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August 2015

What Brian should have said

130212-Williams-Brian-2010-teaseNot to pile on, but you'd think with five months to think about it, Brian Williams would have been better prepared for his inevitable apology tour. Based on his interview with Matt Lauer, it will probably be a one-stop event.

The New York Times was just one among a host of the un-impressed, noting the verbal gymnastics Williams used to avoid uttering the "L word" -- I lied.  Instead, he repeatedlty admitted, "I didn't tell the truth" as if his transgression was one of ommission, withholding facts rather than saying falsehoods.

I understand. For a journalist to admit he lied is second in seriousness only to plagiarism (another form of lying). But as my colleague and friend Mike Paul noted, "“There are no ifs or buts in a true apology.” What Williams attempted was a "non-apology apology.”

So should he admit he lied? Yes, but he should put it in context.

"Yes, I'm ashamed to admit it, but I lied. The helicopter story started with small exaggerations that grew larger in repeated telling until I reached the point that I actually believed what I was saying. So in that sense I wasn't trying to mislead people; I was trying to entertain them and, deep down, trying to make myself look more heroic. But what I said wasn't true.  It was a lie.

"If anything good can come of this, it's that I now understand myself better, I know I've lost the trust of many colleagues, I've embarrassed a news organization I love, as well as my family, and I've given the public another reason not to trust the media.  For all that, I'm deeply sorry and I sincerely appreciate the opportunity I've been given to regain the public's trust."

That, I think, would have been a real apology. And from all that I have read and seen, is much closer to the real truth. 



The Pope & Adam Smith

Pope2650Some are interpreting Pope Francis's encyclical on the environment as an attack on capitalism, prompting one presidential candidate to say he'll look elsewhere for economic advice. 

Senior public relations counselors can't be as dismissive of the pope's message, which goes to the very purpose of a corporation.

If one believes that a corporation's only purpose is to create wealth (value) for its shareowners, then its environmental impact is simply an "externality" that need only be addressed to the extent required by law and regulation. And it's perfectly free to do anything legal to shape those laws and regulations to its advantage. 

If on the other hand one believes a corporation's purpose is to create wealth (value) for everyone who contributes to its success and bears the cost of its failures, those "externalities" have moral significance. Corporations need first to ask themselves what they can do to minimize the environmental impact of their operations. And then they need to ask what they can do within their areas of competence to deal with the broader impacts on their stakeholders. 

Public relations counselors should recognize that a significant portion of the public are embracing the pope's message. That's not a call for more green-washing. But for a thoughtful discussion of the underlying question: what is the purpose of the corporation?

Adam Smith, the guy who essentially invented capitalism, was first a moral philosopher. He wouldn't have been so quick to suggest the pope should stick to his rosary. In fact, he would have seen the pope's encyclical as the continuation of a discussion Smith himself started. 



How to wreck a reputation

Broken-telephoneThe Federal Communications Commission said it plans to fine AT&T $100 million for capping the speed on data plans it advertised as "unlimited." 

I have no insight into how AT&T is managed these days, But when I ran public relations for the company, we had constant battles with line management about the announcement of price increases and other customer-affecting moves.

We in public relations wanted to issue a news release explaining any increase; line management thought it was sufficient to mention it in mice-type legal ads. 

Luckily, for most of my tenure at AT&T, there was another player in this mix -- the company's CEO, who could see further than the next quarter's earnings report.  Unfortunately, times -- and CEOs -- change. One incident late in my career points this up.

AT&T's most profitable business -- consumer long distance service -- was in steep decline, thanks to increases in wireless usage, the bust, and a major competitor cooking its books to price below cost. The guys running the business were under incredible pressure.

So I was surprised when they reported a profit spike in one of their monthly reports halfway through the year, especially since it seemed to stem from a significant increase in operator-assisted calls.  I asked what accounted for it and was told they had started charging an extra $10 if customers asked an operator to complete a call. 

I said I was amazed that, in this day and age, so many people needed an operator to help to make a long distance call.  Well, sometimes people's calls don't go through because they misdial to a non-existent number, I was told.  If they call the operator for help, she connects the call but adds $9.99 to whatever the final bill is. (In those days, nearly all operators were women.)

“But surely she tells the customer there’s an extra fee involved,” I said.  The guy at the overhead projector grew Little Orphan Annie eyes.  “Well, yes,” he said.  “But she doesn’t say how much unless asked.” 

Our new CEO -- brought in from outside the industry -- sat quietly through the ensuing argument until someone mentioned that the revenue from the extra charge was baked into the unit’s profit forecast.  “In that case,” he said, “change the policy on January 1.  Next subject.”  

Fifteen years and three CEOs later, the subject is data throttling, and the object under discussion is a $100 million fine.  That's a lot of money, even for AT&T. But even if the company successfully challenges the fine, it will pale in comparison to the billions it saved by slowing down data usage on its "unlimited" plans. So in dollars and cents terms, this is probably a no-brainer for today's modern manager.

But in the long-run, it could be a disaster for the company's reputation. 


Why legacy media went off the rails

Diet-train-wreckWhy did legacy media go off the rails?

It was operator error. But it was on the business side, not in the newsroom.

In their migration to the digital world, legacy media have been fairly successful in digitizing their content, but they've failed to exploit the real driver of revenue -- digital media's targeting capability.

Advertisers haven't flocked to digital media because they prefer bits to atoms, but because digital media can marry their messages to receptive audiences.  An ad in the New York Times theoreticaly can "reach" millions of readers, but only a handful actually notice it and even fewer are interested in the product or service advertised.

Google Ad Words has long matched ad messages to people searching for a specific topic. Now, new apps from the likes of Apple and Facebook will match ads, people, and some of the best journalism available.

The recently announced Apple News app will curate articles from mainstream media, feed it to people with a pre-determined interest in them, and accompany them with ads targeted to their past buying behavior, demographics, and attitudes. Of course, Apple will share ad revenue with the source of the article. Ditto Facebook's Instant Articles feed.

Both apps promise to give readers highly personalized feeds tailored to their interests, something legacy publishers like the New York Times have been unable -- or loath -- to do.

Legacy media's inability to make money from their content hasn't been a failure of journalism, but of the business side that's supposed to feed it. The closest the business side has come to producing a new revenue stream is "native advertising," which is essentially an effort to disguise ads as  journalism. 

Meanwhile, many publications are willing to give up 30% of the ad revenue associated with the stories Apple and Facebook decide to publish.

Prediction: they'll get hooked on that revenue, Apple and Facebook will reinforce their positions as dominant information channels, and that 30% share will shrink.