Wednesday, April 30, 2014
Could It Be?
Could it be that Americans are falling out of love for hamburgers and fries?That McDonald's and Burger King are fighting for a diminishing share? Stranger things have happened. If America's taste buds are changing after decades of a holding pattern, what are the two fast-food companies to do? They will try to follow trends, as they did with the introduction of low calorie and low fat salads. That means, however, that they have a PR challenge facing them to convince consumers that they are still destinations of choice rather than competing chains' radically different sandwich menus. If the shift is minor, they should succeed. If Americans swear off traditional fast foods, they could be facing a fight for their existence. It will depend on how the chains adapt their embedded infrastructure in restaurants at the same time they are convincing consumers still to drop in. It could be a long haul for both companies, especially since the growth of the national movement to fight obesity. Other restaurant chains have disappeared over the years. There is no guarantee.
Tuesday, April 29, 2014
Embarrassing
What could be more embarrassing than a major bank publicly admitting that it erred in its math? This is the situation in which Bank of America finds itself for miscalculating its capital adequacy. As a result, it has had to suspend both its dividend and stock buyback program. The travesty feeds critics who say that major banks are too large to manage and should be broken up. It angers shareholders who thought they would be seeing a return. It spooks customers who wonder whether the bank is safe with their money. The question Bank of America's CEO should be asking is how did it come to this? Who goofed and what now? How does one communicate to shareholders that nothing is coming in the mail? Look for an obstreperous annual meeting and a CEO who will be verbally assaulted, even if he tries to explain the error. There are mistakes that a bank shouldn't make and this is one. It is a self-inflicted PR mugging.
Monday, April 28, 2014
Poor PR
One would think that given public awareness of hacking and incidents that plagued retailers earlier this year, companies would be ready to react. Apparently not. It seems that only a few companies were ready to communicate with customers when the Heartbleed virus appeared suddenly and forcefully. It is embarrassing and an example of poor PR. It is long past time for organizations to have a crisis communications plan in place for computer bugs. Maybe this time they will learn, but don't bet on it. There still seems to a belief that it "can't happen to me" until it does. Then, the company closes the barn door at a cost to its bottom line and reputation. There is a refrain from a folk song of decades ago, Oh when will they ever learn.
My thanks to Peter Shinbach for spotting this.
My thanks to Peter Shinbach for spotting this.
Friday, April 25, 2014
Gaming The System
There ought to be public shaming of executives who game the system to look better. Consider this example. Extensible Business Reporting Language (XBRL) was developed to help investors better compare companies. It is a step toward greater transparency. But executives have found ways around it so they can't be measured against peers. There isn't much of an excuse for this. It's bad investor relations, and it is obvious to anyone who looks at what the companies are doing. Rather then force compliance to XBRL, the move now is to get rid of it for small companies who find it a burden to tag their numbers in the 10-K. Executives can talk all they want about their concern for investors and consumers but when something as basic as this becomes a way to obfuscate performance, their actions speak louder than words.
Thursday, April 24, 2014
Strength In Numbers
When does it make sense to give away proprietary technology? When it risks being eclipsed and failing as a product. That is the decision IBM has made for its Power microprocessors. It has turned the chip into open architecture to get more people to use it. Now, IBM will need to build relations with collaborators who adopt the chip design. The OpenPower Foundation already has two dozen members. Public relations among manufacturers is often fractious because each lets self-interest control decisions. It takes a far-sighted CEO to understand that cooperation is better in the long run. IBM is clearly hoping that its collaborators are willing to work with it, but the company should not be surprised if foundation members are demanding and attempting to modify the Power chip to make it once again proprietary to their designs.
Wednesday, April 23, 2014
How Do You Handle This?
Airbnb, the apartment sharing startup, has a problem with prostitution. It seems Ladies of the Night are using its services for tricks. The service doesn't seem worried about it, but one wonders if it should be. What if people stop renting out apartments and rooms because they are afraid of the type of person who might take up residence? Airbnb's source of revenue will dry and its growth wither. It seems the company needs to do a better job of screening, but there will always be some who slip through. The questions are how many and how dangerous they might be to apartment owners and room renters. Airbnb might need to do more than it has already done.
In the case of one Airbnb apartment used for prostitution, the startup took immediate action to ensure the apartment owner had a safe place to stay, reimbursed her for property damage, and kicked the Airbnb guest off the service for good. "Like other leaders in global hospitality, we are constantly evaluating security measures and working on even more tools to give our users even more ways to build trust," a spokesperson told Fortune.
Airbnb must provide hosts with a sense of confidence that strangers won't abuse them or their property -- a headache for the hotel industry. Hoteliers have security guards and 24-hour desk service. The sharing service has a $1,000,000 guarantee for hosts, a way for them to correspond with guests and check their backgrounds before they arrive and the option to decline any guest. But, is it enough?
In the case of one Airbnb apartment used for prostitution, the startup took immediate action to ensure the apartment owner had a safe place to stay, reimbursed her for property damage, and kicked the Airbnb guest off the service for good. "Like other leaders in global hospitality, we are constantly evaluating security measures and working on even more tools to give our users even more ways to build trust," a spokesperson told Fortune.
Airbnb must provide hosts with a sense of confidence that strangers won't abuse them or their property -- a headache for the hotel industry. Hoteliers have security guards and 24-hour desk service. The sharing service has a $1,000,000 guarantee for hosts, a way for them to correspond with guests and check their backgrounds before they arrive and the option to decline any guest. But, is it enough?
Tuesday, April 22, 2014
General Mills Gets It
Unlike Porsche Cars, whose error we discussed yesterday, General Mills understands how to react quickly to what internet users say. The company had published a new policy last week that stated if someone "Liked" any of its brands online, that person agreed to give up the right to sue the company in favor of binding arbitration. The uproar was immediate, and General Mills quickly went back to its old policy with an explanation that it had been misunderstood. The company understands that brand power resides with the consumer and not with the corporation. Reputation is how the public regards you and not what you say. How might have General Mills introduced a new policy? By asking the public what it thinks. It is a slower procedure but a more certain one. If there are objections, the company can defend its change on the opinion of the majority. This is nothing more than a recognition of what always has been true. A company exists because of a customer and not vice versa.
Monday, April 21, 2014
Shocking
This story is shocking because Porsche, the luxury sports car maker, has been so good in customer service and public relations. Porsche is a master of building and fitting its vehicles to the aspirations of a select group of owner-drivers. The rest of the world gapes in awe at the machines built for comfort and speed. Now, with one million views of a series of videos castigating the company, Porsche has a PR headache. How could the company have slipped so badly? It might be that Porsche has yet to understand the power of social media and its effect upon brands. If so, the company has a case study for what not to do -- its own. One would like to believe that Porsche has learned from this affair, and it won't happen again. Time will tell.
Friday, April 18, 2014
Alone
Scientists have discovered a planet similar to earth and in the right zone for habitation. It is 500 light years away. Or, to put it in context, if earth had sent a message to the planet during the time of Henry VIII of England, it would just be arriving. For all practical purposes, man is alone in the universe, and earth is the only sustenance. This, more than any other reason, should be the driving force for maintaining the environment and creating harmony among nations. The argument that there is nowhere else to go is powerful persuasion. Yes, it is interesting to get lost in science fiction, but the facts of our existence intrude the more we know about space and its vast emptiness. One can't fight physics and win. It might seem irrelevant to invoke the isolation of humanity as a reason for peace, but the sooner that nations realize there is no place else to go, the faster they will overlook their grudges. Scientists have discussed colonizing the moon and Mars but there is little chance that self-sustaining populations can arise in either of the dead environments. We are alone. Understand what that means.
Thursday, April 17, 2014
PR Today
Isn't the PR that you learned in school or practiced for much of your career. Now it is data-driven communications. The traditional model of earned media that couldn't be measured is being swiftly replaced by social media that can be counted and tracked. Agencies that do not have access to the data are being left behind and might shrink to a niche of the industry. There will be room for smaller clients and B-to-B where there is less data, but the large consumer packaged goods, electronics and transportation accounts will gravitate to where they can get answers to their ROI questions. In other words, the legacy challenge of the PR business -- that measurement was difficult -- has largely been solved. Practitioners need to adapt or be left behind.
Wednesday, April 16, 2014
Caught
The IRS has proposed an experiment in which millions of Americans can submit simple, pre-filled tax returns. One would hope the IRS finds the test positive and saves filers an annual headache. But, one company sees it as a threat to its business and is lobbying against it -- Intuit, the maker of TurboTax. Rather than opposing it in the open, it has been using lobbying shills who are doing its work for it without attribution. They have sparked a faux grassroots campaign to protest the IRS action. Apparently Intuit doesn't want to be seen as against a program that might benefit Americans, but it does want to kill it. There is a cliche that describes this -- trying to be half-pregnant. If one is opposed, it is better to say so publicly and make the argument even if the rationale is self-serving. Sneaking around is bound to be outed, as it was in this case. Not only does Intuit come off as self-interested, which it has a right to be, but it seems craven. The campaign has backfired on the company, as it should have. Maybe now, it will present its case to the public transparently.
Tuesday, April 15, 2014
Live By The Fad. Die By The Fad.
A failing cupcake chain is trying to get its products into supermarkets. Cupcakes were a fad not that long ago, and there were cupcake wars on reality TV cooking shows. Now, pffft. The chain went public at the height of the fad and today is closing stores. It is hard enough to run a business. Hopping on a flash trend and trying to ride it is worse. One must be ready to cut and run instantly when consumers turn their attention elsewhere. The problem with fads is recognizing they are just that. There are no guidelines to tell one that 14 to 24 months hence, consumers will be on to something new. It is easy to do publicity while a fad rages. It is nearly impossible once it passes. It's yesterday's news like pet rocks, wall crawlers and other gizmos that have come and gone. PR practitioners would do well to avoid momentary trends, but they don't always have a choice. However, they should be wary enough to treat fads for what they are -- momentary crowd behavior -- and not enduring changes in culture.
Monday, April 14, 2014
Groundbreaking Protest
Opposition to the Keystone XL pipeline has taken to the ground to send a message. It is part of publicity that a coalition has launched to persuade the President to reject the pipeline's northern route to Canada. Pressure on the President has increased over the last five years, but he keeps putting off the decision. It's a no-win for him. Either he sides with environmentalists and rejects the pipeline -- thereby losing the union vote -- or he sides with the pipeline and jobs and loses the environmentalist vote. No wonder he has shoved off the decision year after year. The problem with delay is that it has not decreased opposition but exactly the opposite. If and when, Obama makes his decision, there will be an uproar from some part of his supporters. However, why should he care? He is a lame duck. There is no good way to handle a case like this. It would seem that a speedy decision is better than none, but that isn't always true. Sometimes delay allows a center to form on which one can build compromise, but there doesn't appear to be a center for the Keystone pipeline.
Friday, April 11, 2014
Punishing Persuasion
A Federal court has ruled that the Federal Trade Commission can sue companies that have had data breaches. It is past time for such punishing persuasion. Data theft is a daily occurrence now that puts consumers at peril. Many companies have accepted it as the cost of doing business. But, it isn't. It is poor public relations. Yes, data security is expensive and never-ending because thieves are creative, but that doesn't excuse one from working to prevent incursion. High-profile incidents since late last year have demonstrated that particularly retail companies have not done enough to protect customers. There is no excuse now and fines in addition. The FTC is going to be busy for a while until the last of the security holdouts fall in line.
Thursday, April 10, 2014
It's Hardest On The Workers
Too often companies overlook workers when there is a product defect. The company takes the blame and by extension those who built the product. However, it is often not the workers' fault. They installed a defective part correctly and with pride. Only later do they find out that the part is bad. This is the morale-breaking situation that assembly line workers of GM's Lordstown Assembly Plant are facing. The new Chevrolet Cobalts that left their hands were built with quality and craft. Suddenly, all of them are suspect for a bad ignition switch that has caused loss of life. GM's CEO is under fire for what appears to be a cover-up at the engineering level of the company. The workers aren't at fault. They trusted management to design and build good parts for the car, and it didn't happen. As a result, GM has both an internal and external PR problem. It needs to regain the trust of its workforce at the same time it is battling with the government over the issue of a long-delayed recall. It won't help for the plant manager to tell the workforce they aren't to blame. Employees still feel bad and let down. This is a situation in which words mean little. Good parts are what is needed -- parts employees have confidence in putting into a new car.
Wednesday, April 09, 2014
Perception Vs. Reality
This is an interesting story of perception versus reality. It seems professional violinists can't tell the difference between a Stradivarius violin and a well-made modern one. Yet, the Strads cost millions more than a modern violin and artists compete to get them. One would think that the price of a Strad would plummet as a result, but it hasn't. Perception can overpower reality even with the most sophisticated of people. PR practitioners and marketers know well the power of perception. That is how we got the title of spinmeisters. But it is also a warning. Those who would play with the power of perception can be shown up by facts and lose in the end. The cost of a Strad is far above what most violinists can afford to pay -- in the tens of millions of dollars. That alone forces musicians to look for less expensive alternatives. Reality has a way of overpowering perception eventually.
Tuesday, April 08, 2014
Words Won't Stop Them
The Ukraine has passed the point of persuasion and plunged into force of arms. The only relations with the public now must be one of power, especially since Russia is fomenting agitation in its eastern cities. And from Russia's point of view, why not? Even if soldiers refrain from coming over the border, unrest compels Ukraine's leaders to accommodate with Putin. That is what Putin wants. In other words, Moscow is using guerilla warfare to get its way. There is little the West can do to stop Russia. It is impervious to words and negotiation. Ukraine could fall a piece at a time with ruble-paid mobs leading the way and Russia "stepping in" to protect its people. Evil but cunning.
Monday, April 07, 2014
Damn The Cost
It is not often that an event occurs in which no one looks at the ledger for how much it costs. That is apparently what is happening with the prolonged search for the missing Malaysia airplane. Countries are spending what it takes to find the craft, and no one seems to have a precise answer for the expense. It is an example of concern for humanity to shelve the checkbook while the search is underway, and it would be poor PR for a country to cease searching because it cost too much. No one wants to be in that position, so they search by air and by sea day after day. Now that pings have been heard from the depths, the searchers might be narrowing the hunt. If the plane is indeed found, the cost will mean nothing in the end.
Friday, April 04, 2014
Dumb
It is not often that a network makes a dumb mistake, but here is one -- adding engine noises to an electric car. I saw this piece when it aired and wondered why a Tesla made motor sounds. It didn't strike me that the editor had dubbed them in but many others caught the error. CBS and 60 Minutes both looked dumb. One wonders what Tesla's engineers thought as well as the person featured in the TV news magazine -- Elon Musk. Musk has spent hundreds of millions to bring an all-electric car to market and in a laudatory piece where the car is featured, the editor got it wrong. This is a reminder that even the most professional of journalists can make stupid mistakes. PR practitioners cannot afford to assume that reporters and editors understand even simple issues. It is always better to check even when one isn't in doubt about the media's understanding.
Thursday, April 03, 2014
Deja Vu
The Supreme Court has struck down restrictions on total dollar amounts donors can give to political campaigns. Progressives are howling. Their complaint is that big money interests will buy elections from now on. Apparently they forgot history. The flow of cash to campaigns historically was uncontrolled and the country functioned well. If you have trouble believing that statement, consult the Caro biography of Lyndon Johnson. That was when cash gushed from Texas oil interests and few knew about it. Before Johnson, there was Mark Hanna of Ohio. Before them, others. Campaign cash has sloshed through the system since the beginning of the country, and yet, the United States have not foundered but once when the North and South went to war. That had nothing to do with how much one spent on getting elected. The playing field has never been level and never will be, but just because one candidate has a louder voice than another does not guarantee that noise will make the difference. As PR practitioners skilled in the art and craft of persuasion, we know how difficult it is. We should give the public more credit and realize that as imperfect as voters are, they do come to their own decisions for reasons that might have nothing to do with campaign messages. In other words, money alone is not a guarantee of political success. Kudos to the Supreme Court for recognizing that and for upholding Free Speech.
Wednesday, April 02, 2014
Culture Change
Not long ago, a Roman Catholic Bishop with red satin cincture, staff, mitre and the power of position could justify a mansion in which to live. No longer. Now a bishop apologizes to the laity for planning a multimillion dollar home. This is the result of a culture change in the Roman Catholic Church brought on by a pope who has dedicated himself and his life to the poor. There was nothing wrong with the trappings of power other than it helped one forget what he should be doing. PR practitioners should study what has happened in the span of a year through the image of a pope kissing the feet of prisoners and embracing the ill. One wonders what corporations would be like if CEOs were as self-effacing. Not that CEOs should give up the perks of power. Some of them, including the corporate airplane, are efficiency tools that help CEOs, already spread thin, stretch their time to even greater good. The point is not the trappings but whether one feels entitled to them and considers himself above the rest of mankind. Now, mansions are out for Roman Catholic bishops. Will it improve their image to live more humbly? Time will tell, but they need no longer justify where they live.
Tuesday, April 01, 2014
Stepping Into It
Can a comedian make a racially insensitive joke and get away with it online? Apparently not. Stephen Colbert is the focus of a Twitter campaign to cancel his TV satire show for offending Asian Americans. Colbert has fired back and made a joke of the joke. A satirist can sometimes do that. Anyone else would be the target of the "PC police." It is nearly impossible for anyone working in public relations to engage in satire. That's because we are conditioned to take individuals and companies at face value. Today is April 1, the traditional time for practical jokes and pranks. It is interesting that those who launch one are often believed, even when what they say or do is outrageous. Satire is best left to comedians, but even they can get into trouble.
