Public Relations

The voice of the paparazzi


The paparzzi used to focus their lenses on the likes of Brad and Angelina for the vicarious thrill of the masses. But now they and their keyboatd wielding colleagues play a critical role in corporate governance and marketing.

Way back in 1970, economist Albert Hirschman suggested consumers and investors have only two choices when they believe a company is doing them wrong: they can "exit" (end the relationship) or they can "voice" (complain until the company changes).

As a practical matter, exit doesn't accomplish much any more. Organized product boycotts are rare. And when Hirschman wrote his paper, the turnover of an average managed mutual fund was 17% a year; by 2000, it was 91%, meaning funds sold nearly all of their holdings every year. Many funds, in fact, have turnover ratios of more than 100%, holding the typical company share for less than a year.

That leaves voice. Again, when Hirschman wrote his paper, voice belonged to a privileged few. One consumer's voice tended to get lost in the  clamor of the marketplace. Even if consumers or investors ganged up on a company, their voices could be drowned out by a barrage of advertising and misdirection.

Today, everyone is a publisher. Blogs and tweets have outsized influence. According to one survey, 90% of consumers say their purchasing decisions are influenced by online reviews.

And media of all sorts amplify the voice of governance experts who used to toil in obscurity. Just this week, the media reported Walmart's board was criticized by an institutional investor group for being too chummy with management. Last week, the media reported Chipotle's sharowners overwhelmingly voted against an executive compensation plan they considered overly generous.

None of these expressions of "voice" is binding. But when the mainstream media report them, they take on added urgency. Corporate America is not governed by the media, but it is highly influenced by it. When I attended AT&T board meetings, I was far more likely to hear "how will the Journal react to this," than "what will the SEC say."

And then this story on the front page of today's New York Times puts a human face on GM's ignition switch problems, turning the emotional level of the discussion way up. 

Law and finance professor Louis Lowenstein termed all this "the voice of the paparazzi," way back in 1999 before the Internet changed everything. Ironically, his son, Roger Lowenstein, is one of the most highly respected of those voices.

"The new voice in town is the raucous, incessant beat of the analysts and the media, and boards and CEOs now pay heed," he wrote. "With good numbers on which to base detailed, credible reports and stories, those oh so rude paparazzi have an impact that puts ministries of finance and cronyism to shame."

That new voice now has more power than Prof. Lowenstein could ever have imagined.


The week in corporate malfeasance

Corp.001This has been a busy week in corporate malfeasance.

Credit Suisse pleaded guilty to criminal charges of aiding and abetting tax evasion in the U.S. and was slapped with a $2.6 billion fine.

General Motors announced its 30th recall bringing the total number of vehicles hauled back into dealerships to 15.5 million, a new record and the kind no company likes to register. 

Chipolte Grill suffered an ignominious vote of no confidence on executive compensation. Nearly three-quarters of shareowners voted nay, the largest percentage ever. 

Which company turns out to be the biggest loser depends on your point of reference, as well as on the actions each company takes from here on out.

If you're an investor who is only interested in the company stock price, you might consider Credit Suisse's travails much ado about nothing. Helping clients avoid taxes -- even when it amounts to tax evasion -- is not the kind of thing that makes customers hesitant to do business with a firm. It might have if Credit Suisse turned in the tax-evading clients, but the firm dummied up about that. And despite its guilty plea, the company retained its license to operate in the U.S., including as a Federal Reserve counterparty. Even that humungous fine looks like the cost of doing business. The company -- and investors -- essentially shrugged the whole thing off. 

General Motors isn't shrugging, but investors seem to be reserving judgment on the long-term customer impact of the recalls. They think if the company's new management can position these recalls as an effort to correct the mistakes of the past, GM may slide through. Americans love second chances. But that means the break with the Old GM has to be dramatic -- there has to be blood in the water. And customers will be looking for evidence that the company is dealing fairly with the families affected, no matter what the bankruptcy court says it's legal obligations are.  

Investors in Chipolte Grill, on the other hand, aren't going to let the issue of executive compensation go away. The shareowner vote is non-binding, but it's hard to see how the company's board can ignore it completely, despite the stock's stellar performance (which ironically contributed to the outsized pay packages to which executive comp is closely tied). In fact, the company has already signaled it got the message. Its board will probably make some changes along the lines of putting more restrictions on equity grants.

But there's an isssue lying in the weeds that could prove fatal -- inequality and declining economic mobility.  

Chipolte CEO compensation is 775 times the company's average worker. That's better than the 1,200 to 1 average in the fast-food industry as a whole. But it's substantially higher than the 200 to 1 average across all industry segments. 

CEO-to-worker salary ratios may have little to do with inequality or economic mobility. But they're fuel for the fire. And no company wants to get too close to that conflagration, much less tied to a post at its center. But that's exactly where Chipolte's core customers -- well educated, socially conscious foodies -- might be persuaded to put it. Chipolte has to get as creative on this issue as on the recipe for its sustainable, GMO-free organic burritos.

Of the three companies, unless some damaging new information surfaces, I'd worry most about Chiplote.



A model of resilience

19-jill-abramson-wake-forest.w1058.h704Lessons from the saga of Jill Abramson's dismissal from the New York Times.

1. Perceived hypocrisy magnifies apparent misbehavior. Accusations that the New York Times was guilty of gender bias were particularly explosive given its status as the in-house paper of the liberal establishment. Rather than earning it the benefit of the doubt, the paper's liberal creds made it look even worse. Somewhat the same thing happened to AT&T during the infamous monkey cartoon scandal in the 1990s. 

2. High profile misbehavior -- real or imagined -- is particularly dangerous if it fits within a pre-existing narrative. Accusations that Abramson was not paid the same as her male predecessors for doing the same work illustrated the very real problem of gender bias in pay. Similarly, accusations that she was a tough manager caused many to ask if the same would have been said about a male executive editor. Gender bias is a real issue. Abramson's dismissal, justified or not, was the match that lit the bonfire.

3. The specific crowds out the generic. You'd think Abramson's dismissal would prompt a deep exploration of the gender bias that supposedly prompted it. But there has been little discussion of the societal causes of unequal compensation. And many have asked why women can't be as high-handed as men, rather than asking why high-handedness is acceptable in anyone of any gender.

4. Finally, in all of this, the better communicator has been Jill Abramson. She has said little about her dismissal publicly. Even her commencement address at Wake Forest University was a model of indirection. She put the focus where it belonged -- on the students and their parents -- but found a way to make her experience relevant to them. 

“I’m talking to anyone who’s been dumped, not gotten the job you really wanted, or received those horrible rejection letters from grad school,” she said. “You know the sting of losing or not getting something you really want. When that happens, show what you are made of.”  She not only encouraged them to show resilience, she modeled it.


Abramson in the ring

Newyorkpost-051614Jill Abramson reportedly will get into the ring to fight her firing through a commencement speech at Wake Forest University on Monday, May 19.Meanwhile, the New York Post is having a lot of fun poking its crosstown tabloid rival, including with an Instagram photo posted by Abramson's daughter.

And the brouhaha about her firing continued on the Sunday talk shows with all the wrong questions. There were two big issues: compensation and management style.

On compensation, Abramson's salary has been used as a symbol of the very real issue that the average woman makes significantly less than her male colleague doing the same work. But whether Abramson was one of those women is questionable.

When she started as editor, she made less than her predecessor. But he had been executive editor for eight years. When I was executive vice president of public relations at AT&T, I made significantly less than my predecessor (a woman) for more than two years. According to the data I've seen, Abramson caught up in far less time than I did.

The other big issue has to do with Abramson's "pushiness." I haven't heard anyone at the Times call her "pushy." The publisher did accuse her of “arbitrary decision-making, a failure to consult and bring colleagues with her, inadequate communication and the public mistreatment of colleagues.”

On the Sunday talk shows I heard today, this was reduced to a questions: why can't a woman be as high-handed and abusive as a man?  Wrong question.

I never worked for a paper remotely like the New York Times. But I have surervised creative people and the biggest lesson I learned along the way (belatedly to be sure) is that they do react well to high-handedness.

On the contrary, they like to be included in decisions that affect them. They prefer a collaborative environment to a culture of command and control. And they expect to be respected as professionals with equal dignity if not rank.

Apparently, the Times terminated Abramson for failing -- after some prodding -- to measure up to that standard. Because she didn't, she apparently lost the support of the people reporting to her. Under those circumstances, her boss was well within his rights to remove her. 



The PR of managing the plank they walk

FiredJill Abramson has been relieved of her responsibilities as executive editor of the New York Times after less than three years on the job.

I don't know Ms. Abramson. Still, I've been an admirer, and I thought many of the changes she brought to the New York Times were inspired.

If I were still working with Times' journalists on a daily basis, I might have been aware of rumored newsroom tensions. But as it was, I was surprised as anyone. I was especially surprised by the relative transparency with which her departure was announced. 

I say "relative transparency" because I'm comparing it to the usual practice in corporate America.

When I ran PR for AT&T, I handled the departures of a number of senior executives. In all but one case, they were removed for cause, either incompetence, insubordination, or the failure to produce the results they promised.There were also a couple of cases of misconduct. 

But in every case, we said they left "to pursue other opportunities," "to spend more time with their families," or "because they accomplished what they set out to do." 

I couldn't understand why we weren't more candid about the reasons behind the executive's departure. The lawyers explained they were afraid the company would be sued for disparagement. Other executives said it would embarrass the company to admit it had promoted someone so (pick one) incompetent, insubordinate, or venal. And, I suspect, the people who actually did the firing just wanted to turn the page.

But I always considered it a missed opportunity. If people draw lessons from the people you promote, won't they draw even more powerful lessons from the people you fire? I saw it as a way to manifest the "Common Code" set of values that hung in every company conference room.

The Times publisher, Arthur Sulzberger, Jr., seems to have come to the same conclusion. And since his family owns the company, he can actually act on it. Ms. Abramson is a great journalist, but removing her was necessary to "improve management of the newsroom," he said.

By the standards of corporate America, that's as transparent as it gets. 


Preview of coming attractions

America's morphing age pyramid

The image above is our future. It portrays the U.S. population in five-year age increments over the coming decades.

We go from a lumpy pyramid with lots of young people at the base and a few old codgers at the peak (as in 1950) to more of a rectangle with pretty even age distributions, except for a really large group of octogenarians-plus at the top (as in 2060).

I won't be around to see it, but what happens between now and then has implications for marketing, public relations, and politics that are worth considering.

  • Daniel Moynihan attributed the turmoil of the 1960s to the large cohort of adolescents and 20 year-olds produced by the Baby Boom in that period. How will the huge cohort of Boomers entering their 50s over the next few years change our culture and politics?
  • By 2060, there will be almost as many people over 85 as younger than 5. Will that create greater division or less? Our experience so far is that young and old don't purchase, vote, or think alike. Will that continue? 
  • At the same time the population turns gray, it's also becoming multi-colored. By 2042, we will be a minority-majority population. That's already true in four states and in our 18 larhest metro areas. Do our communications reflect that yet?  

 For more questions (and a few answers), I recommend the Pew Research Center's latest report, Next America.



Media relations ethics New York Times' Public Editor doesn't have an explicit mandate to comment on ethics, except in the broadest sense.

But sometimes she does so by implication. And often the ethics in question are not those of the papers' reporters, but of the PR people they deal with.

Take today's column which questions the ethics of a source setting the ground rules under which it will give reporters access to news.

The particular news in question was not exactly earth-shaking or even market-moving: it concerned the federal Food and Drug Administration’s new guidelines for e-cigarettes. But the F.D.A. would only give reporters an advance outline of the new rules if they agreed not talk about them with industry or public health groups until they were released a day later.

It's not hard to understand the various parties' motivations here. The reporters wanted a day to prepare their initial news story so they could put it on their paper's web site as soon as the FDA issued their news release.

The FDA didn't want the initial news stories to include any potential criticism from those industry or public health groups.

Thus, the ground rules under which it gave some reporters early access to the guidelines. Reporters were happy; the FDA was happy. The only people not well served by this deal were the public they were both supposedly serving.

I won't speak to the ethics of journalists accepting such ground rules. People like the Times' Public Editor are in a far better position to do that. But I think PR people should re-consider the ethics of this practice.

It's one thing to hold a background briefing or to issue a news release on embargo. I did that often enough myself in my days at AT&T when the news was complicated and required careful study.

But it's another matter entirely to try to manipulate the very process by which a journalist covers and reports the news. The only possible justification for that is that a PR person's duty to a client surpasses any duty to the public.

The ethics codes of the various PR professional associations dance around this issue. It's time to measure our policies and practices against a clearer standard. Any PR person's first duty is to the public if only because that's our clients' first duty as well.

Any ground rule that ignores that fact slips from PR into propaganda.



Ethics in your pocket

Ethics appPity the beleagued engineers at GM back in 2005.

The company was circling the toilet having just recorded what was then the largest financial loss in its history. And its engineers were trying to figure out what to do about an apparently faulty ignition.

They made what professional ethicists would term a teleological or consequentialist decision, i.e., one that produced more good than bad. They decided the cost of recalling thousands of cars to replace a faulty ignition would be more expensive than simply replacing them under warranty when they failed. 

Actually, if they had been good consequentialists, they would have included the effect on customers in their analysis. But in a competitive business obsessed with costs that's not always easy.

Now there's an app for that.

The Markkula Center for Applied Ethics has developed an iPad app "for thinking through tough choices." It leads users through a balanced framework of ethical reasoning, identifying all the parties potentially affected and considering five concerns: utility (more good, more bad), rights (more rights, fewer rights), justice, common good, and virtue.  

It's like having Aristotle, Kant, and Mill on your cellphone's speedial.


Crossing the line

Donot crossCreating content at the intersection of a brand's competencies and readers' interests is a good thing. But when taken too far, it can cross a line.

Chevron, for example, has operated a refinery in Richmond, California, since 1902. When the local newspaper went out of business, the company launced an online news site, promising to provide residents with "important information about what's going on in the community."

On the surface, that looks like good corporate citizenship. But the ethical conflicts should have been obvious.

For example, one wonders how Chevron's Richmond Standard would have covered a 2012 fire at its local refinery. That accident cost the company $2 million in fines and restitutions. 

To be sure, Chevron's role in producing the site is clearly noted. And the paper's typical coverage is pretty non-controversial, focusing on community projects like local tree maintencance or BART's new train design

But the site will inevitably face conflicts in covering its owner or any issues that touch it.  For example, in article under the headline "Chevron Speaks," the company rebutted an allegedly "misleading" article in an alternative weekly that was critical of Chevron's planned refinery modernization project. A posting under another section called "Community Speaks" is by a local union official who praised the modernization project and Chevron itself.

I'm sure Chevron is a fine company. Its motives may be pure. But it really crossed the line here. It could have filled the gap in local news coverage in other ways that wouldn't represent such an obvious conflict.



Burson on PR Ethics

BursonMy current long-term project is a book on public relations ethics. (Yes, I know it's an oxymoron in some minds, but still...)

I'm not sure how this will turn out or even if it ever will. But in the course of my research, I ran across something Harold Burson said in an interview with the Page Center at Penn State University.

It deals with the issue of PR practitioners' ethical responsibilities towards their clients and I'm reprinting it here, with slight edits because it's based on a video that isn't always clear:

"I believe that every institution, every person is entitled to have public relations representation. I do not believe that I am compelled in any way or manner to be the one who provides that counsel representation.

"On the other hand I think that [in regards to] unpopular causes which are legitimate [and with] which I may not agree, I do not think it’s unethical for me to represent that client as long as I can do so in a way that my client is not compromised by ... disagreement.

"I think  ... that I am engaged to motivate individuals or groups to take a position or take an action that my client seeks to have taken. I think I should however as a public relations professional make the judgment on whether I represent such a client by asking myself the question, 'is what this client wants to do in the public interest?'

"And I think that is a factor that is very important [and] sometimes overlooked. The fact is I believe that no action can be sustained or successful if, in the long run, it is not in the public interest." 

While existing codes of conduct published by the various professional associations dance around the issue, Burson puts the public interest at the center of ethical decisions in the practice of PR. 

I could devote this entire blog to Harold Burson and never run out of material. Maybe I should.



The ethics of advertising drugs

DtcaIn the world of communications ethics, most discussions focus on lying in its multifarious forms -- spinning, obfuscating, deflecting, etc. 

But totally truthful communications can also raise ethical questions.

For example, here's an issue I've been pondering lately: do the risks of advertising prescription drugs directly to consumers outweigh the benefits?

On the one hand, direct to consumer advertising helps educate patients and makes them more likely to take the drugs a doctor prescribes.  But since pharmaceutical companies advertise only their newest and most expensive drugs, it contributes to the rising cost of drugs.

Furthermore, many physicians complain that patients pressure them to prescribe advertised drugs even though they don't understand the potential risks. In fact, physicians are far more skeptical about direct to consumer advertising than patients.

And there are other questions:

  • To what extent has direct to consumer advertising promoted an attitude that good health is the product of drug consumption rather than healthy habits?
  • Has direct to consumer advertising made the consumption of presecription drugs seem "normal," rather than an extraordinary intervention to cure an abnormal condition? 
  • Are recent increases in direct to consumer drug advertising, prescription drug abuse, and heroin usage simply coincidental or correlated?

DTC-Advertising-ENIndustry spending on direct-to-consumer advertising rose tenfold in the last five years. Prescriptions written for opioid painkillers such as Vicodin and OxyContin rose more than 500 percent in the same period. There's no question that a lot of those drugs are eventually used for non-medical reasons. As a result, more than 100 Americans die of a drug overdose every day, more than twice the number ten years ago. 

And as prescription drugs become more expensive, harder to get, or simply less effective, they have become a new pathway to heroin addiction. According to the National Institutes of Health, one in 15 people who take non-medical prescription pain relievers will try heroin within 10 years. 

Drug overdoses and heroin addiction in suburban New Jersey have increased so dramtically the state issued a stark warning last year:

"We now live in a state where abuse of prescription pills serves increasingly as a primary route to the unlawful world of heroin, an intersection of the legitimate and the illicit that constitutes a crisis whose devastating consequences are plain for all to see."

Pharmaceutical companies -- many of which make their headquarters in New Jersey -- need to get ahead of this developing crisis. Part of their agenda should include studying the societal effects of direct to consumer advertising. We know that when characters smoke in movies and on TV the rate of smoking among teens increases. Might the same thing be happening here?

Big Pharma may be on the slippery slope Big Tobacco plowed a few decades ago. 



Theater Review: GM on Capitol Hill

Capitol Marquee.001The curtain rose on the congressional hearings into General Motor's ignition problems yesterday. Another performance has been scheduled for today, but with luck the show will then close.

As usual, these hearings followed a familiar plot line in the repertory of these predominantly old war horses. But a visiting cast member, new to this stage, gave a promising performance.

As is well known, Members of Congress treat these hearings as political theater in which they are the stars. There's more posturing at these events than on Fashion Week runways. 

Almost everything knowable by the time the hearing starts has already been summarized in a lengthy memo prepared by the Committee's staff. The real goal of the hearing is to show the members staring down a CEO when they're not raking her over the coals. 

But in yesterday's performance, GM's CEO played her part with exceptional sensitivity and control:

  • She sat alone at the witness table and didn't hide behind lawyers.
  • She didn't succumb to the members' baiting and remained calm and cool.
  • She repeatedly expressed regret and sympathy for the people hurt by the company's long delay in replacing faulty ignitions.
  • She didn't make execuses and explained what she is doing to answer questions like why it took so long to recall the switch, who was accountable for failing to do so earlier, and how it can be avoided in the future.
  • She announced that, in addition to hiring lawyers to find answers to those questions, she has also retained Kenneth Feinberg to address the ethical issues involved, suggesting the company won't hide behind bankruptcy protection.

This last plot point -- a novel twist in a hackneyed plot -- may lift the performance into award territory.

It indicates that GM sees this not an engineering, marketing, or financial problem, but as an ethical issue. That puts the company on the right flight path to restoring its reputation. And it suggests a storyline other companies might consider if cast in the same role.



Aristotle was a PR guy


Aristotle would have put public relations squarely at the intersection of rhetoric, politics, and ethics.

Most practitioners would readily agree with the first two. But even though PR thought leaders since Arthur W. Page have said "PR is 90% doing and 10% talking about it," most practitioners interpret that in defensive terms as in, "don't do something you'd be embarrassed to see in the newspapers."

Several stories in today's Wall Street Journal suggest PR counsel has a more fundamental role -- helping CEOs sort out the difference between what a company has a right to do and what's the right thing to do.

To wit:

How the invansion and takeover of Crimea should affect General Electric's investments in Russia, considering that its German competitor, Siemens, has pledged to move forward despite EU sanctions. And should Siemens have done that?

Whether activist investors should leak their plans to potential allies, even though it appears to be legal.

Whether drug companies like Merck and Glaxco should suspend a program to help patients with copays on expensive drugs even though the terms of the Affordable Care Act are ambiguous.

Whether GM's CEO should issue a video telling customers the cars it recalled for ignition problems are safe to drive even if they haven't been fixed yet.

None of those questions are easy to answer. I suspect each company's lawyers were all over them. Probably the finance people as well. Maybe even marketing. All looking at the issues from their functional perspective.

I'd like to suggest the chief PR counselor should also be involved. Not to speculate on the potential public and media reaction. Not to answer the question, "Will it work?" But to offer an principle-based opinion on "Is it right?"

The Big Question: are PR people equipped to tackle those ethical questions?



How the White House uses Twitter

Obama twitterIf you're in PR, I urge you to subscribe to Mike Allen's daily "Playbook," even if politics makes you gag.

It's not only a good summary of what's happening inside the Beltway, it often includes insights on communications, as in this summary of yesterday's breakfast briefing for Politico readers by Dan Pfeiffer.  

Pfeiffer is White House senior adviser for strategy and communications. Whether or not you think President Obama has used communications effectively in office, there's little question his campaign's use of social media was masterful.  

Pfeiffer was at the center of campaign communications, having joined Senator Obama's staff Jan. 15, 2007, the day before he announced his presidential exploratory committee.

Below, highlights of what he had to say about social media, especially Twitter, as reported by Mike Allen:

--On how Obama decided to make his unusual late-afternoon appearance in the White House press room on Ukraine last week: "We obviously have a lot of sources, but ... with Twitter and social media, you start to see pictures of troops in front of bases or in front of airports ... In more closed societies where we have potentially less information, like in Iran during some of the political uprising earlier in the presidency, you learn a lot what was happening [from Twitter]. We found out a lot of what was happening in the Arab Spring by folks on the ground doing individual reporting of the social media or Skype."

--On Twitter strategy: "It is where the debate is really shaped -- I mean, it is really where the elite political debate is shaped. ... In the first debate in 2012, there was no question in my mind that the Twitter reaction to the President's performance greatly exacerbated the coverage and the reaction to it. ... I was in the Chicago headquarters the night of that debate, with the folks doing rapid response. And so, we had two screens: You had the TV and you had the Twitter feed. ....

"And if you were watching the TV you were thinking, 'This is not great, but it's not disastrous.' If you're watching the Twitter feed, you're seeing Andrew Sullivan and others threatening to commit ritual suicide over the President's performance and it's starting to spiral. And then you know how tough the folks in the spin room are going to have it that night."

--On Twitter in the midterms: "In 2012, for the most part, Twitter was a more elite conversation. It's how reporters are viewing events, it's how political operatives are shaping that, it's how the very most politically involved folks are looking at it. ... Twitter will be a little more like Facebook than it was in 2012. I think there will be more regular people getting their information from it, and so it will have more effect on the populous at large than it did in 2012. ...

"The big thing in the last year or so is it's less about the 140 characters than what you're doing with graphics and images. And some of the most retweeted things we have are charts and graphs that explain the President's policy. So, we're always thinking about, ... as we're rolling out any policy: What is the graphic representation of this that is sharable on Twitter and Facebook."

--On how Twitter makes governing harder: "In 2008, the Obama campaign ... broke all kinds of barriers. We were the smartest Internet campaign ever. We were pushing the envelope, and the Obama campaign sent one tweet in 2008. By the time 2012 comes, Twitter is driving the debate; it's a huge piece of the strategy. The campaign will spend time every day thinking about how you use Twitter in the campaign.

"So, there will be something in 2016 that we don't know what it is yet, but I can promise you ... it's going to be faster and with greater potential benefit but also greater risk. And it will probably be great for campaigns, and make governing harder. ... Governing takes time. You have to make decisions that have good substantive outcomes that are thought through. ..

"What used to take a week or two weeks in terms of the press cycle -- let's take Ukraine as an example. Ten years ago, maybe five years ago, something happens in Ukraine, the President goes out, everyone covers the fact that it happened. Then, everyone is altogether on it and we're united, and then we see how the strategy plays itself out and then maybe people start to have [criticisms] and then there's a moment where the press turns on you ... Now, the President spoke at like 4 o'clock and was at the DNC giving a speech at 5 o'clock, and all of that happened by the time we got off the stage with the DNC. ...

"And so it makes it harder to be deliberative and strategic ... [I]t used to be that you'd read the story about the baseball game that night or the next day. Now, the political equivalent would be: We're not just writing the story about it every inning, we're writing it every pitch. And so there's an element of hyperbole or apocalyptic description of it at every moment, like, 'This is the greatest foreign policy crisis the President's ever had, or the biggest test of the presidency.'"

--On how he avoids being swept up in the Twitter rush: "[B]efore we go out and do something, [Obama will] take a step back... He's always urging us to play the long game, to think through how this is going to affect our ultimate goal, and so that slows us down. The other thing is experience ... The longer he's here, the longer we've been in the White House, you have a greater ability to separate the signal from the noise -- what is a real political problem, real legislative problem, and what's just the fleeting thing of the moment.

"I was thinking about this when Secretary Gates' book came out. ... There were some excerpts in there that were taken and blown up to be this big thing ... I'm confident that, four years prior, a lot of the people in the White House, myself included, would be running around like chickens with our heads cut off trying to figure out how we're going to respond to this, it's the biggest thing ever. Then, it turns out, like three days later, the press moved on to other things. The press fires now burn hotter and faster than they did before. But a few days later, you're on to something else."


Can't anybody here play this game?

Casey stengelThat's a Casey Stengel quote, though I really stole it from Allan Sloan, who used it in describing AT&T when I worked there. (Sloan thought it so apt, he used it as a headline on two columns.)

It was appropriate then, and I think it applies now in describing the state of much of the writing about the "new media."

New Yorker writer George Packer describes such writing as "opaque."

And I think he puts his finger on the cause -- it's pretty much endemic, he says, "whenever journalists write about anything having to do with technology, as if they’ve become captive to the assured, technical-sounding, empty language of their beat—as if they need to use its language in order to be taken seriously in that world, and to hell with the old-fashioned, outdated virtue of clarity. Surrendering to jargon is a sign of journalism’s dismal lack of self-confidence in the optimized age of content-management systems."

If journalists have difficulty breaking free from the jargon of the technology "space," to used just one of those words, what hope is there for PR people whose salaries actually depend on the marketing and engineering managers who spew it? 

How self-confident was the PR person who penned this headline, taken totally at random from BusinessWire? "Automated Capacity Management and Solid-State Solutions are 'Must-Haves' for Strategic Capital Markets Data Storage Infrastructures."

I rest my case.


Trader Joe's Fearless Flyer

Fear;ess FlyerA great example of branded content landed in my dead tree mailbox the other day. Trader Joe's Fearless Flyer is published every now and then by the grocery chain of the same name. 

The Fearless Flyer (get it?) looks like it was put together by stock boys with access to Victorian era clip art and a word processor. 

My copy ("Always free and worth every penny") ran to 24 magazine-sized pages of very cheap-looking paper. ("Printed on 100% recycled paper with soy-based inks. For mental consumption only," it says in tiny type along the spine.) 

The soy ink apparently comes in three biodegradable colors because the flyer is chock-a-block with stories printed in red, blue, or black. Some stories are circled with a think line of the same color. "Gluten Free Mac & Cheese" warranted highlighting; "Gluten Free Greeting Cards" didn't.

The chain itself describes the Flyer as a cross between Mad magazine and Consumer Reports. But it's really much more.

Flyer issueIt's a semi-private communication with the chain's cult-like followers. And it's just what they would expect. 

Not only does it announce that it's selling Organic Tomato Basil Sauce for "Just $2.29!" as any grocery flier would, it describes just how it's made -- "simmered in small batches to bring out the bright flavors of the fresh ingredients" exclusively for Trader Joe's.

There are also short articles on subjects like Poutine, "a mess of good things" from rural Quebec, 4 Kouigns Amann, "a classic French pastry" that is "the darling of the food scene right now," Pa Jeon, scallion pancakes made especially for the chain in South Korea, Quince Paste, made for the chain in New Zealand, and Barramundi Fillets, a mild white fish native to Australia, but grown just for Trader Joe's "in low- density farms, on sustainable feed, with the utmost consideration given to cleanliness and sustainability."

The flyer also advises on the history and correct pronunciation of its "carefully cut camembert (that's cam-em-BEAR)" and the difference between a serum and a lotion or a cream ("Boy, are we glad you asked that question.).

Add National Geographic to that mix of analog publications. 

Plus, on page 13, there's a pre-printed shopping list of all 87 items mentioned in the flyer, organized by department and cued to the page on which they're described. Ever helpful, if quirky, the editors also provide space on the list for "Things You Don't Need."

It all works for some reason. (There's also an electronic edition, with the same steampunk graphics, but it doesn't have the same tactile, low-rent quality as the print version.)

The Joe in Trader Joe's hasn't been around since he sold the business to a German retailer back in 1979. But all the store's "crew members" still wears Hawaiian shirts just like he did, and the in-store signage still has the vibe of a South Seas trading post.

It's a company that knows what it is and what it stands for. And it communicates that character by exercising it, not by advertising. It hires extroverted people to staff the stores (want to wear a Hawaiian shirt year-round?), stocks a fraction of the groceries the big chains do, but compensates by offering products unavailable anywhere else. About 80% of its goods are private labled.

In fact, a lot of it sounds like it came straight out of the cargo hold of some world weary vessel that just washed up on the beach.

All of which gets to the essence of effective branded content -- it reflects a brand's character and higher purpose, the fundamental reason it's in business and the unique approach it takes to fulfilling that purpose. It's a customer service, not an ad.

Higher purpose doesn't have to be high-falutin', but it does have to be deeply rooted in customers' needs, aspirations, and values.

Trader Joe's customers care about low prices, organic and sustainable products that are sometimes unusual and almost always unique (e.g., miso ginger broth from Japan, botantical foaming hand soap, and organic coconut sugar). 

That's what Trader Joe's is all about, from its inventories to its pricing. And even its occasional Fearless Flyer.


Reputation vs. character

CharacterMy latest column for the Conference Board Review is out.  You can read it here. It draws a distinction between "reputation"  and "character."

As Abe Lincoln once said, "“Character is like a tree and reputation a shadow.”

Too many PR people are fixated on reputation when they really ought to be concerned about their organization's character.

That's not a new idea. In addition to Old Abe, the Arthur Page Society has published several papers making the same point.

My column is just a modest effort to draw more attention to it. 

How to knit an argument.

Knitting toolsThere isn't a better lab for studying the mysteries of structuring arguments than Washington, D.C.

Consider this item from today's Wall Street Journal.

The Treasury Secretary yesterday predicted that the government debt limit would have to be lifted by the end of February. According to the Journal, some conservative Republicans -- chastened but not deterred by the public reaction to the last government shutdown -- are exploring potential concessions they might extract for agreeing to raise the debt limit.

One potentially attractive demand is changing an element of the Affordable Care Act known as "risk corridors." Those are payments which help offset the risks insurers assume in selling policies to all comers, without regard to things like pre-existing conditions.

Few voters know or care what a risk corridor is, but they overwhelmingly favor the elimination of pre-existing conditions. In less skillful hands, that would seem to make this argument a non-starter. But that's where the rhetorical brilliance comes in.

Rep. Steve Scalise (R., La.), chairman of the conservative  Republican Study Committee, side-stepped the intricacies of risk corridors and pre-existing conditions and focused on these poll-tested facts:

  • Americans think the government has too much debt.
  • They don't like insurance companies.
  • They hate government bailouts.
  • They're suspicious of China. 

With all the embroidering skill that went into the Bayeux tapestry, Mr. Scalise came up with the following:  

"We shouldn't be bailing out insurance companies
with money that's borrowed from China."  

Thirteen words any fifth-grader could understand and a master class in how to structure an argument.

Liberal or conservative, you have to admire the rhetorical skill.



Content creation at its best

Trust-Around-the-World-300x140For an excellent example of brand journalism, look no further than the annual "Edelman Trust Barometer," released just in time for the World Economic Forum meeting in Davos. 

The 2014 report shows the largest ever gap between trust in business and government since the study began in 2001.

It will undoubtedly garner more media coverage than most PR initiatives. And despite all the other studies and surveys in the field, it will once again emerge as the go-to source of macro data for journalists and academics writing about reputational issues.

It's the perfect example of intelligent content creation:

  • It's proprietary. Edelman has owned these industry and sector specific measures of trust since 2001. The earliest surveys interviewed a few hundred "informed publics" in a handful of big countries and were of dubious import. Later surveys have had 33,000 participants in 27 countries.
  • It's newsworthy. The results always come out just before the Davos shindig so journalists have a natural news hook. A Fox News story, for example, led with this: "Ahead of the gathering of political and business leaders in the Swiss resort of Davos, the public relations firm Edelman found that only 44 percent of university-educated people participating in the survey trusted government, down 4 percentage points from the previous year." 2014-Edelman-Trust-Barometer-Infographic
  • It's well produced. Far from the dry statistical reports lying around your officein unopened binders , the Edelman report is well-written and designed to be easily accessible through white papers, slide shows, and snappy infographics. 
  • It's at the intersection of the agency's competencies and its clients' needs. Trust is the holy grail of any PR effort. The Trust Barometer is the manifestation of Edelman's capabilities. Plus, all those media mentions tend to serve as a de facto endorsement of its unique know-how. It makes the head of every Edelman office an "expert" on the nature of trust in his or her country.
  • It's relevant. Each year's survey explores issues of interest to senior clients in the public and private sector. The 2014 survey, for example, probed public attitudes toward regulation of business. "By a 3 to 1 margin, informed publics called for increased regulation of financial services, energy, and food and beverage industries," the report notes.
  • It has legs. Edelman executives will give speeches based on the survey  for the whole year. It harvested 16 "attributes" of trust from the survey results and has developed a system for applying them to individual clients in report cards and prescriptions for improvement.  


Madison and AT&T's Blind Spot

Madison Google glassesIn today's New York Times' "Sunday Review,"Jeffrey Rosen shines light into a gap in the Bill of Rights on issues of privacy.

Taking a cue from recent court decisions citing James Madison on the issue, he points out that the author of the Federalist Papers had a blind spot when it came to assessing threats to liberty. He was far more concerned about government abuses than anything private actors could do.

Considering that, in those days, the printing press hadn't changed very much in the three centuries since Gutenberg invented it, that's not too surprising. But today's situation is different in kind not just quality.

"Now that Google and AT&T can track us more closely than any N.S.A. agent," Rosen writes, "it appears that the Madisonian Constitution may be inadequate to defend our privacy and dignity in the 21st century." Indeed, based on my own experience at AT&T in the very earliest days of the Internet, he's right. 

Back then, the company hadn't yet anticipated the Internet's full impact on itself, not to mention society. But the executives responsible for gaining a beachhead on the shores of the world wide web immediately understood the value of all the customer information that would be flowing through our servers, e.g., what web sites they visited, what seaches they conducted, what products they bought, etc.

However they had a problem -- the privacy policies the company had developed for the telephone business put all of that data off limits for any purpose other than billing and service. Under a strict reading, it couldn't be used to target advertising to customers. And under any reading, it couldn't be sold to other companies.

A committee of senior executives was convened to address the issue. I recommended that we maintain the same strict privacy standards unless customers to "opt in" to their use for other purposes.

It wasn't a popular position and the company eventually decided customers would have to "opt out" if they wanted to limit the use of the data we accumulated about their Internet usage. 

The AT&T I worked for has since been absorbed by another company that assumed its name and, I fear, Madison's blind spot.  



Pay for play

Pay for playI ran an ethics workshop yesterday for a group of PR people from around the world.

It was an interesting and fun session designed to encourage the participants to think more deeply about their ethical principles by confronting them with no-win situations and dilemmas.

They seemed to take it all with good humor. But at the end one of the participants described a situation he apparently faces all the time in his home country -- the "brown envelope" of money reporters there expect in return for running a news release.

It came up at the very end of a two-hour session, three minutes before a hard stop so everyone could get on a bus for a trip to the New York Times. So I don't think my answer was all that satisfying.

I told him I thought it was unethical to make the payment.

One of the other participants countered that he didn't consider it very different from tipping a waiter. "Reporters in some countries don't make much money," he said. "These payments are considered part of their compensation."

That may be true, as far as the bribe-taking reporters are concerned. But I stand by my answer with an explanation I didn't offer yesterday. It seems to me that paying reporters to run a news release violates a number of ethical principles.

In terms of consequences, it harms the reporter's readers. When they read a newspaper, they expect articles free from outside influences. Even on the assumption that the news release contained no misleading information, its very appearance in the paper gave it news value it might not otherwise have, which is in itself misleading.

It also violates a PR person's duty to engage in fair and open communications. Hiding the payment deprives readers of information that would almost certainly influence their opinion of the resulting story. PR people are supposed to contribute to the free flow of information. This behavior corrupts one of any democracy's key instutions -- a free press.

And on the level of virtue, it's clearly dishonest; otherwise, why the brown envelope? Tipping a waiter is done in the open for everyone, including the waiter's employer (and the IRS) to see. But the waiter's employer would likely frown on a gratuity quietly slipped to a server prior to the meal to ensure priority service. Such behavior would put other diners at a disadvantage and endanger the employer's reputation. I think that's more analagous to the situation at hand.

I admit cultural differences complicate the situation. It's true that pay-for-play is condoned in some countries. But I'll bet that even in those countries, newspaper readers would consider it corrupt and unethical. Why else would it be kept secret?

At minimum, an ethical PR person would insist on disclosure of the payment so readers can draw their own conclusion about the resulting article's newsworthiness and read it with full knowledge of its sourcing.

I don't think the practice of pay-for-play is really an accommodation to cultural differences; it's capitulation to a dishonest practice no culture should accept. What do you think?

New York Times goes native

The-New-York-Times-buildingThe New York Times introduced a new design for its web page and, in the process, showed everyone how "native advertising" should be handled.

Native advertising is content prepared by an advertiser and semi-integrated into a publication.

The first company nestled into the Gray Lady's bosom is Dell. Its ad runs on the paper's home page, next to the stock market quotes and just below a tease to the paper's own opinion pages.

I call it "semi-integrated" because no one would mistake it for anything but a paid ad. It's in a box bordered in blue with the Dell logo and "Paid Post" in even bigger type than the copy, "Can government become entrepreneurial?"

Click on the box and you're taken to a new tab or window where Dell holds forth more extensively, again within a light blue border bearing a warning "Paid For And Posted By Dell," plus a Dell logo hitched to the byline of the author, to avoid any confusion that he's a member of the Times staff.

Navigational links at the top of the page point to other sections of the paper; a string of links in the middle of the posting point to related articles from the Times' archives ("selected by Dell"); and links at the bottom of the page point to other Dell and run-of-the-web postings on varied subjects.

There's no way anyone could mistake this for anything but "sponsored content" akin to the sections on Nigeria or Cincinnati that occasionally run in the dead tree version of the paper.

In fact, this native ad isn't treated much differently than the ad blocks for Capital One and American Express that seem to be running in rotation further down the paper's home page.

Does this ad do much for Dell? Hard to tell.

It's a pretty straightforward report on "Entrepreneurship in Residence Programs" being proposed by some members of Congress to embed technical experts in government agencies. That probably gets the company browny points on Capitol Hill and supports its government sales effort, since at least some of the entrepreneurs in residence any program would fund would presumably come from Dell. And the posting associates the company with innovative ideas for improving the way government functions, which could help its overall image.

But the posting also falls short in several respects.

It isn't really contextually relevent. It's nice to be on the Times' front page, but placement next to links to the Opinion pages is kind of a crap shoot -- sometimes one of the paper's pundits may choose to write about the topic of the posting; most of the time, they won't. There's a better chance readers of the Opinion pages or stock quotes will glance to the right or down and get hooked, but I wouldn't take that to the bank.

There's nothing particularly compelling or newsworthy in the report. For example, it makes no mention of widely-reported technical problems with the roll-out of the Affordable Care Act. While the posting mentions a number of states and agencies that have implemented executive in residence programs already, it describes few concrete results. 

Dell itself is mentioned a few times at the end of the posting, but there's at least one curiously incomprehensible sentence in the version I read. "Ingrid Vanderveldt, Dell’s entrepreneur-in-residence, helps the company the needs of smaller businesses and how to cater its products and services accordingly." (Sic.) What Ms. Vanderveldt -- and by extension, Dell -- is helping to do could be a little clearer.

(I shamefacedly admit that I have been guilty of similar gaffes in this very blog, but I'm not paying tens of thousands of dollars for the space.)

So I think this first venture into native advertising for the New York Times is a solid win for the paper and an incomplete for Dell.

Success awaits a brand that breaks the code on how to use the platform the Times has provided.


It's been 50 years

50 yearsThe media love anniversaries.

At worse, they're a lazy way to generate copy. Predictable in a way real news isn't. And they attract the built-in interest of anyone who was around when the original event occurred.

Since Baby Boomers are the fastest-growing demographic in the U.S., we can expect a spate of stories over the next decade or so about things that happened in the 1960s and 70s.

Those tumultuous decades have all the elements for a steady stream of anniversary stories keyed around themes like "where were you when it happened?" (e.g., the Kennedy assassination) or "look what's happened -- or not -- since."  

Today's front page story in the New York Times is a perfect example of the latter and anniversary wrting at its best. A retrospective on President Johnson's declaration of War on Poverty, which occurred 50 years ago come January 8, it's more than an exercise in nostalgia. It examines a full range of current controversies through the lens of history, including income inequality, Obamacare, food stamps, corporate welfare, racism, the minimum wage, globalization, the high cost of college, unemployment, and the future of Social Security and Medicare. 

Those of us who practice public relations (or write about it) would be wise to consider the string of 50th anniversaries yet to be marked this year:

The Beatles landed at JFK for their first U.S. tour (Feb. 7),

Kitty Genovese was stabbed to death in NY but no one in the nearby apartments reported her screams (March 13)

President Johnson launched "The Great Society," a set of legislative priorities aimed at eliminating poverty and racial injustice (May 22),

Three civil rights workers were killed in Mississippi after being released from jail (June 21), 

President Johnson signed the Civil Rights Act (July 2 ),

Race riots raged in New York, New Jersey, Illinois, and Pennsylvania (summer),

President Johnson signed the Economic Opportunity Act creating a domestic Peace Corps (August 20),

President Johnson signed the Food Stamp Act (August 31),

President Johnson signed the Wilderness Act ultimately protecting 110 million acres of federal land from development (Sept. 3),

The Palestinian Liberation Army formed (Sept. 10),

The Warren Commission released a report saying that Lee Harvey Oswald acted alone (Sept. 27),

Martin Luther King won the Nobel Peace Prize (Oct. 14),

The U.S. Roman Catholic Church replaced Latin with English in masses (Nov. 29),

Lenny Bruce was convicted of obscenity (Dec. 22),

The U.S. Surgeon General linked smoking to lung cancer (June).

Not to mention the introductions of Ford's Mustang (April 17), IBM's System 360 (April 7), the first Arby's restaurant (July) and, at some point in the year, General Mills' Lucky Charms, PepsiCo's Diet Pepsi, and Hasbro's G.I. Joe action figure.

So there you have it: a preview of some of 2014's major stories. And, for some, the stuff of thought leadership, executive speeches, Tweeting, and -- if they still exist, news releases.


Understanding the right

5159439310_bleeding_heart_liberal___wingnut_conservativee_xlargeIn addition to spending more time on the treadmill, one of my New Year's resolutions is to read more from the other side of the political spectrum. It's part of my personal program to move beyond a bumper sticker understanding of the political right. (Sadly, watching Fox News while on my treadmill won't do that. So much for two birds with one stone.) 

I got off to a good start with an essay by Michael Gerson and Peter Wehner in the National Journal. Gerson was a speechwriter for Bush 43; Wehner was an advisor to Gov. Romney's presidential campaign

Their essay is an erudite and insighful explanation of conservative principles. 

Following an obligatory excoriation of the Obama administration as a "travesty" and a "federal power grab," they pause to catch their breath and ask, "what is the proper and appropriate extent and purpose of that government?"

To their credit, they distance themselves from the "rhetorical zeal and indiscipline" of some conservatives "in which virtually every reference to government is negative, disparaging, and denigrating." They agree with the Tea Party view that we should return to the founders' ideals of government, but they disagree that Madison and company viewed the central government as "an evil, or even as a necessary evil."

"The Constitution did not simply create limits on government, as some of today's conservative rhetoric seems to imply; it created a strong if bounded central government," they write. "It is important to speak up when those boundaries are breached, but it is important, too, to remember the aims of that government."

They then describe those aims in broader terms than I would have imagined, with specific reference to the writings of Madison, Hamilton, and Lincoln.

In the process, they identify America's main political battlefield as "the space between the individual and the state" where "the family, civil society, and local community" have historically operated. 

Those institutions have traditionally been responsible for our citizens' moral formation. And they believe most of our current disagreements boil down to a disagreement about the state's role in the formation of the people's moral character. The loudest voices on the right believe the federal government has no role; those on the left believe it has an unfettered role.

Gerson and Wehner believe the state has a limited role in people's moral formation, though they caution modest expectations.

They even go as far as to declare, "Government holds some responsibility for creating the ground for that equality of opportunity, which is not a natural condition." Indeed, they describe our current condition in terms that sound downright leftish:

"... equal opportunity itself, a central principle of our national self-understanding, is becoming harder to achieve. It is a well-documented fact that, in recent years, economic mobility has stalled for many poorer Americans, resulting in persistent intergenerational inequality. This phenomenon is more complex than an income gap. It involves wide disparities in parental time and investment, in religious and community involvement, and in academic accomplishment. These are traceable to a number of factors, including the collapse of working-class families, the flight of blue-collar jobs, and the decay of neighborhoods that once offered stronger networks of mentorship outside the home."

So are they lefties in disguise? Hardly. If they sound reasonable, it may be because they are.  

Here's what they have to say about the role of government:

"American citizenship has evolved around the exercise of liberty in a complex, mutually dependent web of institutions. One of those institutions is and must be government — effective, respected, and limited.

"The purpose of the state is to keep society safe and strong; to protect us from outsiders and from each other; to maximize freedom in a way that is consistent with security and order and that advances the common good; to provide society's 'mediating institutions' the space they need to thrive; to encourage equal opportunity for all citizens; and to make a decent provision for the poorest and most vulnerable. All of this is meant to allow people to flourish and to advance human happiness."

It seems to me there's plenty of room for reasonable people to agree in words such as those.  

Happy New Year.

New-Years-Resolutions-for-College-StudentsA new year and a new start.

I plan to continue these second-and-third-thought postings in 2014, though on a less regular basis.

That's really just a recognition of reality. It's hard to write 500 to 800 words every other day, while tending to other projects, not to mention doing the research necessary to feed such an output.

I don't have any illusions that this will leave much of a hole in my regular readers' schedules. Even 500 words is on the long side of what people read today.

But I will continue to blog when the spirit moves me. And to fill time between postings, I have started a new Twitter feed -- @PrReader.  

My plan is to tweet links to articles and other information I run across that might be of interest to PR practitioners. Hence, the title "PrReader."

I will focus on information and insights that have value in counseling, strategy development, and program design. 

My tweets will hopefully reflect my New Year resolution to broaden my reading to political and social views that differ with my own. 

And, hopefully, this lighter writing schedule will eliminate the last impediment lying between me and my other New Year resolution -- to put my unused treadmill back into service. 

So happy 2014 -- off one treadmill on to another.