Tuesday, July 31, 2012

A Potential PR Disaster 

Here is a PR disaster in the making for medical device companies.  It turns out that equipment makers have done little or nothing to secure the software used in their machines.  This means any astute hacker can intercept and change the data or put a virus into a machine that causes it to malfunction.  So far, it appears that equipment manufacturers haven't taken the threat seriously because there have been few instances of failure, if any. No matter.  The first time it happens -- and it will happen -- the charge will be that manufacturers should have known.  There is no excuse because hackers are telling them now to shield their machines against the inevitable hour when someone tries to injure or invade the privacy of another.  One hopes the PR departments of these firms are sending stories to their CEOs and warnings.

Monday, July 30, 2012

A Fundamental Failure 

For a country to join the front rank of world societies, it needs infrastructure -- roads, sewers, power, water, housing.  India has lagged in these areas, and the power failure across the  the northern part of the country is a reminder of how far it has to go.  A government's fundamental civic duty is to provide the services that allow people to carry on with their lives.  It is a core duty of governmental relations.  India has struggled with basics.  The country is a welter of conflicting interests that never seem to gel around central issues.  The country is building housing but millions are living in shacks.  The country provides power but it blinks on and off without warning.  It is building roads but it has a long way to go to reach all parts of the nation.  One expects fits and starts as a country emerges from a Third World status, but India is compared to China and found wanting.  The needs are massive in India but news stories appear to conclude that the government isn't up to the task.  What will it take to turn the corner?

Friday, July 27, 2012

When A Creator Disavows His Work 

What is the PR impact of a creator disavowing the thing he made?  This question arose from Sandy Weill's statement that big banks should be broken up.  Weill was the architect of the largest financial supermarket ever assembled.  He was a deal maker and operational genius.  When he left Citigroup, it slumped and hasn't recovered since.  Now Weill is calling for investment banking to be split off from deposit-taking institutions.  It may well be a staggering blow to banking executives defending the status quo.  His new opinion certainly makes communications more difficult.  One might try to dispatch him as an old man who is no longer in touch with the financial world.  That only goes so far, especially since banks are still recovering from the financial meltdown.  The real question is why Weill didn't speak sooner.

Thursday, July 26, 2012

When The CEO Steps In It 

Usually CEOs are cautious about what they say because they know the impact of their words -- but not always.  Here is a case in which a CEO made himself look dumb and he should have known better.  One doesn't speak for another company, especially if one hasn't consulted with that company first.  Why do CEOs do stupid things?  They are human.  However, the long rise to the top should have taught them something, and it is surprising when people learn that it hasn't.  A CEO can't risk too many errors like this without losing credibility among investors and employees.  There isn't much a PR department can do to rectify the gaffe.  One can say the CEO didn't really mean it.  He was using HBO as an example, but that doesn't carry one far.  Maybe the next time the CEO will talk to PR counsel first.

Wednesday, July 25, 2012


There is a truism about consumer electronics.  Inevitably, the company on top with the strongest brand positioning will fall.  It might not be today, tomorrow or next year, but it will happen.  Innovation is relentless and sooner or later, a company will miss the next wave.  Apple has been on top for some time, but it too is facing at least momentary difficulties  That is a danger for a firm that was led by a cultish leader who could sense where the market should go.  Apple's new CEO is competent, maybe brilliant, but he is not Steve Jobs, and Apple fans know it.  Apple's brand positioning was Jobs, and now it is faced with carrying on.  From a PR perspective, the company is in a delicate period on a thin high wire.  Any sign of weakness and competitors will take advantage.  Maybe Apple's next iPhone will re-establish its leadership, but watch out if it doesn't.

Tuesday, July 24, 2012

Hitting 'Em Where It Hurts 

The $60 million fine against Penn State is a statement as much as punishment.  People relate to monetary damages more than prohibitions from post-season games and voiding of victories.    The NCAA is saying loudly that what happened at the university was corruption at its worst, that winning at all costs is not what sports programs should be about and that it can clean house.  This is as important for the association as it is for college football.  There have been numerous charges that big money has turned college football into professional sports but for the fact that players aren't paid.  Alumni have distorted the programs as well.  The NCAA is showing that it can take charge when it needs to and that it wields a big club.  From a PR perspective, it was a good move.

Monday, July 23, 2012

Handling A Horror 

Warner Brothers acted swiftly and well in response to the Aurora Colorado massacre during the premier of The Dark Knight Rises.  It canceled grand openings in Europe.  It refused to report official figures for the first weekend.  There is no way to blame the company for the action of one mad person, and there is almost no way the horror could have been prevented.  This is a crisis without precedent.  Of all the crisis communications scenarios one might write, the idea that someone would enter a theater and gun down patrons would not be the first or even 50th possibility.  It is a lesson to communicators to remain flexible and proactive.  The first tweets, news stories and phone calls out of Aurora must have been greeted with near panic among the executives of Warner Brothers.  To remain calm in a situation like this is more than most humans can bear.  Their reaction was fast to their credit.  Now they have to figure out what to do next.  That may be harder.

Friday, July 20, 2012

What Is Business' Responsibility? 

This essay raises the question of business and society and points out that business does not have a direct responsibility for the welfare of a society in which it works.  A business is beholden to customers and stakeholders.  If society's needs happen to intersect with a business' purpose, all the better.  If it doesn't, companies will go elsewhere to find suitable environments in which to work.  The essay is critical of corporations that have a role in US politics but fail to take responsibility for educating and hiring US workers.   What it doesn't say is that much of the hiring corporations have done overseas has been low-cost labor.  Apple products are assembled in huge factories by people who are paid a fraction of American wages.  With assembly work comes a need for engineering that has driven movement of more sophisticated work from the US as well.  From a PR perspective, what should be done, if anything?  The answer is not much.  Americans couldn't afford an iPad assembled in the US.  That is, as consumers, we benefit from low-wage labor.  We demand it actually because we want to maintain our standard of living.  Perhaps the first step in resolving the issue is to look at ourselves.

Thursday, July 19, 2012

Caught Between Assumptions 

Ever since a national post office started in the time of Benjamin Franklin, there have been two assumptions about it.  It's a business.  It's an essential service even if it loses money.  Now the clashing views are coming to a head with the post office facing default by the beginning of next month.  Unlike Franklin's time, there is less need for a national postal service, and that is the problem facing the institution.  First class mail has plunged.   The postal service now is a captive of junk mailers and news publishers, and even some of them are leaving.  Republicans in Congress want the post office to run like a business.  That would require large layoffs, closing of scores of facilities and a pullback from rural delivery.  Small towns and congressmen who represent them want service to continue even at a loss.  Someone has to give in eventually or the post office will become a skeleton.  But, then, that is what some might be wishing for.

Wednesday, July 18, 2012

Rudeness As A Communications Tactic 

For those who don't live in or near New Jersey, the state's governor has a political style of in-your-face rudeness.  He is not above calling reporters "idiots" and telling them to shut up.  He verbally assaults private citizens as well -- in public.  And, it seems to be working for him.  Citizens of the state call him a leader rather than a bully.  That may be so, but he is a leader with a loud mouth and a short temper.  From a PR perspective, one can only stand back and observe the fellow in amazement.  How does he get away with it and maintain his popularity?  One answer is that he has driven reforms through the legislature, and he is trying to cut New Jersey's tax burden, famously heavy.  Or, to put it another way, people will put up with a lot in order to get action.  The governor is depending on that to keep him in office.  However, let credible opposition rise against him and his rudeness will become a deficit quickly.

Tuesday, July 17, 2012

Living In Denial 

As PR practitioners we trust people.  After all, employees and consumers keep organizations in existence.  But what does an organization do when people are living in denial and refuse to see a danger confronting them?  This appears to be the case here.  The city of San Bernardino had plenty of warning that it could not keep spending the way it had been.  But, it did.  Now it is bankrupt.  Citizens will suffer as the city realigns expenditures, and they will blame leadership.  What should city executives have done?  The answer might be no more than what the city manager did.  He warned.  He spoke out.  He tried to cut back on spending.  Nothing worked.  Perhaps he should have done the one act he has now taken -- resigned before city finances caved.  Public relations and communications cannot solve everything.  There must be a willing message-receiver who listens.  San Bernardino lacked that, but the city is not alone.  There are many organizations stuck in their ways and resistant to change.  All one can do is try while knowing that failure is an option.

Monday, July 16, 2012

When Publicity Backfires 

Here are two cases of publicity that backfired.  Both deal with the cost of "green" jet fuel for military aircraft.   Although the demonstrations in the Navy and Air Force were tests of the viability of alternative fuel, the cost of $26 per gallon and $59 a gallon respectively set teeth on edge in Congress.  Regular jet fuel is $3.60 a gallon.  The military services were acting responsibly in conducting the tests but wildly overpriced fuel mocked the point they were making -- that military forces can use fuels from environmentally acceptable sources.   "Green" jet fuel is still impractical, even if the cost drops significantly.  But, on the other hand, that might be the point the Pentagon was making while fulfilling the President's directive.  If so, it succeeded.

Friday, July 13, 2012

Smart PR Or A Gaffe? 

Is it smart PR to call the President of the United States a liar, or is it a gaffe even though the charge is true?  Mitt Romney has released an ad that accuses the President of lying about him and about Hillary Clinton when she ran for the nomination four years ago.   Romney has third-party support  -- the Washington Post and Hillary's own testimony.  But, is it smart to do that?  Tough question.  Those who like the President will be offended.  Those who don't will have added evidence for their distaste.  It is the large undecided middle that will judge whether the ad and contention have merit or not.  There is no room to temper claims.  The ad forces a binary choice -- either he is or he isn't a prevaricator.  On the other hand, there is a feeling of disgust about down-and-dirty campaigning -- from both sides.  It isn't new, of course.  Dirty campaigns have been the practice since the beginning of the country and our forefathers engaged in them.  Why?  Because they work at least to some extent and every vote counts.  Political spinmeisters are cynical pragmatists with strong stomachs.  It is hard to justify their existence.

Thursday, July 12, 2012

An Explanation, Please... 

When is the public owed an explanation for a leader's absence?  Here is what appears to be a clear-cut case.  Congressman Jesse Jackson Jr suddenly disappeared weeks ago and is reported to be under medical treatment.  His office and his people are silent about what the problem(s) might be.  The citizens in his district at least should know whether he is well enough to continue service or whether he should consider stepping down.  This is similar to the silence that surrounded Steve Jobs in his last months at Apple.  Jobs and the board failed to let shareholders know his true condition.  On the other hand, Jobs appointed a successor and ensured continuance of the company.  Jackson's seat is in a never-never land.  No one knows what to do and even his fellow congressmen are asking for him to clarify his situation.  From a PR perspective, Jackson's silence is a mistake and the longer he remains quiet, the worse it will be for him.

Wednesday, July 11, 2012

Chilling, If True 

This essay reports the results of a survey of financial executives.  Twenty-four percent of them said rule-breaking was an essential part of being successful.  That included illegal and unethical conduct such as insider trading.  If this is a true reflection of the industry, CEOs of financial firms should be concerned.  They know already the perils of being caught, the enormous fines and harm to the reputations of individuals and organizations.  How is it that financial executives could be so short-sighted?  It seems that winning day-to-day is more important to them than success in the long run.  Unfortunately for them, they will be judged by their actions and more will go to prison.  From a PR perspective, such conduct is dumb, and corporations should get rid of these people sooner rather than later.  It is difficult enough to work in financial markets with intensified regulation.  One doesn't need to battle regulators at the same time.

Tuesday, July 10, 2012

Interesting Tools And Learning Games 

The 2012 election has spawned interesting voter tools and learning games that show how news publishers  are adapting to the internet.  Here is a list worth reviewing.  These applications are more than publicity for the media.  They are good public relations as well.  The news media have forged new paths in the production and dissemination of information.  They have developed practical tools that anyone can use to become better informed citizens and voters.  Look for more of this in years to come.  From a practitioner's perspective, one should ask how applications like this might be used in the corporate and nonprofit world.  It shouldn't take too much of a stretch to adapt them.

Monday, July 09, 2012

The Rise Of Indentured Students 

Indentured servitude hasn't been a factor in American history since the early 1700's.  But, with the explosion of student loan debts and an inability to pay them off, it looks as if it has appeared again.  This time, however, the master is not a landowner but a financial institution.  The difference between then and now is that indentured students have a right to vote -- and they will.  They will support any candidate who promises to work on their behalf in order to restructure, reduce or get rid of burdensome loans.  The perception is that America has created a class of life-long debtors, a society in which one works for the company store and never gets ahead.  This used to be the case in the coal fields of West Virginia and was the genesis of the song "Sixteen Tons."  The societal challenge of excessive debt is an issue that will affect communications for years to come.  How do we talk to citizens who are strapped and falling from the middle class to poverty.  What do we say?  It is wrong to tell them it is their own fault for taking on large loans, especially after society encouraged them to do it.  It also is an error to keep holding out the rewards of a college education when the payoff is demonstrably false.

Friday, July 06, 2012

How To Kill A Budding Business 

Here is one way to tick off customers, create bad PR and kill your budding business -- offer a news service with fake bylines.  A Chicago start-up, called Journatic, supplies newspapers with hyperlocal reporting but to disguise how it does it, the service created mythical names as authors of its stories.  Newspapers are not happy.  Journatic lost customers, and the explanation of the founder strained credibility.  He says he has stopped the practice, but the damage is done.  Although some commentators think Journatic will survive, because there is no other way for large newspapers to cover local news, the founder has a steep mountain to climb to regain credibility.  One would think an ex-journalist would understand the relationship one needs to keep with a newspaper publisher.  Apparently not.  Add this story to examples of how not to do it.

Thursday, July 05, 2012

Spreading The Blame 

The ex-CEO of Barclays is not quite like the chairman who stepped down on Monday with a statement taking full responsibility for the interest rate fixing scandal.  The ex-CEO apparently spent a good bit of time yesterday before a British parliamentary committee spreading the blame for the failure to traders, to regulators and to anyone else but himself.  It is not the image of leadership that one desires, but, on the other hand, he is no longer the CEO of the bank.  He might be ducking and weaving with an eye on shareholder lawsuits that will come inevitably.  Still, the picture of a once powerful individual running for cover is another blow to an already tattered reputation.  It lends to a perception that business people are craven, an unfortunate image that too many people are ready to accept.

Tuesday, July 03, 2012

How Would You Do PR For New York City? 

This is an revealing story.  Wall Street firms are moving back office jobs out of Manhattan to lower cost venues.  It has been happening for a long time but it might be accelerating.  Like it or not, the city's tax base depends on middle class jobs in the finance industry, the last great business of New York City.  It cannot live on wealthy hedge fund managers alone.  So, how would you convince Wall Street firms to keep jobs in New York?  There is no good reason in the internet age for such jobs to remain.  Erosion might be inevitable and a lost cause.  So, what would you do to attract new employment?   There is excitement that a technology corridor is growing in the city, but that will be hardly enough to replace thousands who are moved to Florida and elsewhere.  What is a city if it becomes hollowed out?  Ask Detroit.  

Monday, July 02, 2012

Reputations Lost 

The chairman of Barclays PLC is gone and the CEO may be next.  This is the result of an interest rate fixing scandal that has convulsed the leadership of the bank and cost Barclays $453 million in fines.  The chairman said accurately that the failure has dealt a "devastating blow" to the bank's reputation.  There is apparently no evidence that the chairman knew of the machinations but he stepped up and said "The buck stops with me."  That might be his attempt to save the CEO but it might not be enough. One can admire a leader who takes responsibility rather than pointing a finger elsewhere.  But, that will not save the reputation of the bank or of its senior officers.  Barclays has a long way to go to return to credibility.

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