Force For Good Communications

How can Facebook and JP Morgan win back your trust?

It wasn't supposed to happen this way.

Facebook launched perhaps the most anticipated IPO ever and instead of the moonshot many expected, it fizzled like a rocket from North Korea--and has since completely imploded. First, Facebook executives made a decision shortly before the IPO launched to increase the number of shares floated, greatly increasing the odds that demand wouldn't keep up and the share price would fall. Then, the big day came. The stock price initially went up by about 10 percent, as individual investors finally got their chance to buy a piece of the dream, but within hours the share price was plummeting. As Facebook stock continued to sink on its second and third day, allegations arose that Facebook insiders (and execs at Morgan Stanley, the underwriter of the IPO) had revised revenues projections downward but didn't inform the market at large. Now the SEC is investigating and the inevitable investor lawsuits have been filed. The prospect of a protracted legal battle has become a thick cloud hanging over Facebook the Stock, a discouraging prospects that will continue to dampen enthusiasm in the investment for some time to come.

Meanwhile, J.P. Morgan has become the poster child for a new chant from the Occupy Wall Street crowd: "We told you so." Just when you thought the Big Banks had been chastened by the near collapse of the world financial markets followed by massive bailouts of those deemed "too big to fail," JPM announces a multi-billion-dollar loss from speculative trades in risky derivatives, the same stupidity that led to the financial meltdown in the first place. The so called "London Whale" trades undermined JPM CEO Jamie Dimon's case that banks should be freed from Dodd-Frank regulations enacted following the bank bailouts. Dimon went from the financial industry's most persuasive advocate to being perceived as the very embodiment of the "Bankster" the Occupy crowds would like to burn at the stake.

So what can Facebook and Morgan do to win back your trust? That's the subject for my next few posts. Your ideas welcome!

-Jon Harmon

Goldman won't regain public trust with Wall of Secrecy

What do companies need to do and say to win back pubic trust?

Jordan Kimmel of Trust Across America posed that question to me this week on his radio program on Voice America. Here's the link to listen to the interview.

Jordan asked me about winning back trust after a crisis and about my experience in the Ford-Firestone mess that is the basis for my book, FEEDING FRENZY. And we talked about the turmoil inside Goldman Sachs after former executive Greg Smith took quite a public parting shot in the form of an op-ed in the New York Times. (Smith's piece has since led to a global torrent of negative press and opinion against Goldman and its brand of "pirate capitalism.")

Goldman CEO Lloyd Blankfein

I pointed out that the heart of Smith's accusations against Goldman's corporate culture is the violation of customer trust, of putting profit ahead of customer interest. But even worse, I noted, is a bigger cloud hanging over Goldman, the violation of public trust. It's now clear that Goldman played a key role in the financial crisis that precipitated the global Great Recession, especially in regard to the clever packaging of derivatives built around shaky subprime mortgage disguised as AAA-rated investments.

The American public is incredibly forgiving when the leaders of an organization express remorse and a sincere commitment to change behavior for the better. But contriteness is not the message coming out of Goldman.

Furthermore, in today's world, transparency is an essential element of corporate social responsibility. Goldman's corporate culture is built on impenetrable secrecy. And there's little reason to expect the curtain to be lifted any time soon.

It's only March, but put Goldman Sachs down as an early contender for Force for Good's 2012 PR Disaster of the Year.

- Jon Harmon

High-integrity communication can be a Force for Good; FFG joins Trust Across America

Happy and proud to announce that the Force for Good blog has been invited to join a growing chorus of voices advocating for trust-worthy corporate behavior and, subsequently, increased public trust in worthy corporations. Here's the link.

Trust Across America is a fantastic collaboration dedicated to such principles as corporate integrity, transparency and sustainability. So Force for Good is a natural addition, as it was founded in 2006 on THIS: Transparency, Honesty, Integrity and Social Responsibility.

Think of Trust Across America as a sort of inverse adjunct to the Occupy Wall Street movement (without the drum-beating and vagrancy). If all companies lived up to these ideals, and their trust-worthy behavior was effectively communicated to the public at large, a whole lot of Occupy activists could go home happy (and, presumably, more productive).

Hope to have more to say about Trust Across America in the coming weeks and months.

- Jon Harmon

When should you ignore the lawyers and apologize?

When is an apology helpful? When might an apology prove damaging?

A PR pro who is aiming to repair damage to trust and reputation will likely give you different answers to these questions than a lawyer aiming to limit liability. In many, if not most cases, reputation trumps liability. It’s better to sincerely apologize and attempt to move forward in restoring trust in your organization than to stubbornly remain silent. Losing in the court of public opinion can prove more damaging than losing in a court of law. And refusing to apologize may even prove harmful in the courtroom, perhaps leading an unsympathetic judge or jury to pile on punitive damages to what they see as an unrepentant offender.

Keeping this in mind, I offer the following two-question test to help you decide when an apology is in order, courtesy of Eric Zorn in today’s Chicago Tribune. (Zorn brings up the subject because of criticism Republican presidential candidates have directed at President Obama following his apology to the people of Afghanistan for the inadvertent burning of some copies of the Koran. Regardless of your own political views, Zorn’s simple test is helpful to the corporate communicator deciding whether to push back against the lawyers and recommend a public apology be extended.)

1. Did you (or those who represent you or answer to you) do or say something that caused discomfort, or worse, to others?
2. Would you undo this act if you could?

A “yes” to both of these questions indicates an apology is almost surely in order. Note that the harmful act need not have been deliberate; and if it was indeed unintentional, you clearly should mention that fact in your apology.

Note also that your social responsibility, if not your legal accountability, often extends beyond your own company and its employees—your dealers and even your suppliers may be considered part of your extended organization in the eyes of the public. A socially responsible company holds its dealers and suppliers to the same ethical standards it follows itself.

Finally, Zorn reminds his readers not to offer one of those mealy-mouthed non-apologies that includes caveats like “… if anyone was offended” or is written in a non-accountable passive voice: “mistakes were made.”

And finally I offer these Force for Good posts from the past on the still-pertinent issue of the apology:
When is an emotional apology just too much?

When is an apology a better response than trying to argue the merits of your behavior?

How long do you have to be sorry?

-Jon Harmon

Is brand what we want it to be, or what others say it is?

I posted my thoughts on the meaning of "reputation" and "brand" on the Corporate Communications and Reputation group at LinkedIn, which sparked an interesting flow of ideas and perspective:

Nick Taylor • Reputation is made up of three dimensions, and is, essentially, the “intellectual capital” of an organisation (i.e., not the book value). The first dimension is identity – what we present ourselves as. This is typically what a brand is about (logos, values, positioning). The second dimension is image, which is almost the reverse, the opposite. It is what stakeholders see and feel from their perspective. The third dimension is personality. This is the reality of the brand seen through actions, not words, and is a real contributor to brand perception and overall reputation. So brand is an element of intellectual capital.

Jerry Thompson • Brand is the promise of value defined and offered to an organization's stakeholders. Reputation is awareness and understanding – by those stakeholders – of how well that promise is being kept, based on actions taken by the organization each and every day.

Martin Liptrot • I agree with Jerry. The brand is the promise; reputation is how well you are perceived to be living up to it. The other key difference is about ownership – while brand is tightly governed and controlled from the centre out, in the corporate voice, consistent iconography, etc. – reputation is subjective and truly in the eye of the beholder. It is possible to have a great reputation with consumers and analysts but a rotten one with community and employees, for example. That is the bit that senior executives sometimes struggle with; it isn’t a linear relationship.

Jon Harmon • Interesting comments, gentlemen.

But I'm not sure I would still assert that brand is what we say it is. More and more, brand is what those "out there" say it is; reputation, of course, always has been determined by "the others."

Today, a myriad of conversations, in social media as well as in "real life," determine the texture and shape of brand. (I'm thinking more of product brand or corporate brand than one's personal "brand," but the principle is the same.) When the branding put out by a company does not square with the branding determined by the social conversation, the dissonance can render the company's efforts ineffectual and wasted or, worse, counter-productive. And when the failed branding becomes the butt of jokes or scorned as intentionally deceptive, the company's reputation takes a hit as well.

Reputation comes before brand. But what does that mean?

Okay, so we all agree that "reputation is a winning company's greatest asset," right? That makes it pretty darn important.

But what exactly do we mean by reputation? And how does it differ from brand?

These are crucial questions – the two words are central to the professions of communications and marketing, yet there seems to be widespread disagreement on what reputation and brand really mean.

I generally love Wikipedia but this isn’t helpful:

Reputation, as distinct from image, is the process and the effect of transmission of a target image. To be more precise, we call reputation transmission a communication of an evaluation without the specification of the evaluator, if not for a group attribution, and only in the default sense.

Got that?

This is how I would begin:

Reputation is the audience filter that comes before consideration – of purchase, investment, recommendation, or employment. A positive reputation opens the door to consideration; a negative reputation can slam it shut.

Brand is all about identity and connotation, but it has no power to drive action without reputational “permission.”

Advertising pioneer David Ogilvy (who would’ve turned 100 a few months ago), made this simple and brilliant distinction:

“Brand is the promise that an organization makes. Reputation is whether it lives up to that promise”. (Thanks to Mike Hatcliffe’s blog for that.)

Other useful definitions:

“Reputation is (corporate) culture seen from the outside.” – Alan Towers, TowersGroup Inc

Reputation is “how much a community trusts you.” – Stackoverflow

If there is any doubt of reputation’s primacy before brand, consider this pithy command to the marketer by Richard Branson, founder of Virgin Airways and someone who knows a bit about branding:

“Build brands not around products but around reputation.”

And finally, on the notion of “building your own personal brand” as distinct from your reputation:

You build reputation by silently doing, proving and acting on everything you said you were going to do while building your brand. If your brand is … that you know what the hell you’re talking about, your reputation is the proof that you do. – Lisa Barone, Outspoken Media

Silence worsened sordid Penn State scandal--2011 PR Disaster of the Year

The real tragedy of the scandal at Penn State is that so many of Jerry Sandusky's alleged acts of predatory sexual abuse over the years could have been prevented if university officials had not tried to keep it quiet. Hoping to avoid an ugly incident, their silence led to arguably the worst scandal in American sports history ... and made for an easy choice for the Force for Good's 2011 PR Disaster of the Year.

Time and again, the lasting impact of a crisis is made worse by those first on the scene hoping to sweep it under the rug. How many times have you you heard, "The coverup was worse than the crime?"

Bold prediction: this won't be the last time a scandal is made far worse by embarrassed officials trying to make it all go away. Don't let it happen at your company. Work with senior leadership to develop a rigorous crisis management plan built around smart, proactive crisis communications to all stakeholders.

Click here for five years of truly memorable recipients of FFG's PR Disaster of the Year.

- Jon Harmon

Few employees are truly engaged or know the strategy; Great internal communication sets winning companies apart

In a hyper-competitive world and in a weak economy, companies need fully engaged employees who understand and buy into the corporate strategy. So there's a shockingly huge opportunity at most companies in America today:

• A 2009 Gallup study found only 28% of employees at large companies describe themselves as fully engaged in their work; 54% say they are not engaged and 18% say they're "actively disengaged." (Accompanying graphic courtesy of Gallup Management Journal, Sept. 2010)

• "Only 37% of employees have a clear understanding of what their organization is trying to do and why. Just one in five employees are enthusiastic about their organization's and teams goals." -- You Can't NOT Communicate², by David Grossman

Fortunately, Grossman's latest book is an incredibly useful tool for business leaders and communicators who want to increase employee engagement and alignment. Clear, compelling, purposeful communication can make a huge difference in the workplace. 

Grossman makes the case for the greatness: "Good internal communication gets the message out, but great internal communication helps employees connect the dots between the overarching business strategy and their individual roles. When it's good, it informs; when it's great, it engages employees and moves them to action." (p. 17)

The book itself models many of Grossman's principles for effective communication--it's short and easy-to-follow with simple, bulleted copy and lots of illustrations. Each chapter has practical tips, questions for self-reflection and specific actions to implement. It amounts to a comprehensive, self-guided business school course, beginning with the fundamentals (that ought to be obvious but will be of benefit to just about everyone) and including "Advanced Communication Mastery" for those ready to take the fundamentals "to the next level." Grossman makes even this graduate level material easy to understand, but warns that it will take courage to put into practice. "What courageous conversation might you need to have today," he asks, "and how can you develop your communications skills to prepare?"

Disclosure: David Grossman is a friend and someone I admire.

-- Jon Harmon