Force For Good Communications

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-- Jon Harmon

Transparency at work: Zuckerberg opens up; Facebook rebounds (a bit)

Back on June 1, I argued here that Facebook's CEO Mark Zuckerberg needed to lead an effort toward greater transparency in conducting the newly public business of the social network behemoth. Two weeks after its epically hyped IPO, Facebook had plunged 28% from its opening price of $38 to reach a new low of $27.50.

I had no pretensions of Zuckerberg noticing my advice, let alone heeding it, even though there were plenty of other voices calling for more business transparency from Facebook. And indeed, the famously maverick young founder of the company continued to keep a fairly low profile. Facebook continued to be vague in detailing its plans to monetize its enormous base of "friends" and failed to provide guidance on future revenue projections. When he did speak, Zuckerberg reminded us that Facebook's mission was never to simply make money but to "give people the power to share and make the world more open and connected."

Having a well-articulated, noble and inspiring mission is critical for encouraging an active and participative employee culture geared to execute corporate strategies. Shareholders can likewise be inspired by the vision. But they also want some guidance to help them figure out if their invested dollars are wisely held in the company, or should be put somewhere else.

(And BTW, employees also want to be reassured that the business has a sustainable trajectory of profitable growth. In short, every stakeholder wants to invest in, work for, do business with...winning companies. "Winning" encompasses all aspects of reputation including social responsibility as well
as, yes, profitable growth.)

Throughout the summer, Facebook stock continued its downward trend, dropping below $18, less than half of its initial price four months earlier. That will get your attention, no matter how maverick you are.

Finally, this week at a tech conference in San Francisco, Zuckerberg let it be know that the company's profit performance was indeed important to management. As John Shinal wrote for MarketWatch:

Now that Zuckerberg has seen the damage that the stock drop has done to the image of his company — not to mention to the morale of employees with restricted stock grants — he’s on board with the whole profit thing.

Today, Facebook closed at $22 -- up a cool 25% from its low 10 days ago. There's still a long ways to go before Day One investors recoup their investment. But it's a good start.

So, yes, transparency is critical for all stakeholders, including (especially) employees. And that includes detailing efforts being made to ensure sustainable, profitable growth.

- 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

For once, Hollywood portrays PR guy positively

The public relations profession doesn’t often get portrayed favorably in Hollywood productions, but a truly “force for good” PR guy plays a key supporting role in the otherwise forgettable Will Smith action movie Hancock.

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Jason Bateman plays sincere and big-hearted PR consultant Ray Embry, who has a vision for a global campaign of branded corporate social responsibility. Trouble is none of the big corporate clients he pitches are receptive to his plan to forsake part of their profits to help save the world while earning the right to include an “All-Heart” logo on their products and advertisements.  

 

Early on in the movie, in a pharmaceutical company's boardroom, Embry is introduced to company executives as “the Bono of PR” but he demurs, pointing out that “Bono is the Bono of PR.” (I took that as a complement to Bono – for being the very definition of a catalyst for global philanthropy and CSR – but those who view PR as whitewash may it as a “highly welcome swipe at Bono.”)

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Most of the movie deals with Embry working with Smith’s super-hero character Hancock to help him win over the public by transforming his image. In other films, the PR guy would be shown aiming to gloss over Hancock’s flaws and make him out to be someone he isn’t. But here Embry gets real with his client, telling Hancock that after a thorough analysis of the underlying reasons for the superhero’s poor public image, Embry has concluded that Hancock is, frankly, “an ***hole.” He then guides Hancock through a series of steps to reform his behavior, leading to an improved public image.

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Oh yeah, and there's a love triangle situation and quite a bit of violence and flying around. But that's not the point of this post.

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Even in a lousy movie, it’s refreshing to see “force for good” public relations portrayed as laudable, high-minded and results-oriented.

 

- Jon Harmon 

Seller Beware: The Stories of Your Company Are About More Than Pushing Product

(Disclosure: The publisher of the book referenced in this post sent me the book so I might review it here. I have not received or expect any further consideration.)

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“One of my first assignments as a newly hired 22-year-old reporter for Ford Motor Company’s employee newspaper was to interview a senior vice president for a story about a new business venture. As I entered the svp’s office, he sized me up and soon made it clear through his demeanor and body language that he was insulted that someone so young and inexperienced had been assigned to interview him.

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“So what did I do? I skipped over the customary introductory pleasantries and politely yet firmly asked him a very tough but pertinent question. In this way, I immediately established my credentials as an intelligent communications professional who had done his homework and was up to the challenge.

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Then I gave him my rapt attention and followed up with another probing question. The svp’s manner quickly changed. We had a productive interview and, when it was over, he said he would be pleased to make his people available to further flesh out the story.”

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I used this anecdote recently to make a point with one of my younger managers – that we p.r. people need to prove our value to the operations to win a seat at their table. We do that through serious preparation, business acumen and perceptive thinking.   

 

Telling this story helped me make the point. And story-telling can help communications of all sorts resonate with intended audiences. 

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As the narrative of successful mass communications changes to include more story-telling and less a reliance on the shouting out of key messages, the sales and marketing arms of the corporation see a natural alliance with public relations. That point of convergence is in many ways a high-water mark for "integrated communications" but also a potential hazard in the continued evolution of aspirational public relations.

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Screen-writer Richard Maxwell and media-trainer Robert Dickman tread rather clumsily on this delicate balance in THE ELEMENTS OF PERSUASION: Use STORYTELLING to PITCH BETTER, SELL FASTER & WIN MORE BUSINESS. That sub-title (as well as the hyper-capitalization) gives away the authors' inclination to view PR as merely an important sales tool.

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Successful, aspirational public relations is indeed truly integrated into the objectives of a corporation's marketing and sales teams, cuing up large numbers of favorably dispositioned potential customers to the top of the  purchase funnel. But public relations is also integrated fully into the company's business strategy development and, of course, into the process of driving internal culture forward through employee engagement. Story-telling can and should be part of the full gamut of successful public relations.

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“Stories are facts wrapped in emotion,” the authors say, explaining the power in stories as well as their universal appeal. “All humans are story-tellers.”

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Fundamental to the success of the communications practice is to mine for stories that provide color and texture around the facts and numbers found in 10-Ks and sales reports, and then to tell them vividly in as few words as possible. The story of a company’s contributions to society, the stories that define its brands and products and the stories lived out of by the people who make up the company – all help define the essence of the company’s reputation.

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Just remember it shouldn’t all be hard sell.

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-  Jon Harmon

Whole Foods' CEO Throws Ethics Out Window, Where is the Media and Blog Outrage?

The anonymous postings of Whole Foods CEO John Mackey slamming a smaller competitor, Wild Oats, as reported in the Wall Street Journal, have certainly been the fodder of much media and blog discussion the last two days. The basic facts of the matter are not in dispute -- Mackey admits on the Whole Foods news site to years of venomous posting against Wild Oats under the pseudonym "rahodeb." He says he did it because "I had fun doing it," and that he "never intended any of those postings to be identified as me." To that last point we can be sure -- he never intended to be exposed.

But something is missing from all the coverage to date. Neither media nor the blogs have jumped into the story with the same fervor they would have if say, the CEO of Exxon or Wal-Mart had done the anonymous attacks. Here's the story as reported by ABC News. Obligatory comments from experts criticizing the lack of transparency to be sure, but it's all downplayed as "not exactly new news" considering such past ethical violations as the Wal-Mart-Edelman flog.

Where was Diane Sawyer asking Mackey if he planned to resign as she asked the President of Virginia Tech the morning after the VT massacre? 

That Mackey's behavior was irresponsible is without a doubt. Whether it was also criminal is a key issue: Mackey deliberately used his anonymous attacks to hurt his competitor, and likely to drive down its stock price in advance of Whole Foods' attempted takeover of Wild Oats. That's worse than shady behavior.

So why haven't journalists and bloggers rushed to condemn this unethical behavior? Why has Mackey's lame excuse -- that it was harmless prankish behavior -- played without criticism.? Don't you think the "Wal-Marting across America" flog was pretty tame by comparison?

The kid gloves treatment Mackey has received to date is clearly a case of media archetyping. Whole Foods has been a poster child for good behavior -- entrepreneurial company, organic food, environmental social responsibility, etc. This type of company plays the "good guy" in archetypical reporting, both in the media and in the blogosphere.

There is so much to genuinely like about Whole Foods. But the serious ethical (even if they don't prove to be technically criminal) violations of its CEO should not be swept under the rug. There should be a blog storm calling for his resignation whether or not the FTC (or SEC) seeks criminal charges against him.

So let's get it rolling. John Mackey needs to resign or be fired. Period.   

- Jon Harmon

Wal-Mart Grows Up

Wal-Mart is determined to improve its battered public reputation. Putting aside the much-debated "flogging" missteps, Wal-Mart has undertaken a series of actions designed to position the giant retailer as a socially responsible leader.

This past fall, Wal-Mart announced - first in Florida, then in a total of 15 states - that it would sell hundreds of generic drugs for just $4 a prescription. With rising health care costs a huge concern nationally, Wal-Mart's news generated strongly favorable media coverage, helping to enhance its reputation, particularly among the elderly and others on fixed incomes. Call that shoring up your traditional base of support (if you insist on using political campaign language ).

But Wal-Mart also has reached out to its critics and to potential new customers who might otherwise shun the discount retailer through a concerted "green" effort. CEO Lee Scott is a committed environmentalist who is determined to take actions to address issues of land, water and air pollution as well as the single largest environmental issue: global warming. He also is fully committed to financial results and to showing that the imperatives of social responsibility and business success need not be at odds with one another.

Scott's pledges to eliminate 30% of the energy used in Wal-Mart stores and to reduce solid waste from U.S. stores by 25% in three years have not assuaged the critics. Wal-Mart Watch is closely tracking progress on these and other environmental promises and well they should. Clearly the company needs to back up its public commitments.

Wal-Mart has an even more ambitious goal for 2007: to sell 100 million energy-efficient compact fluorescent light bulbs. The bulbs last much longer and use far less energy than conventional incandescent bulbs. Wal-Mart says that over the life of the 100 million bulbs, customers would save $3 billion in electrical costs while reducing greenhouse gas emissions by 20 million metric tons (much of the electricity produced globally is generated at coal-fired power plants producing millions of tons of greenhouse gas emissions that contribute to global warming). 

Only a company the size of Wal-Mart could commit to such an audacious goal: 100 million sales of the strange-looking bulbs (which are about eight times as expensive as regular light bulbs) would represent a 50% increase in industry sales of compact fluorescents.

"The environment,"  Scott told the New York Times, "is begging for the Wal-Mart business model."

That's the talk of a leader. It's clear that Wal-Mart is growing up. The folksy, home-spun company that Sam Walton founded in in 1962 in Bentonville, Ark., for years operated in a style that was very much in sync with its small-town customers. With its stunning success came growing pains. It took far too long for Wal-Mart leadership to understand that its small-time attitude toward PR was a poor fit for large-scale reputational battles. A subsequent hunker-down mentality only emboldened Wal-Mart's many critics.

"We would put up the sandbags and get out the machine guns," Scott told Fortune Magazine last July.

Now Wal-Mart and its lead PR agency Edelman stress engagement -- with customers and critics alike. That's smart PR, and flogging aside, will pay off in the long run. But like any solid reputational strategy, Wal-Mart's talk is backed by solid actions. For Wal-Mart, that means stepping up to the mantle of leadership. Waking up to the enormous positive impact it can have on vexing social issues, the world's second-largest company is finally getting comfortable in its over-sized clothes.

- Jon Harmon