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

Social media backlash spurs BoA to reverse course on debit card fee

A furious social media backlash helped convince Bank of America to reverse its unpopular decision to charge customers a monthly fee for using their debit cards.

The anti-Big Bank sentiment that is driving the Occupy Wall Street protests accentuated the consumer hue and cry, and BoA CEO's tone-deaf comments provided plenty of opportunity for derision.

"We have a right to make a profit," CEO Brian Moynihan, said infamously. While a perfectly reasonable statement in normal times, these are hardly normal times and the comment struck a discordant note with those hurt by the Great Recession. BoA received a taxpayer bailout to the tune of $45 billion, plus a "loan-loss back-stop" of $97 billion, according to CNN. Home-owners with upside-down mortgages and unemployed/underemployed workers haven't been as fortunate and quite predictably were put off by Moynihan's line.

As reported by the Chicago Tribune's Phil Rosenthal:

"The 'right to make a profit' comment triggered a great deal of negative sentiment," wrote James Purchase of Attensity (a company selling social media analytic software). On-line comments mimicked Moynihan, "'I have the right to bank elsewhere,' and 'Yes, but no more than I have the right to a job.' The most negative sentiment was around 'excessive profits,' 'high fees' and 'bailout.'"

BoA's experience is a cautionary tale for business failing to keep abreast of consumer sentiment being expressed in social media. You can learn a lot by listening. And if what you're hearing sounds severely at odds with a climate conducive to a business decision you're about to make, it's time to revisit the decision.

BTW - BoA's stock dropped when it announced the new debit card fees (investors apparently being more in tune with public sentiment than Moynihan and company), it fell again when Moynihan dug in his heals, and it further sank yesterday when the company rescinded the decision (losing more than the overall market on a very down day). The BoA incident is in line to receive serious consideration for Force for Good's 2011 PR Disaster of the Year.

- Jon Harmon

Real lessons in crisis management: Olive Garden recovers nicely from anti-flag flap

After an initial misstep, Olive Garden corporate has recovered well and looks to be putting an unwelcome controversy behind it.

Yesterday, news broke that an Olive Garden restaurant in Oxford, Alabama, had refused to allow a Kiwanis Club to include their American flag at a banquet there. Eighty-year-old Kiwanis Club member Marti Warren was outraged, “This is not my country. This is not my country I grew up with,” she said. “I was so angry. I felt like I had been slapped in the face.”

Unfortunately, Olive Garden's first response to the flag flap was weak and only made matters worse. The restaurant chain released a statement aiming to explain away the controversy. After noting that "like all Americans we have nothing but the utmost respect and admiration for the American flag and everything it symbolizes," the company then offered this ham-handed explanation that, predictably enough, only fanned the flames: "To be fair to everyone and avoid disrupting the dining experience for all other guests, [the Oxford restaurant is] unable to accommodate flags or banners of any type in the dining room."

Remember that crisis management is not about winning an argument debate-style. It's about winning over hearts and minds. Cold, hard facts often don't effectively counter emotional complaints. And how is this for emotional imagery on the side of the aggrieved Kiwanis: Without a flag at the Kiwanis banquet, Warren said she asked club members to close their eyes and picture the flag waving in the wind as they said the pledge of allegiance.

Soon the internet was abuzz with boycott threats. Conservative-leaning bloggers were quick to impugn the restaurant's motives in excluding the Star and Stripes. "Far-left Olive Garden," began one report.

But today is a new day and more seasoned PR pros evidently won out at Olive Garden corporate.

Olive Garden SVP Bill Holmes called Warren yesterday to personally apologize and promised to fly down to Alabama first thing Monday to personally apologize to the Kiwanis Club. Olive garden also revised its statement, with an apology (and not just the "we're sorry if anyone was offended by our innocent action..." apology all too common these days; see my earlier posts here and here. And he agreed to return to Oxford Nov. 4 to speak at the next Kiwanis Club meeting.

Much better, Olive Garden. Marti Warren, for one, is satisfied. "I feel grateful of all the people who stood with me and that changes were made," she said.

- Jon Harmon

I wonder if Scott Pelley realizes how many times he says "I wonder"?

Irritating or endearing habit? Watch the CBS Evening News and count the number of times anchor Scott Pelley says "I wonder..."

It's quite a verbal tic for Pelley. And unlike the way he holds his chin, or clasps his pen or reading glasses, when the camera returns to him after a correspondent's story, for an on-cue poignant moment, it seems to be utterly unconscious.

In Pelley's otherwise excellent interview with Secretary of State Hillary Clinton last month, Pelley really outdid himself in wonderment, using the catch phrase four times, including in each of his first three questions:

Scott Pelley (CBS Evening News): Thank you, Madam Secretary. You are in close coordination with all of the European Union countries, and I wonder how much confidence you have that the European nations are going to be able to create a soft landing for their debt crisis that doesn’t wreck the economy here in the United States?

...

Scott Pelley (CBS Evening News): The stock market is terribly worried about Europe right now. I wonder what your confidence level is?

...

Scott Pelley (CBS Evening News): The Obama Administration has described Bashar al-Asad as illegitimate, and I wonder if it’s time for him to go?

While the CBS Evening News anchor role doesn't carry the same cultural clout as it did when Walter Cronkite or Dan Rather sat behind the desk, it's still important. Katie Couric certainly amped upped her gravitas when she stepped into the role after a 15-year run on the Today Show, but pulled it off admirably. Undeniably aware of the big shoes he has to fill, Pelley seems to be trying too hard to put a unique signature on the role. Whether the "I wonder" tic is intentional or not, it's getting old, Scott.

-- Jon Harmon

Sick of you: I hope I never hear another word about...Casey, Drew, Rod, who else?

I will be quite content to live out the rest of my life without hearing another word about:

Casey Anthony

Drew Peterson (unless Casey Anthony becomes his fifth wife; wouldn't that be a match made for life insurance!)

The Debt Ceiling

Tax increases

Rod Blagojevich

A-Rod

NFL and NBA lock-outs

Highway 405

Kate Gosselin

Lady Gaga

Oprah

Donald Trump

Julian Assange

Dominique Strauss-Kahn

...who else?

Restoration of Internet, cell service in Egypt would be sign populist revolution being accepted by government

The Mubarak government shut off all Internet access in the country early Friday morning (shut down made possible because of single Internet provider in Egypt unlike most countries). By Saturday, unconfirmed reports had some Internet transmission restored, although cell phone service is still out.

Like the images of protesters riding jubiliantly on tanks, the return of Internet and cell phone service could be a sign that powers within the government are siding with the populist uprising. With incredible pressure on Mubarak to resign, the world is watching to see how a power vaccuum may be filled. Transition government until national elections can be held? Will the people prevail pushing Egypt to emerge as a more democratic republic? Will radical fundamentalists seize power? How will the uprisings continue to spread throughout the Arab world?

- Jon Harmon

Popular discontent sweeps through Arab world despite crack-downs on social media

Watching the massive protests in Egypt live on Al Jazeera English is fascinating but disconcerting. By all accounts a genuine ground-swell of protest, with no identifiable leader.

What will be the outcome of this tsunami of disenchantment? 

Like Tunisia, where the government of President/dictator Zine al-Abidine Ben-ali was toppled two weeks ago, the insurrection seems to fueled by the economic and social discontent of young people.

And like the protests in Iran in 2009 over that country's rigged national election, social media has been a galvanizing force, even as the besieged leaders have tried to "turn off" Internet access and cell phone transmission. The images and the stories inevitably get out, and take on even greater meaning.

In Iran, the jubilant, youthful energy of the "Green party" protesters in 2009 did not lead to regime change. Indeed, "President'"Mahmoud Ahmadinejad continues to be recognized as the legitimate head of state nearly two years after the highly dubious elections. Will the apparent success of the Tunisian and Egyptian uprisings provide a new spark to the young populists in Iran?

And, what of the upheaval in Lebanon and Yemen? Will all this popular discontent lead to greater freedoms or provide an opportunity of instability for new fanatical regimes to seize power?

The world is watching. And thousands of on-the-spot images from cell phone cameras and other forms of citizen social media provide not only a fascinating window into the chaos but a galvanizing force as well.

- Jon Harmon 

How will US respond to its 'Sputnik moment' in clean technology?

 
Now is the 'Sputnik moment' for clean tech in the U.S., Energy Secretary Steven Chu declared in a speech at the National Press Club in Washington today.

The part of the Soviet Union is today being played by China (of course). China's clear lead in any number of clean energy technologies--advanced coal, nuclear, renewables, etc. is jarring. And the scale of China's investments in developing new technologies across the board in clean energy demonstrates a commitment to long-term leadership if not out-right domination.

Will the U.S. direct concerted policy to drive research and development in clean energy technologies that aren't currently affordable (unless you include unaccounted costs associated with oil dependency, energy insecurity and global climate change)?

Will U.S.-based companies combine creativity and perspiration, innovation and continuous improvement to move ahead of China, Inc.?

The fear and insecurity inspired by the little Sputnik satellite transformed into American will power to over-take the USSR in the race to the moon. Can we harness that same sense of urgency and national pride in a contemporary race with even bigger stakes? 

- Jon Harmon

 

 

 

Short takes: Crisis lessons. current events

Why won't he go away? BP lately has been doing many of the right things to restore its reputation in the wake of the oil leak from hell: quietly participating in Gulf restoration projects, maintaining admirable transparency with effective use of social media, and largely refraining from feeling sorry for itself in public. It will be a long, long road back. But at some point, maybe as soon as next year, BP may be able to turn the corner where there is more attention on what it is doing right then all the harm the company has caused. In the mean time, BP just has to do what's right and continue taking its lumps without complaint.

 

But that's exactly what BP's former CEO is NOT doing. Disgraced CEO Tony Hayward is back in the news in way of a BBC interview widely picked up in the states, wistfully remembering incredible moments of feeling sorry for himself, including when he was quoted wishing he could "have my life back." Note to Tony: you aren't helping! You were fortunate to be demoted to a meaningless job rather than being booted all together. Your main responsibility now is to stay quiet! (and, no, I'm not just upset because Hayward described the media onslaught during BP's crisis as a "feeding frenzy.")

 

Why won't he go away II: Promoting a book of his memoirs, President George W. Bush has reappeared in the news for the first time since the iinauguration of Barack Obama. The unpopular former President has every right, of course, to emerge to tell his side of things, but don't you think the Republican party is just glad he waited until after the elections to launch the book tour?

 

How to get some good news stories out during a crisis (continued from two previous posts): The continuing plight of the Carnival cruise ship adrift off the Pacific coast of Mexico showcases mostly effective crisis management.  The blizzard of coverage is a cruise company's worst nightmare, but Carnival is doing the right things to contain the damage: Steps taken right away to rescue the ship and ensure passengers are not in any danger; passengers immediately promised a full refund plus free cruise in the future; passengers kept as comfortable as possible; the CEO takes responsibility and is accessible to media.

 

As the ship is brought close enough to shore for passengers to use their cell phones, media inevitably feature harrowing tales of discomfort. Plenty of play especially to the tons of Spam inexplicably helicoptered in, along with Poptarts and other non-perishables. (Spam? Really?) But there has also been plenty of coverage on favorable comments passengers are making about the accommodating crew doing all they can and passengers intent of making the best of the situation.

- Jon Harmon