Friday, October 31, 2008

The Power Of Online 

Note in this essay the power of the internet over manufacturers of electronic equipment. It wasn't that long ago manufacturers rarely paid attention to "Internet bitching." Today, most product and service providers maintain web monitoring, even when they are small. This has been a seismic change in customer relations and service. Customers have power over companies through their global ability to express dissatisfaction that results in loss of sales. Yet, it is still a minority of customers who complain. A company cannot tell from the level of complaints online whether it has a problem or a vocal minority pounding a drum. (Most of the time it is the latter.) Still, business dare not ignore even the smallest contingent because they know that most buyers look at the internet first as part of a purchase decision.

Online is useful for tracking what is right and wrong with a product or service, but it isn't as helpful in forecasting the kinds of products and services that should be built. For example, it is unlikely American auto manufacturers could have seen the massive shift away from SUV's from conversation on forums and web pages. It happened in weeks, but it takes years to build a new platform.

Thursday, October 30, 2008

Facts Vs. Spin 

I find this kind of article interesting. It matches the words of a candidate against the facts. Of course, candidates make things look glossier and easier to achieve than they are. But, voters tend to believe them, or rather, they form an impression of the person making the promises and place their trust in that person.

There is no chance given the deficit that either Obama or McCain can accomplish all they are promising to do. We know that, and they know that. However, we the voters choose not to look at the facts too closely. We hope the next president can deliver us from economic maladies. Our hope is bound to be disappointed, but a candidate plays the odds that voters will not lose their trust before recording a ballot.

Wednesday, October 29, 2008

Wrong Candidate, Wrong Time 

This article analyzing why McCain-Palin are getting such poor press coverage is interesting and instructive for communicators. One of the key points is that McCain did it to himself. He was a politician who was always available to reporters until the campaign was in full swing. Then he pulled back. Note that Obama has never been that open to media, but reporters aren't holding that against him. It is a matter of expectations. The media don't know Obama, and Obama is not letting them in. They thought they knew McCain but McCain changed and became a different person. The man who was a maverick proved to be conventional.

By most accounts, Obama has been disciplined about staying on message and making sure everyone in his campaign does the same. Not so for McCain. McCain has flailed and run from one message to the next to try and get something started. As a result, he looks and acts weak.

As written here before, campaigns start at the top, and McCain has proven time and again that he isn't a good campaigner. It makes no difference whether he is the better candidate for the presidency, he has been unable to persuade voters that he has solutions to the economic problems facing the country. Part of this comes from a decision to attack his opponent rather than issues at hand. This is an election in which proposals are more important than personalities. McCain is fighting the last election, not the current one.

Tuesday, October 28, 2008

At The Federal Trough 

This article points to a phenomenon that will not help companies in the future. Now that the Treasury has $700 billion to loan, more corporations want some of its funds -- auto manufacturers, insurers, banks. The prospect of diverse businesses running to the Federal trough while homeowners struggle with mortgage payments is making citizens cynical. And, it presents a public relations problem. That is, business supports free markets except when it doesn't.

There are good reasons for these companies to want into the loan program. The societal impact of their failure would be wide and deep. On the other hand, failure is part of free markets. Struggling citizens rightly ask if government is going to keep large businesses from falling, then why not me? This kind of thinking leads to ever-larger raids on government money. Where does it end?

Monday, October 27, 2008

To Hide Or Not 

The economy is so bad that companies are faced with a choice -- to hide from the media or to continue to work with them. The reflex reaction is to hide, even if a business continues to do better than expected in the downturn. "Better than expected" may mean missing guidance but making a profit. For many CEOs that is too much to bear. They see such periods as a time to hunker, to concentrate on keeping their businesses upright and waiting out the recession.

For some, the downturn is an opportunity. Their firms may not be affected as much, and a recession is a chance to demonstrate that their earnings remain relatively steady. For others, plummeting earnings requires an active defense of their firms and decisions.

It is hard in this recession to counsel CEOs. Part of the problem is that the media themselves are experiencing cuts with staffs being downsized and news holes rationalized. Not only is there bad news, but there is less space in which to report it, so why should a CEO remain out front? In that respect, this recession is unlike any downturn I've experienced. The months to come will be interesting.

Friday, October 24, 2008

Sparking a Rumor 

Here is a case in which lack of transparency sparks rumors. There was no need for it either. A statement from the company or the chairman would have resolved some of the doubt left in people's minds about why she stepped down. Failure to communicate happens often in management changes. Companies will resort to euphemisms to avoid giving the real reason why a chairman or CEO has departed. Of course, no one buys the explanation and speculation becomes "water-cooler" talk.

Wouldn't it be better just to say that X left because she had a disagreement with the board, or she is tired and wants to move on, or she has another opportunity she wishes to pursue? That, at least, provides a context for stakeholders.

Silence speaks louder than words.

Thursday, October 23, 2008

Good Business 

Good business is good PR. One wonders why Wal-Mart did not monitor its Chinese suppliers more closely in the past. In any event, the company is doing it now and because it is large, it can impose rules that smaller buyers cannot. This, more than anything else, will serve to clean up Chinese manufacturing. The Chinese government should be grateful Wal-Mart has acted. It is in the best interests of both the government and the company. Eventually, Chinese manufacturers will understand that the decision is in their best interests as well.

Wednesday, October 22, 2008

France and Newspapers 

This article is an eyeopener for me. I didn't know that France had a law guaranteeing distribution of newspapers nor did I know that distribution was tied up a by labor union and other considerations. The net result is dozens of newspapers that no one reads. They look good at the newstand but that is where they stay. PR must work differently in France as a result. Why use a medium that doesn't reach the intended audience? It is past time for a free market solution in the country.

Tuesday, October 21, 2008

Stiffing The Media 

This story is interesting because it points out a growing trend in political campaigns. That trend is avoiding the media assigned to report on the candidate. Sarah Palin needs reporters to establish her credentials, so she is talking to them. The other candidates are talking past them directly to voters. What this tells one is that candidates no longer consider the media the primary conduits to the electorate. There are many other ways to reach out and candidates are using them. The people in the back of the plane are along for the ride.

Monday, October 20, 2008

The Fear Index 

This is a good explanation of the VIX -- the volatility index that is also called "The Fear Index." Note that some call it a self-fulfilling prophecy. The more people focus on it, the more volatile it becomes. That is the definition of panic.

What will it take for markets to settle? A mass belief that the economy is going to be OK such that money sitting on the sidelines re-enters the markets. The breakdown in trust is so high at this point that no amount of jawboning will instill confidence. The White House is correct when it says it will take time for the economy to turn -- time the present administration doesn't have.

The next administration that is certain to be Democratic will have a hard job on its hands to turn around the incredulity of the business community. It won't have much time in which to do it either. If it fails, the US will be stuck in neutral and throwing money at the problem. If ever there was a time for an effective communications program that could help re-start economic activity, this is it.

Friday, October 17, 2008


It is a definition of arrogance when a late night talk show host can verbally attack a presidential candidate because the candidate cancelled on him. On the other hand, the candidate should have realized that the talk show host has a forum with millions of viewers that could be used against him. In that light, it was McCain's own fault for cancelling. He should have known the consequences for not showing up. If not, Letterman reminded him.

The Dangers of Anecdotes 

It is always nice to use a story to help persuade, but it is better if the facts of the story have been checked first. Here, they clearly were not. It is a reminder that the media will do follow-up if you don't.

Thursday, October 16, 2008

Loss Of Trust 

The stock markets are showing the loss of trust in the world financial system. There was momentary confidence, but once the euphoria passed, traders realized little had changed for the better. Hence, they started to sell again, even after hundreds of billions of dollars of liquidity were pumped into the system. Now the rationale is the recession and slow growth of business. It's anyone's guess when traders will again show confidence. There isn't a communication that can stabilize the system. Something else will have to generate a sense of promise that isn't there today.

Wednesday, October 15, 2008


This is a sure sign of a fatal breakdown in a communications campaign. The boo-birds are out while the campaign is running and providing unneeded advice. Now is the time when voters are making up their minds. McCain doesn't have the leisure of turning his efforts around.

There are many reasons for success and failure in campaigns but it starts at the top with the leader and type of organization the leader builds. It seems clear McCain's effort has been rudderless and without depth.

Here is one small indication of differences between the two candidates. We have had two Obama volunteers come to our door thus far but not a single campaign worker for McCain. No matter what one thinks of Obama as a candidate, he seems to have organized in depth while McCain has not. And if this is true, Obama deserves to win.

Tuesday, October 14, 2008

Character Assassination 

This story and this one too reveal an evil side of human nature on the web. It is viral character assassination -- rumors that get passed around at the speed of electrons and for which there are no antidotes. Because the rumors come from people one knows, they have credibility that spam doesn't have. And, because they are sent by e-mail, it is hard to detect them through online monitoring unless someone posts them in a forum or a friendly person is a recipient of a message.

Viral character assassination is not new. There have been other examples in the last 10 years. The danger is that it has become a standard practice with unfortunate outcomes, as is happening in Korea. There is no safety in telling people not to believe gossip. They are only too ready to accept bad news about celebrities and candidates. The best one can do is to fight rumors with facts as soon as one discovers them. But, even that is not enough in some circumstances.

Monday, October 13, 2008


Three weeks ago, Europe was lecturing the US about economic stability and tut-tutting about the Wall Street crisis. How things have changed. It turns out Europe is in as much trouble as the US. There is a lesson here for communicators. Know where you stand before presuming to comment on the plight of others. European finance ministers were thinking that the banking meltdown "can't happen here." It not only could. It did. They overlooked the global connections of finance. Now as they remove their feet from their mouths, they are trying to coordinate their own responses to a global banking crisis. It's not a pretty position to be in.

Friday, October 10, 2008


Today, brutality can't hide, as the Russians are learning. Even commercial satellites now have a resolution that was long reserved for the most advanced spy satellites. Look for activists to use imagery to their advantage

Complete Loss Of Confidence 

The markets are showing a complete loss of confidence . Whenever someone asks what a good reputation is worth, the answer should be "trillions." That is what has been lost so far.

Thursday, October 09, 2008


Voters are starting to make up their minds and McCain is watching his support slip away. With less than a month to go, it is doubtful he can win back those who are now in Obama's camp. From a PR perspective, what can a candidate do to get people listening to him again? It seems now like McCain is playing to the end of the game but aware he is too many points behind. Perhaps he isn't looking at the polls, but how does one continue to motivate campaign workers and supporters who do watch them? It requires extraordinary persuasion. Is McCain up to it? Should he pull off a win at this point, it will be a communications case study for years to come.

Wednesday, October 08, 2008

Reputation And Timing 

This fellow is trying to win his reputation back. Unfortunately, it is too early. The timing is wrong. Perhaps in three or four years, the public might take an objective look at how his company affected Wachovia. For now, the public believes he dragged the bank down, and there is little he can say or do to change minds.

The time element and reputation are too often overlooked. We believe with a good PR program we can protect reputation. Not always. There are companies and individuals who get caught in a maelstrom from which there is no extraction. Think about the current President. There are many who believe he is the worst President ever. That may be true, but we won't know for at least 20 years when from a distance we can assess him without emotion. By then, we will have experienced the results of his policies and will know how much he is to blame -- or not -- for the mess the country is in. Reputation has two time spans -- short and long-term. PR practitioners are paid to protect companies and individuals today.

Tuesday, October 07, 2008

Now They Tell Us 

This is a good explanation of the risks built into complex derivatives. One wishes that Wall Street had understood it before the market meltdown. Instead, we are suffering a worldwide crisis that will affect the economy for months to come.

What went wrong? Assumption piled on assumption with neglect for the uncertainty contained in each. The developers of derivatives failed to appreciate the underlying facts of the risks involved and that risks are cumulative. The meltdown was in the details.

It is in the details where communications plans fail as well. A PR practitioner cannot afford to gloss over niggling facts that jeopardize the larger message one wants to send. Cynical media will latch onto them and take the story into another direction. Accepting a company's story is the first step in telling it accurately. If there are warts, one notes them but also points to offsetting factors that put warts into perspective. Reporters appreciate self-awareness. Too many executives lack it or hide behind an overly optimistic message. As one CEO says, facts are friendly. Had Wall Street's mathematicians understood that, the risks they took would have been better hedged.

Monday, October 06, 2008

New Day 

With the passage and signing of the bailout (Pardon me. Rescue) bill, the US economy has entered a new day. I'm no economist nor a prognosticator of markets, but the lack of faith shown in the economy in the last three weeks was so great, it is hard to believe that the indexes will roar back. It takes time to rebuild confidence once it is lost. It sure seems to me that we are in a period of muddling when traders will stand back as financial concerns feel their way through. Call it a recession or what you will, but as a PR person, it is a lesson in credibility. When people stop believing, there is little one can do until time and activity rebuild it.

I'm no political pundit either, but this period would seem to favor Democrats far more than Republicans. John McCain already is concerned. He should be.

Friday, October 03, 2008

Out Of Touch 

Yesterday was long. From 8 am to 1 am this morning on the road. There was an odd feeling being out of touch while the market tanked and the vice presidential candidates tangled on TV. On the other hand, given the news lately, it wasn't that bad.

The job yesterday was media training. I had the part of a "black-hatted" inquisitor whose task was to make a president of a company squirm. To the president's credit, he did well and made few errors. I don't think I would have handled the questions thrown at him as well as he did. It is hard to keep one's cool under relentless badgering. There is an urge to tell the questioner to go some place hot for eternity. The president hung in and proved himself a good spokesperson for his firm.

Thursday, October 02, 2008

The Public Will Be Heard 

The $700 billion rescue plan (aka "bailout") has generated more e-mail than the House of Representatives can handle. Their server was overwhelmed. No wonder there was a revolt on the House floor.

While its possible that the gateway was hit with a Denial of Service attack, it is more likely that citizens are angry and they want to let someone know. From a PR perspective that is eyeopening. It should have told the Speaker of the House that a vote on the bill might be premature. Apparently, it didn't. Or, perhaps the Speaker doesn't understand yet that the internet has produced a more involved citizenry. That is something that the Democratic candidate for President understands well. He could give her a lesson.

Wednesday, October 01, 2008

Now They Are Listening 

Proponents look to make bailout palatable. However, the President and Congressional leaders may be too late.

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