Force For Good Communications

Populist anger boils over on bonuses, but is a revolt brewing against business?

The public outcry against the AIG bonuses seems endemic of widespread and deep-seated resentment against Wall Street fat cats in general who "don't get it." 

Two questions: Is this the beginning of a class revolt? And who exactly defines what "it" is that "they" don't "get"?

Monica Langley's page-one WSJ piece provides useful perspective on how the rhetoric of the Obama Administration has changed recently. Having vilified Wall Street bankers and cheered on Congress in its outrageous anger-drunken response to the outrageous AIG bonuses (see previous post below), the Administration woke up to the realization that it needs Wall Street participation in the "public-private" partnership to buy up the toxic loans clogging the economy's arteries. 

So in a positive development, the Administration has persuaded Congress to slow walk the clearly un-Constitutional "seize the bonuses" bill and hopes to "channel" public anger to more useful ends. (Good luck channeling an angry mob.)

This whole episode was foreshadowed in October, shortly after "Joe the Plummer" helped make Obama's "spread the wealth around" comments a campaign issue. Obama responded to Republican attacks by accusing John McCain of spending too much time with "Joe the CEO." It proved to be an effective applause line. But the specter of a Presidential candidate villifying CEOs as a class was unsettling to those of us who believe that America's business -- small and large -- is the engine of prosperity and that its leaders are by no means all villains. 

The next day, Obama amended his punch line to accuse McCain of spending too much time with "Joe the hedge fund manager." That wasn't quite as rhythmic but it was a change you wanted to believe in. (No one feels any sympathy for hedge fund managers.)

But it remains to be seen if the public will make the distinction between business leaders and corporate raiders. Some see the seeds here for revolution. If the populist anger in this WRSGD turns against the haves as a whole, it could turn ugly.

I suspect that the American people are smarter than that. They want business leaders to be ethical and prudent, they want business to be transparent and honest, but I don't think they really want to put the brakes on capitalism.

However, the AIG anger bubble should serve as a wake-up call to PR folks with responsibility for financial communications. We're getting close to proxy season and annual meeting time. Get an early read on your top executives' compensation. If it's out of line with your company's performance and especially if the company had "involuntary terminations," you are going to have to ask some tough questions -- before news media and shareholders direct those same questions to your top execs. 

Let's end on a hopeful note (and I'll take up the question of who decides who "gets it" in my next post):

The nice, mini-rally on the NYSE the last two weeks has breathed a little life back into our 401ks and provided some hope that the market has bottomed and that this "bear market rally" might be the start of a long bull run, albeit with plenty of hiccups along the way.

Look for some of our economy's stronger businesses to begin acting like the sun might actually come up tomorrow, and make some investments in a future that will surely someday come, preparing to gain share in the recession's upslope. Look for more and more confident leaders to plan for a recovery, including putting in place a recovery plan they can pull the trigger on as soon as they see enough daylight ahead. If you're fortunate to work for such a company, start working on the communications components of that recovery plan.

Better days will come, maybe sooner than you think. You heard it here first.

- Jon Harmon  

Business killers at a time we need killer business: the WRSGD!!!

I was planning to write an optimistic post today, finding some measure of hopeful anticipation in the recent mini-rally on Wall Street and a number of positive economic numbers that came out the last two weeks. Hope and optimism, when based on a prudent business case, are contagious. And the irrepressible spirit of American innovation will win out sooner than later.

Things are indeed tough out there, but, really, the world is not coming to an end.

That post will have to wait until next week, assuming there are still some hopeful signs of a coming economic thaw after some lamentable actions by our political leaders. Call this post "What were they thinking: March 2009 edition."

• In a rare display of bi-partisanship, the U.S. Congress rushes to pass the "seize the AIG scoundrels' bonus" act yesterday, slapping a 90% tax retro-actively on bonuses to employees of any companies that received more than $5 billion in "bail-out" money. That includes capable people at such places as Wells Fargo and Goldman Sachs that didn't want the TARP money but were forced to take it by the Treasury Dept. so investors wouldn't be able to distinguish failing banks from the strong ones. Granted, no one in the Financial Products division of AIG should have received any bonus. But Congress' rash action doesn't bode well for business (aka, the engine that is going to get us out this economic rut).
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• Of course, all politics are local and it is not just the Federal government that has taken a stupid pill. Illinois Governor Pat Quinn, by all accounts an upstanding and high-integrity breath-of-fresh-air to former Governor Blagojevich, confirms that, in addition to some spending cuts, he wants to raise the state personal and business income tax by 50% !!! (personal income tax would jump from 3% to 4.5% and the state business tax from 4.8% to 7.2%) to balance Illinois' bloated budget. That's on top of a sales tax rate that exceeds 10% in the city of Chicago. Update: The Weekend WSJ brings a national spotlight to "The Taxin Illini" in this op-ed.

No one needs to remind us, again, that we are in the midst of the WRSGD ("Worst Recession since the Great Depression"). Can you think of two worse actions you could take at a time when we need to inspire confidence in our business leaders, investors, consumers and employees? Wait, don't answer that question. You might give our "leaders" some ideas.

- Jon Harmon

Crisis of confidence feeds on itself; a little poise can help hasten recovery

Everybody seems to be waking up to the same conclusion: the constant declarations about the historic severity of the current financial crisis are self-fulfilling.

Things are tough, worst recession since the Great Depression, we are told. So we stop buying houses or cars, vacations or fancy meals out, which leads to layoffs and even less spending as we fear for our jobs. And that brings further job cuts. 

Leaders in business and government can help ... or make it worse. It's time to quit focusing only on the crisis and start paying a little more attention to the signs of hope. Fear is contagious; so is hopefulness.

Certainly you'd expect optimism from the Obama Administration, aka "Team Hope."

Yet Obama and others in the Administration haven't tried to hide their enthusiasm for using the crisis to further ideological and policy objectives, as pointed out by Jonah Goldberg in his devastating op-ed, "Obama's Fear-mongering." Sec. of State Clinton talks about not letting a "good crisis go to waste," echoing sentiments voiced by Chief of Staff Rahm Emmanuel and Obama himself. Same for Speaker of the House Nancy Pelosi.

Democrats and Republicans alike should be careful about shamelessly exploiting an economic crisis that has brought considerable misery on the nation's voters.

On ABC's 20/20, John Stossel's investigation into the economic wisdom, or lack thereof, of the multiple bailouts began with the chorus of doom coming from leaders in both political parties. The daily reminder that the economy is spiraling downward has taken a predictable bite out of consumer confidence and set in motion a spiral of cut-backs by businesses, consumers, businesses again. Everyone, it seems, except our government is making do with less.

Peggy Noonan has her own take. Her op-ed in the weekend Wall Street Journal focuses on the "pandemic of fear" sweeping the country. "People are in a kind of suspended alarm," she writes, "waiting for the future to unspool and not expecting it to unspool happily." 

Here's my take on what this means to business communicators:

On the down-slope of a deep recession, all companies today are slashing costs and retrenching. They aren't investing in the future; they're in survival mode. Company leaders seem to be unable to get past wringing their hands and staring at the feet, as they mutter, "Must cut SG&A."

Eventually some bold CEOs will begin to plan for expansionary growth opportunities on the coming upside of the cycle. While continuing to keep costs in check, they'll capitalize on unique opportunities ahead to get a jump on their competition. Articulating a confident vision of profitable growth in the future, they will motivate and engage their employees, inspiring them to achieve great things. Confidence and hopefulness are indeed contagious.

A confident vision articulated in smart, proactive and creative communications to all stakeholders will help sharpen the corporate brand, engage employees who otherwise might be frozen in fear, drive sales and revenue growth, win influence with policymakers, and drive support from analysts and investors. Sharp, fully aligned and integrated communications can make the difference, distiguishing a company as a winner in a crowded market.

More on this in my next post.

- Jon Harmon 

O! What an ego, Oprah!

The Oprah Empire had a big announcement today. According to Diane Sawyer on Good Morning America, "for the first time in nine years, Oprah Winfrey is sharing the cover of her magazine with another person."

That's right, for the first time in its nine-year existence, O! magazine will not feature a glammed up photo of Oprah. This time it features a glammed up photo of Oprah with Michelle Obama.

Amazing. Think of the selflessness it took on Oprah's part to end a record streak like that.

Crisis management Putin-style

Strategic crisis management begins with an audit of potential crisis vulnerabilities, followed by preventive actions to reduce the liklihood of a crisis, and, finally, the development of a thorough crisis communication plan that is tested and periodically updated.

Unless you are a totalitarian regime, that is. Then you can skip most of that and just concentrate on repressing the public's reaction to the crisis.

Last April, Russia launched a national center for crisis management, formally called the National Crisis Management Center of the Ministry of the Russian Federation for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters, according to a United Nations press release. (The new Russian agency could be abbrevieted as an acronym even George Orwell wouldn't have believed: the NCMCMRFCDEECND.)

At that time, Russian Federation President Vladimir Putin declared that the Russian Federation was "fully engaged in cooperation with the United Nations" in its emergency relief coordination. The UN's press release noted:

This event illustrates current efforts by the international community to expand the network of coordination centers worldwide, enhance support to the coordination of emergency response actions and promote the exchange of information between humanitarian partners such as the Russian Ministry for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters.

But that was when the price of oil was approaching $150 a barrel. Russia is the world's second-largest oil producer, and the crash in oil prices has been devastating to the Russian economy. The tension is evident in the increasingly repressive actions of the Medvedev / Putin regime.

Putin is redeploying the concept of a national center for crisis management away from an alignment with the U.N. for global hot spots to a focus on the growing crisis at home. Former Soviet chess superstar Garry Kasparov, now the leader of the Other Russia coalition, provided this update in an op-ed in the March 5 Wall Street Journal: 

Russia is beefing up its federal security forces in order to violently repress public protests. Last month, for example, the regime created the "National Center of Crisis Management," which will deploy uniformed troops against "disturbances."

That's crisis management the old Soviet style.

- Jon Harmon 

Budget-conscious way to increase media exposure: Get quoted and Help A Reporter Out

Looking to get your company in the news more often? 

No, not for causing the next salmonella outbreak. You want to help your company get some positive recognition. Thought leadership on topical issues helps distinguish executives and companies with key publics.

But you don't have the budget for a PR agency to pitch for you.

Start small and increasingly aim higher. You begin by having an interesting or provocative point of view on an issue that people care about. (Have something to say.) This is different from shilling a new product offering. 

Once you have something to say, work hard at saying it in a way anyone can understand it. Write an op-ed for your local paper or your industry rag. Offer an exec up for a segment on local talk radio. You will quickly cultivate a list of reporters and producers who have space and time to fill who will take your calls and be glad they did. And maybe you can go national.

Ok, this does involve a fair amount of work and time. But perhaps worth it if you want to stand apart from your competition.

Meanwhile, here's a simple and free way to play in stories about your industry, assuming you are acccesible, nimble and can write clearly. It comes courtesy of technology blog Force of Good (not affiliated with Force for Good other than we share high ideals):

Sign up someone in your department (maybe you) with the free service Help a Reporter Out to receive frequent emails featuring a list of requests by journalists looking for a quick answer or quote that will help them advance or finish a story.

Make sure you respond quickly and only to requests in which your exec, company or product is a good fit for the journalist's inquiry. (Yes, you will be kicked off if you try to spin your way into a story you don't belong.)

You will be helping a reporter out while getting your company some free exposure. What's not to like about that?

- Jon Harmon