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Thank Grandma



We're all the men and women our grandmothers wanted. More than they (or we) ever expected.

Three recent books spell it out.

Jonathan Haidt's The Righteous Mind reveals the inherited gut feelings that undergird our moral systems. And he shows how difficult it is to bridge the differences that result, especially in religion or politics. 

Daniel Kahneman's Thinking, Fast and Slow distills 50 years of psychological research into a lucid explanation of how our decision-making is shaped, and sometimes dominated, by "cognitive illusions" passed down from generation to generation.

E. O. Wilson's The Social Conquest of Earth refashions the story of evolution to show how group selection is the driving force of human development.

Taken together, all three authors credit our common Grandma 8,000 or so generations removed for making us who we are. Grandpa played a role too, of course, but even he had a grandmother who anthropologists are pretty sure got the evolutionary cart rolling.

When she and her sisters dropped from the trees and began walking across the savannah, survival favored those who were disgusted by rotting meat and excrement. Those who weren't gorged themselves, got sick, and died.

Similarly, those who ran from snakes in the underbrush lived longer than those who decided to hang around to get a closer look.

Those who had a natural ability to work in groups brought down bigger game than the loners who set off on their own. Freeloaders and bullies were tossed out to fend for themselves.

A natural sense of fairness and an aversion to causing harm to group members contributed to the group's survival. As did an instinctual hostility towards strangers who could threaten the group or steal resources.

Offspring born with such instincts survived and passed them on to later generations, all the way down to us. 

Some scientists believe that much of our behavior and most of our beliefs are the product of unconscious biases, inclinations, and instincts inherited from our evolutionary Grandma.

They are the fabric of our moral beliefs, the engine of our thinking, and the framework of our relationships. They were adaptations to the environment in Africa 140,000 to 200,000 years ago, even before the development of language.

And they did such a good job for Grandma and her offspring that they endure to this day.

Department of Never Mind

Since I recently suggested  CEOs should address the issue of income inequality as a high-priority concern, I feel compelled to advise you of an opposing view: according to Robert Grady, an investment banker and economic adviser to NJ Governor Chris Christie, concerns about inequality are overblown and distract from the real goal -- economic growth.

To quote Mr. Grady: "If the goal is to deliver higher incomes and a better standard of living for the majority of Americans, then generating economic growth—not income inequality or the redistribution of wealth—is the defining challenge of our time."

Who could be against growth?

Well, my problem with Mr. Grady's argument is that inequality actually increased during the last period of high economic growth from 1979 to 2007, as shown in this report from the Congressional Budget Office.

Shares of income

Mr. Grady attacks "liberals" for ignoring the impact of government transfers, such as food stamps and earned income tax credits, when measuring before-tax income. But he fails to note that the CBO study noted above does take these factors into account.  

But he does go to great pains to point out that the CBO report shows income gains "in every quintile" during this period. Indeed. But he fails to note that incomes in all but the highest quintile were lower in 2007 than in 1979,  showing that inequality grew in the period, which is kind of the point.

Continuing with his data cherry-picking, he cites a study indicating that a widely used measure of inequality across nations shows an improvement in the U.S. from 1993 to 2009 of 0.007 points. He does not admit that left our relative position unchanged.

Given the opportunity, Mr. Grady moves so eagerly to show the glass half full, he nearly tips it over. For example, he points out that "roughly half of those in the bottom income quintile in 1996 had moved to a higher quintile by 2005," apparently not concerned that half stayed where they were. And he ignores other data suggesting that American economic mobility lags other nations'.

Finally, apparently forgetting President Obama's proposal to establish an Infrastucture Bank, not to mention the GOP's determination to "starve the beast," he blames the president for "a sharp drop in real spending by the government on nondefense infrastructure."

He even blames the president for including tax cuts in the recession-driven stimulus bill. Then, in the very last sentence, he lauds the president's stated goal of "making sure our economy works for every working American," but warns that his real goal is "redistribution."

Leaving aside the fact that Mr. Grady provides no evidence to support this alleged plot, it's a little curious it would bother him since he also credits "government transfers" for lowering inequality, starting with his second paragraph: "Virtually all of the data cited by the left to decry the supposed explosion of income inequality ... excludes transfer payments like Medicaid, Medicare, nutrition assistance, the Earned Income Tax Credit, and even costly employee benefits such as health insurance."

I suspect the real problem here is a suspicion that "liberals" will try to expand these transfers, diverting resources that could be invested in growth. That's why so many "conservatives" are opposed to expanding unemployment insurance and intent on slashing the supplementary food nutrition progam (i.e., food stamps).

On the other hand, confronting data such as that cited above, "liberals" have given up waiting for the rising tide that, according to "trickle down" econimic theory, will rise all boats.

But the real issue on which we should all focus: why have past growth investments failed to reduce inequality? 

For example, why, as reported by Bloomberg, is New Jersey the "least upwardly mobile state for low-wage workers." The second worse for the unemployed. And why did it have a negative GDP of 1.28% -- 47th in the nation -- from 2008 to 2012, including the first two years of his advisee's administration?



What's your product's job?

BlackberryHarvard Business School professor Clay Christensen says business people should ask what job customers hire their products to do.

It's a clever way of applying an observation one of his professors at the same school made. "No one buys a quarter-inch drill bit," Ted Levitt told his students, "they buy a quarter inch hole."

I was reminded of all this by a story in today's Wall Street Journal. Despite reporting a quarterly loss of $4.4 billion, Blackberry's stock price went up 15.5% yesterday.

Why? Because the CEO promised that the company would redirect its attention from designing and manufacturing smartphones to developing the software and services on which they run.

In fact, I had lunch with a friend yesterday who sheepishly pulled a Blackberry out of his pocket. "I'm only using this," he said, "because my IT people won't let me use anything else. They say other networks aren't secure."

He's a lawyer and one of millions of professionals and business people who don't buy wireless phones simply to make calls or check email, but primarily to ensure their communications are secure. That's what they were hiring Blackberry to do.

But then the company wandered away from that job to follow some flashy new things that seemed popular, sending sales (and its stock price) into freefall. Its stock price has started recovering because smart investors believe the company has seen the error of its ways.

One of the PR department's biggest responsibilities is to help senior management stay in touch with the job customers hire the company to do. 


PR in 2014

2014The new year always builds on the last. So what can we predict about 2014 as 2013 swings to a close?

Here are my choices for the trends of 2013 that will most influence the practice of public relations in the new year.

1. Content marketing. This really comes in two flavors -- owned media and what's been called native advertising.

Owned media is basically a channel that companies control completely, from url to content, such as a web site or a brand app.

The big news here is that owned media is becoming less promotional and more entertaining or informative in its own right. A good example is Coca-Cola's corporate web site, which as of this writing leads with an amusing animated film featuring the polar bears that appear in the company's advertising. You could easily spend an hour on the site without spotting a news release.

Among branded web apps, Kraft's iFood is a terrific source for recipes and food tips. Audi's iPhone driving challenge is strictly entertaining unless you click on the ever-present Audi logo to go to the company web site. 

Native advertising is sponsored content that appears on someone else's web site, e.g., Forbes' or BuzzFeed. It too is non-promotional but service-oriented, imparting information or entertainment that is loosely connected to the company or brand, though its sponsorship is clear.

The best native advertising exists at the intersection of the brand's competencies and readers' interests. Instead of selling the brand, it seeks to "buy" customers by giving them something they might enjoy or find useful.

A good example is American Express' Open Forum, which brings small business owners together to share learnings on a range of topics. A decidedly less didactic example is a recent BuzzFeed posting of "The 12 Cats Of Chrismahanukwanzakah." It features cute photographs of cats and kittens in holiday settings, all taken with Samsung's new Galaxy smartphone. Cat photos on the Internet? How could it miss?

2. Big Data. Forget global warming. An even more imminent threat is the digital exhaust that accompanies every turn we make in our hyperconnected world.

Whether surfing the web, watching TV, reading an e-book, carrying a mobile phone, swiping a credit card, or using the growing number of everyday things plugged into the Internet, consumers leave a digital trail of their habits, preferences, associations, and even aspirations. All of which presents problems and opportunities for PR practitioners.

The problem is as clear as the headlines. People aren't too worked up by Edward Snowden's revelations about the NSA. But wait until they discover what Google and Walmart know about their daily habits. Smart companies are already reviewing their privacy policies and ensuring that they meet industry best practices.

And because someone will always try to push the envelope on the strictest policies, the best PR practitioners are partnering with company lawyers and marketers to ensure everyone understands the spirit, as well as the letter of the law, regarding the collection, distribution, and use of customer information.

The opportunity for PR practitioners is to mine customer information to develop greater insight into their needs, values and aspirations, as well as to uncover the best way to engage them as individually as possible.

To date, PR people have used data mining primarily to monitor what is being said about clients in the blogosphere and to modulate their response to trending attacks and crises. A few companies have taken the next step of using customer data to better target their messages. Merck, for example, uses Weather Channel data in scheduling instore promotions for products ranging from sun tan lotion to allergy medications. 

But no one, to my knowledge, has knitted the available strands of customer data into the fabric of new offers. That is the real promise of Big Data and I expect someone will realize it in 2014. But there is little question that PR people need to acquire industrial-grade data analytic skills to stay on top of the practice.

3. Finally, public relations' center of gravity is shifting dramatically. 

In terms of classical philosophy, PR has always been about rhetoric. Going back as far as Edward Bernays, PR people have traditionally come largely from the ranks of journalism. Though the best PR people have had the benefit of psychological and sociological insights, their primary product was publicity and promotion. Pushing stories.

Beginning with the social upheaval of the 1960s and peaking during the corporate scandals of recent years, PR has been increasingly about politics in a generic sense of stakeholder relations. Sometimes, and not always to the the practice's credit, that has led to the adoption of political techniques such as grassroots organizing and poll-testing messages. The primary goal has been persuasion or, failing that, redirection.

But the confluence of digital technologies, media fragmentation, and consumer power has led to the practice of public relations as ethics. Not in the school-marmy sense of being the "company conscience," but in the deeper meaning of helping an institution find and keep its higher purpose based on a shared understanding of its values, beliefs, and mission. 

That is the theme of a new model developed by the Arthur W. Page Society, a professional association of the world's leading corporate communications officers. 

My greatest wish for 2014 is that trends 1 and 2 are guided by trend 3. 

Ethical PR questions

Soap with vitaminsToday's papers include two "news you can use" stories: experts say people should avoid (1) multivitamins and (2) anti-bacterial hand soap.

Not using either, I was less interested in the specifics of these stories than in the ethical implications for PR people who labor in the vineyards of the companies involved.

What is a PR person's ethical obligation when issues of safety are raised by credible experts?

Clearly, the first obligation is tell the truth. To me, that means to give customers substantially all the information they need to make an intelligent decision. And not wait to be asked.

It appears that none of the companies manufacturing anti-bacterial hand soap wanted to comment on concerns raised by the Food and Drug Administration about antibacterial hand soaps.

But as luck would have it, two trade associations were a bit more forthcoming. The American Cleaning Institute  and the Personal Care Products Council issued a joint statement that essentially said:

  • We're perplexed the FDA is raising these concerns because we've given it plenty of  data showing that anti-bacterial soap kills more germs than simple hand-washing.
  • Furthermore, we plan to give them even more data showing that anti-bacterial soap is safe and doesn't contribute to antibiotic or antibacterial resistance.
  • Having said all that, we applaud the FDA for moving their review forward and we expect eventual approval of these products.

Not surprisingly, no multivitamin manufacturer cared to respond to a medical journal editorial questioning the safety and usefulness of mutivitamins. But as luck would have it again, another trade association was available. The Natural Products Association issued a statement that essentially said:

  • This editorial is "overblown." We never said multi-vitamins cure chronic disease or death. They're intended to address nutrient deficiencies.
  • The studies cited in the editorial itself attest to the safety of muli-vitamins and some even demonstrated health benefits.
  • We're baffled.

Now, none of this amounted to outright lying. After all, the jury is still out on the safety and efficacy of using anti-bacterial soap or swallowing multi-vitamins. And just because some experts raise questions, we should not presume guilt.

However, it does raise a couple of questions:

  • Should companies delegate their response to a third party? I don' think that constitutes giving consumers the information they need to make an intelligent decision. I recognize that no company wants its name associated with questions like these. But consumers deserve to hear directly from the companies in which they have placed their trust, especially on questions of safety.
  • At what point are questions so serious that a company should stop selling a product? I don't think either product category has reached that point yet. But effective PR counsel should have a clear idea of the "red line" a company can't ethically cross.

For example, putting antibiotics in animal feed to spur growth has been suspected of contributing to anti-bacterial drug resistance in humans for more than 40 years. But the Food and Drug Administration didn't issue voluntary guidelines until this year.

The Chicken Council and the Meat Institute applauded the voluntary nature of the guidelines. But as far as I know only one actual manufacturer had anything to say about them. Zoetis issued a news release supporting the guidelines and pledging its compliance.

I'm not an epidemiologist so I don't know when -- or even if -- the red line on animal feed antibiotics was crossed . But by any measure, Zoetis' forthright adoption of the standards was an ethically correct decision.


Three-dimensional thinking

EscherWe live in a three-dimensional world (four if you count time), yet much of our thinking is two-dimensional. That's partly because so many consultants use two-by-two matrices to show relationships between different factors.

I've gotten into the act myself over the years. Recently, I suggested that trust is a function of rational and emotional factors, most specifically people's feelings of affinity and judgments of competence.

Drivers of Trust.011

I stand by that theory but it occurs to me that the context within which this happens matters enough to warrant the addition of a third dimension.

Trust remains theoretical until it meets the job that people want done. That job can be functional, emotional, or social. Every job has meaning, but some have higher significance to people than others. For example, for some people, a drink that contributes to their sense of identity has higher meaning than one that simply quenches their thirst. 

Meaning and trustA brand's higher purpose occupies the quadrant of a three-dimensional model where its recognized competencies are applied to a meaningful job people really care about. 

Market leaders have figured out how they can make a difference in people's lives. It is their higher purpose -- the reason they're in business, beyond making money. 

Higher purpose doesn't have to be high-minded, but it does have to be deeply rooted in an understanding of people's needs, values, and aspirations within a company's areas of competency.

Determining a brand's higher purpose is not a job for the company wordsmiths. A brand's higher purpose defines its very business strategy. It needs to permeate every function, system, and operation.

But the organization most associated with managing stakeholder relationships and articulating the company's values is often best positioned to help lead such a definitional effort, integrating different perspectives across the C-Suite. And helping to ensure that the brand's higher purpose reflects that fourth dimension -- time -- as people's needs, values, and aspirations change. 



Spinning and PhotoShopping

Santalist'Tis the season when jolly Saint Nick compiles a list of who's been naughty and who's been nice.

So a word or two about communication ethics might be in order.

At the top of the naughtiness list is lying.

Sadly, it's such a common offense it has been given its own euphemistic sobriquet -- "spinning." One online political publication even sponsors a weekly contest to see who can best exticate the horribleness from a horrible story, e.g., "How to handle a Congressman's coke bust" or "How to say 'sorry' to Sarah Palin."

But there's another kind of lying that is even more insidious. It distorts how people see reality, including themselves. And it's even more prevalent than political spinning. 

I'm talking about the surgical use of PhotoShop to create a standard of beauty that could never exist in the real world. 

Tumblr_mgy8i33akg1s405ijo1_250For example, the editors of Canada's Flare magazine don't think Jennifer Lawrence is pretty enough for their cover. Her hairline is too high. Her neck is too short. Her hips are too wide. And she has fat arms.


Ms. Lawrence -- whose beauty doesn't need PhotoShop enhancement -- should be offended. Sadly, she is not the real victim. Nor are the countless other celebrities whose photos are manipulated to meet some editor's unrealistic standards.

GQ magazine's editors incurred Kate Winslet's wrath when it plastered a super-slimmed-down version of her on its cover –  “I don’t look like that,” she said, “and I don’t desire to look like that.” 


More recently, one of the young stars of ABC Family’s hit show "Pretty Little Liars" took to Twitter to bash her own network for using a heavily Photoshopped image of her and her co-stars. 


But the real victims are the millions of young people who unconsciously adopt such an unattainable standard of beauty. 

PR people should ask themselves whether or not they have been collaborators in the construction of this fantasy world.



Reputational fussbudgetry

Lucy_Brown_PR_help_5c_cartoonGoldman Sachs promoted “reputational risk” to proxy-level attention five years ago.

To many, the beleaguered firm had little choice; to others, it was a publicity stunt. To still others, it was just corporate fusbudgetry, much ado about little.

Consider, for example, a recent book by Yale law professor Jonathan R. Macey. In The Death of Corporate Reputation: How Integrity Has Been Destroyed on Wall Street he argues that, “Reputation is no longer an asset in which it is rational to invest.”

Putting a new twist on “too big to fail,” he contends some firms are simply so “important” that what customers think of them is irrelevant. They have no choice but to do business with them. According to Macey, Goldman Sachs is one of those companies. (He cites other financial powerhouses as well, but let’s go with the most visible corporate piñata when he was writing the book.)

Macey reminds us that Goldman has coughed up more than $550 million to settle SEC charges it misled investors and another $330 million to settle Federal Reserve charges of foreclosure abuses.

With all this, the firm actually defended itself in court by arguing its claims of honesty and integrity are mere “puffery” that “no one should take seriously.”

Yet Goldman still makes tons of money. As Macey writes, “By all objective measures, the firm is doing great.” And by all the precepts of the “greed is good” school of economics that should be enough.

Ironically, Macey traces the destruction of Wall Street integrity to the very thing that was supposed to guarantee it – government regulation.  He believes reputation and regulation are substitutes for each other and inversely related. As regulation increases, the importance of reputation decreases.

His thinking goes something like this: if no one is looking over a banker’s shoulder to ensure he isn’t fleecing you, you have no choice but to find a bank with a solid reputation for honesty. But when regulators appear to guarantee one bank is as honest as another, developing a reputation for honesty simply isn’t worth it anymore.

According to Macey, that’s precisely where we find ourselves. Financial markets are regulated every which way but well. Firms don’t feel the need to invest in their reputations because they’re highly regulated, but the regulation is hopelessly inefficient and ineffective. So we have the worse of both worlds.

Macey’s contention that “regulation causes a decline in companies’ incentives to invest in their reputation” might apply in a world populated solely by homo economicus. But in the real world, people’s motivations and behavior can’t be reduced to an economic formula.

Behavioral science has shown that, in economic terms, we are fairly irrational. We value gains and losses differently. Most of us are more likely to undergo an operation if told there is a 90% chance of success than if told there is a 10% chance of failure, even though they are statistically the same. We’re more likely to accept facts we agree with than those we don’t. In fact, we’re more likely to ignore or misinterpret information that is inconsistent with what we believe. And what we think other people think about a company (i.e., its reputation) springs more from our gut than from our brain.

Goldman seems to recognize that fact. It has not repudiated the Wall Street mantra that “greed is good.” But it is trying to get closer to the ideal of being “long-term greedy,” meaning it will pass up short-term profits if they come at the cost of long-term relationships.

The firm is putting its managers through daylong training sessions to drive that point home. It made managing reputation risk part of every manager’s performance evaluation and bonus treatment. It is also investing its treasure and energy in causes at the intersection of its competencies and society’s needs.

And according to the Chronicle of Philanthropy, Goldman increased charitable giving to more than $240 million in 2012, equivalent to 4% of its pre-tax profits. 

It is doing all this despite the introduction of still more regulation, which is exactly opposite what Macey would predict. In fact, it renders moot his recommendation to make companies invest in their reputations by deregulating financial services.

Goldman seems to realize reputation is a second-hand phenomenon that, over the long-term, reflects how a company behaves in every aspect of its business, even the parts regulators aren’t watching. How it treats its employees. The value of its products and services. And whether it shares its customers’ cares and aspirations.

Most of all, people can sense whether a company is trying to build an enduring relationship with them or use them as human ATM machines. 

C-suite executives get it. When Deloitte Touche Tomatsu asked what keeps them awake at night, hits to their corporate reputations were their number one concern. Every company’s operating flexibility depends on its ability to navigate an environment dominated by forces it can’t directly control. More than ever, they must operate by persuasion. The longest lever of persuasion is reputation, and the best way to get it is to deserve it.  

That’s not fusbudgetry. It’s dollars and cents. 

Thinking is doing

Bubble-machine-306x-1351785298The hardest part of developing a thought leadership program is not figuring out what to talk about. It's deciding how to put words into action. Otherwise, you're just blowing bubbles.

Finding a topic is relatively easy. It's simply a matter of drawing Venn diagrams with stakeholders' concerns in one circle, the company's competencies in another, and its values, purpose, and long-term interests in the third.

Your topic will be wherever the three circles overlap. 

Any good speechwriter can get you there. But that's barely 10% of the job. 

Putting those words into meaningful action to build credibility and affinity is the hard part. 

Citing the villains of the day as good examples in this regard is dangerous. J.P. Morgan, for example, seems to pile up billions in additional fines and penalties with every news cycle. And many still consider Goldman Sachs a "great vampire squid wrapped around the face of humanity." 

Yet both companies are investing their treasure and energy -- in addition to their thoughts -- in causes at the intersection of their competencies and society's needs.

J.P. Morgan, for example, will reportedly "focus its charitable giving on areas that have more to do with its own businesses." Yesterday, it announced plans to spend $225 million to help close the gap between job seekers' skills and open positions in key American and European cities. “The biggest need of all is to grow the economy and grow the jobs,” the company's CEO said in announcing the program. 

For its part, Goldman Sachs is spending $500 million to give financial and consulting assistance to small businesses in the U.S. and female entrepreneurs in the developing world.  And the firm has sharply increased loans and investments in low-income neighborhoods to about $1 billion a year, earning a top rating of “outstanding” from regulators for its commitment to underserved communities. 

Both efforts appear to be more than the reflexive response to a spate of bad press.

Neither company's CEO is silver-tongued, as they have both demonstrated on more than one occasion. But they're both very smart, capable of deep thoughts.

And they know the surest route to thought leadership is doing.

What CEOs can learn from the Pope

Time-person-of-the-year-cover-pope-francisTime's editor says the magazine selected Pope Francis as its "Person of the Year," because "he placed himself at the very center of the central conversations of our time: about wealth and poverty, fairness and justice, transparency, modernity, globalization, the role of women, the nature of marriage, the temptations of power."

CEOs are not religious leaders (unless you consider capitalism a matter of faith), but they can take a lesson from the Pope when it comes to thought leadership.

Thought leaders drive the conversation on topics that are within their areas of competence and central to their stakeholders' needs, desires, and aspirations.

For the Pope, that's a wide swath of the human experience. But it's interesting how much is also relevant to business leaders.

  • Wealth and poverty determine market growth.
  • Fairness and justice are central to everything from business governance to market development.
  • Transparency is non-negotiable in an era of social media and customer-created content.
  • Modernity and globalization go hand in hand. Sometimes uneasily.
  • Gay marriage and women's role in business are the iceberg's tip of family issues affecting a company's ability to attract and keep the best talent.
  • The temptations of power have been the motivating factors in some of the worse corporate abuses and crimes of recent years.

Smart business leaders are focusing their message on just those issues. More tomorrow.


PR lessons between the lines

BetweenTheLines-200x200Sometimes the best PR lessons are between the lines in the day's biggest stories.

Consider two stories that currently have the media aflutter -- the handshake Obama gave Raoul Castro at Nelson Mandela's memorial service and Mary Barra's appointment as CEO of General Motors.

1.  The handshake: sometimes a handshake is just a handshake -- an exercise of good manners. Nevertheless, the media is engaged in permanent handshake-watch, waiting for the president to clasp hands with someone unusual, whether villain, opponent, or celebrity fresh from rehab.  

Castro qualifies on two counts. Plus, he comes with an audience guaranteed to be enraged by any perceived sign of respect -- or worse, reconciliation. Never mind that what President Obama said immediately after the handshake can only be interpreted as a less than oblique rebuke for leaders like Castro who "claim solidarity with Madiba's struggle for freedom, but do not tolerate dissent from their own people." 

Lesson: symbols speak louder than whatever words follow them.

2. Mary Barra: in terms of significance for GM, the fact that she's a career auto executive, rather than an outsider like the previous two CEOs, is arguably more meaningful. But her gender understandably gets more attention because it makes her a "first," which is on newsiness par with "new," "free," and "violent."

Lesson: the media have hot buttons like all of us, though their's are more obvious and consistent.  

3. GM's finance division: the third PR lesson was buried in coverage of lesser GM news. It promoted its CFO to company president. As it happens, he had just written a piece for the Wall Street Journal's "CFO Journal" blog. 

"A central objective of the finance team is to help drive better business decisions," he wrote. "To do this we need to bring high quality information and insights to the table."

Lesson: isn't that what every PR organization should strive to do? PR people should be the source for actionable information and insights on customers, employees, and other stakeholders. 

Corollary: that will require a shift from advocacy techniques, exemplied by the first two lessons in this posting, to the more strategic task of gathering and sharing intelligence on the world in which clients operate.


Amazon's PR coup

Amazon 60 minThe media is still hyperventilating about Amazon's supposed plan to deliver packages by drone, as "revealed" on "60 Minutes" a week ago.

It was the highlight of a warehouse-to-secret-lab tour CEO Jeff Bezos gave Charlie Rose. The drones became the focus of Rose's enthusiastic attention and spawned follow-up stories in other media throughout the following week.

That drew praise in some circles as a brilliant "PR move" for putting a spotlight on Amazon at the height of the holiday shopping season and the day before Cyber Monday. That was almost certainly Amazon's intention. And they may have snagged the placement of the year.

But by the company's own admission, the delivery drones are several years off, assuming they can overcome technical challenges and navigate a thicket of regulatory issues.

Of much closer import -- in fact, running around Amazon's warehouses now -- are robots the company has deployed to fulfill customer orders. In its third quarter financial report, Amazon disclosed it has already deployed 1,400  robots in just three of its warehouses.

But there wasn't a robot in sight in the "60 Minutes" story, despite their potential to cut Amazon's fulfillment costs by 20% to 40%. Nor was there any mention of the implications for Amazon's warehouse workers.  

Furthermore, there's some indication Amazon was less motivated by raising its already high profile in time for the holiday buying season than in countering a book by Businessweek reporter Brad Stone. The Everything Store: Jeff Bezos and the Age of Amazon portrays Bezos as a ruthless tyrant and a "penny-pinching ballbuster," as Gawker put it. 

To its credit, Amazon sells the book in all formats and even offers the standard discounts, though it did print negative reviews by some employees, its head of PR, and the CEO's wife. It's entirely possible that offering Rose an "exclusive" to get him to do one his fawning interviews for "60 Minutes" was part of a plan to retore some of the company's luster. 

More significantly, it shows just how far "60 Minutes" has strayed from  news to entertainment. I can remember when "'60 Minutes' is on the phone," were words that would throw terror into a media relations person's heart. But the toughest question Rose asked was why a book on Buddhism and Zen is resting next to Mrs. Potato Head on the warehouse shelves. 

Having suffered five-alarm burns from "60 Minutes" during my AT&T career, I can't believe I'm saying this, but in the long run none of this is good news for PR people. 

Companies that are dedicated to transparency and authenticity are ill served when competitors for customer attention can pull one over on journalists, as Amazon appears to have done in this case. 


Authentically phony

Fake WatchesI took this photo in a small shop on one of the Greek isles years ago. 

I was reminded of it recently because "authenticity" has become such a buzzword in PR circles. It has already morphed from means to goal in many people's minds.

The Founder of Lululemon reached new heights of authenticity when he essentially told customers they shouldn't buy his company's yoga pants if their thighs touch. He was being painfully honest. Also a bit chauvinistic and a lot stupid. But it probably didn't do his customer relationships much good.

In Can't Buy Me Like, Bob Garfiled suggests authenticity is "the currency of the new relationship era." But like all currency, from dollars to bitcoins, it's only worth what it can buy.

As Garfield goes on to explain, in this new era, customers' expectations have changed. They care "not only about goods and services, but about the values and conduct of the providers."

Being authentic means being true to your ideals, but that only works if you have the right ideals in the first place. The right ideals are those that reflect your customers' needs, values, and aspirations. 

Lululemon's Founder fell short of the mark on that score. He is the walking equivalent of an authentic fake watch. 


Suzy Welch on PR

Suzy welchI first met Suzy Welch when she was editor of the Harvard Business Review. Since then, she has gone on to marry Jack Welch and, perhaps not completely unrelated, to write some best-selling business books.

Earlier this week, I caught up with her again at a PR industry meeting. Unlike most paid speakers, she did not appear to give a canned speech. She didn't clain any real expertise in PR, though her instincts are clearly good and she did touch on two topics worth passing along.

First, on crisis management, she offered a perspective that I would put somewhere after Phase 0, risk assessment, and in the early stages of Phase 1, identifying the situation as a crisis.

She said a PR counselor's key job is to get in front of the crisis, which she interpreted as warning senior executives of four things:

  1. The crisis will be worse than they expect. No one should minimize it.
  2. There are no secrets. If something can explode, it will; get ahead of it.
  3. We will be portrayed in the worse possible light. Get over it.
  4. There will be blood on the floor. We'd better decide how we're going to spill that blood with the most dignity. (And, I suppose, whose blood it will be.)

I'm not sure these four points are inviolable, but they've applied in almost all the crises I've had to manage.

Second, on CEO attitudes toward PR, she said what bothered them most is PR people who don't understand business -- i.e., the real drivers of value, the company's competitive situation, and what keeps the CEO awake at night.

She said that the best PR counselors share the perspective and know-how of their peers in human resources, finance, and strategy, in addition to professional communications skills. That too rang true to me, though I would add marketing and public policy.

But the key idea is sound: a company's top PR counselor needs to be a business person, not simply a scribe. Just as the Chief Counsel's role at the boardroom table is not limited to questions of law, the chief communications officer should amplify his or her functional skills with keen business savvy. 

Welch doesn't pretend to be a PR person, but she'd make an excellent counselor.

Thought leadership

Thought leadershipYesterday, in a widely reported speech, President Obama said the last three years of his presidency will focus on reducing income inequality.

Not surprisingly, opponents came out of the woodwork to attack both the president's motives ("He's trying to distract people from their frustration with Obamacare.") and his proposed solutions ("They promote government reliance rather than economic mobility.") Such is the state of politics today.

A fact-based discussion on the merits of specific proposals, such as raising the minimum wage, is perfectly legitimate. But tossing bromides around accomplishes nothing.

There shouldn't be any question that the issue itself needs to be addressed. And business leaders need to be on the front lines, doing just that.

By coincidence, yesterday, the trade publication PR Week sponsored a "summit" on "thought leadership" that drew a packed crowd of corporate PR people. The timing couldn't have been better.

"Thought leadership" is one of those business buzz words that has as many definitions as practitioners.

Basically, it means establishing someone as an authority on a public issue of long-term importance to the company or brand. Ideally, a thought leader expresses a point of view that changes how people think and act on an issue.

At yesterday's "summit," Starbucks' Howard Schultz and Honeywell's David Cote were offered as  examples of thought leaders who "stuck their neck out" on such issues. There are others, but far fewer than there used to be.

PR leaders need to convince their CEOs to engage in issues of long-term consequence to their business. And there is no issue of greater importance than income inequality.

Research shows that income and wealth gaps have never been greater. The consquences flow through company bottom lines in the form of lower revenue growth, less qualified employees, and lower levels of trust. The long-term consequence is sure to be decades of social unrest that will make Occupy Wall Street look like an academic seminar. 

If there's ever been an issue that needs business thought leadership, this is it. 


Burson on PR (Part 2)

Burson 2Yesterday, I posted a few words on Harold Burson's definition of public relations.

Everyone seems to have his or her own definition. Some people even suggest it's more profitable to let a thousand flowers bloom than to try to pin down the definitive definition.

But when one of the pioneers of the profession offers his thoughts, it's worth noting. So I was thrilled when Harold offered some additional context in an email.

He added what he called one "nit," pointing out that he considers PR an applied social science. I've already corrected my original posting to reflect that addition. But the significance of planting PR in the realm of applied social science is worth considering.

As Harold put it, PR "is an amalgam of behavioral psychology, cultural anthropology, sociology, history and geography.The net/net is that the objective of public relations is persuasion, whether it's to want someone to sign up with AT&T rather than  Verizon, vacation in Greece rather than Brazil, elect Candidate A over Candidate B.  Nor is it a modern addition to the behavioral landscape: people unknowingly practiced public relations (using clubs or spears) while they still lived in caves.  I believe it is endemic to the life cycle."

So if you know someone studying PR in college, make sure their course load includes a heavy dose of those disciplines (save club and spear-wielding). They'll learn how to write news releases (if there still are such things) when they graduate. 


Burson on PR

BursonI attended PR Week's 15th anniversary dinner last night, largely because they were honoring my former boss, Marilyn Laurie, along with five other PR luminaries. 

It turned out to be  more fun and more instructive than I anticipated. 

The evening's organizers wisely opted to skip the traditional acceptance speeches in favor of a brief panel discussion. That saved a lot of time, but even better it provided a note of spontaneity these evenings seldom have.

For example, the moderator started the discussion by asking each of the honorees to define PR. I was especially taken by Harold Burson's definition.

"PR is an applied social science," he said, "focused on two things: behavior and communications." The big problem these days, he went on to say, is that we spend too much time on communication and not enough on behavior, and that's why the public distrusts our institutions so much.

Harold, the legendary founder of Burson Marsteller, is 92. But his mind is as quick as it ever was. And he's an old hand at these kinds of events. He's received 10 of these lifetime achievement awards so far.

When I looked around the room and realized he was one of the few people I recognized, it made me feel old. But it also made me feel luckly to know him. His remarks last night just reinforced the feeling.