now been placed in the hands of their Chinese partners.  Having spent decades ensuring that their supply chains around the world are behaving in accordance with their own standards, these companies now arguably face reputation risk on an unprecedented scale.

In avionics henceforth, at least so it looks from the outside, GE is AVIC and AVIC is GE.  A manageable challenge, certainly, but  no-one should mistake the shift in the order of reputation risk magnitude that has taken place.

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.

Fuss About Microbes

December 14, 2010

Just when we were wondering how to make use of the information that a bacterium GFAJ-1 could substitute arsenic for phosphorus in many important molecules in its body, it turns out there’s a thundering dispute in the blogosphere about the validity of the study about the critter.  NASA’s response to critics of its study, as reported in today’s Science Times was to state that it “wouldn’t debate science with bloggers and would stick to peer-reviewed literature.”

This dispute and NASA’s response struck us as a perfect illustration of the now flawed distinction between bloggers and “real experts.”  It is a distinction we used to make too, arguing that responding to bloggers was like arguing with a drunk at a bar.  That condescending view has long since been blown away as serious political and academic discussion has shifted to the convenient high-speed debating chamber which is the World Wide Web.

At this stage in the cycle, the most expert and informed critics of your organization almost certainly have a blog presence and to ignore them because they are “bloggers” is simply leaving unanswered questions out in the open.  Are there still bomb-throwers among the bloggerati?  Yes, but you will know who they are and your fans will do much of the arguing for you.

To be fair, the authors of the paper themselves, according to the New York Times are putting together an FAQ which they plan eventually to post online.  As for peer review?  As one of the blogger critics, a zoologist from the University of British Columbia,  says: “We are the peers.”