Economic Growth Fuels Business Reputations and Investor Confidence

Are you looking up, when you should be looking "down-under"? Let me explain. You know how the weather can change – cloudy one day, sunny the next? There are signs that Australia’s economy may have weathered the worst, but do not expect to hear the forecast call for a return to complete economic-recovery sunshine, just yet.

But it does appear the clouds are passing. There are hints of blue sky ahead. Here are some ways to tell. Business journalists get accomplished at reading between the lines...and so should you. Why? What you learn is of interest to your CEO. The economic weather "down under" is very much linked to worldwide economic conditions. In short, Australia's economic forecast is watched closely by U.S. business and investors, alike. What happens in Australia, does not stay in Australia. What happens is vital to America.

Question? Are economic experts beginning to use words to describe the economy of Australia, such as “bottoming, flattening, stabilizing?”

Answer: “Yes.” Are big real estate firms seeing any increase in sales in their residential business? According to Lend Lease: “Yes.” And how is consumer sentiment? That means, what are you thinking and feeling about the economy ahead?

The National Australia Business Bank monthly business survey shows improvement in its index of business conditions. Optimism is showing itself. But the economy does not go from cloudy to sunshine in one month. Bottoming is a process.

Still, any improvement is another sign that the process of moving from "totally cloudy" to "partly sunny" may be underway. Finally, here is an important indicator: the stock market. Stocks typically move up before other economic indicators.

After its March low, the market gained about 17 percent. Market participants reacted positively to what they see coming for Australia’s economy. That not only makes consumers "feel" better, but also industry, too, as balance sheets improve.

"Yes," the market may pullback. A pullback is actually a healthy thing after such a strong move up. As long as the March 9 low stays the low, then you now know that there are a number of positive hints about the economic conditions ahead.

And you now know that when the world, including America and Wall Street, sees conditions looking UP "down-under"...it's also anticipating an improving global forecast. Economies and investors are geographically connected.

Note to America: Look "down-under" to see if the economy is looking up. Not only that, communicate what you see throughout your organization.

Good economic weather does wonders for the reputation of and confidence in business, Wall Street and investments worldwide. Economic growth is superb public relations, works magic on corporate reputations and fuels stakeholder confidence.

Your CEO already knows this. So should you, your PR and marketing firms, and key stakeholders. Economic trends somewhere "else" are important, wherever you look.

U.S. business, if you don't know the story of Seabiscuit, you should. In fact, make it your business to learn. Because the story of how a single athlete energized a country reeling in a Great Depression may be the lesson for Wall Street in Mine That Bird's underdog, dramatic victory in the 2009 Kentucky Derby. In short, can history repeat itself?

From an unremarkable beginning, Seabiscuit proved an improbable champion, serving as a symbol of hope during America's Great Depression. A powerful, compelling figure. Rallying sports fans, yes, but also families and a nation, alike. Touching generations to come, including my grandfather, who went on to raise horses. It was not surprising that Laura Hillenbrand's book, "Seabiscuit: An American Legend," also a hit movie, touched new generations decades later.

Today, the world is mired in recession. Economists look for signs of a recovery. Wall Street traders, enjoying a spring rally, ask, "What would ignite a summer rally?"

Could a remarkable underdog story, a horse named Mine That Bird, who beat 50-to-1 odds, be that catalyst needed to spark our economic engine? Or at least carry part of the torch, emerging as a rallying symbol like Seabiscuit, along the way?

History provides lessons. Leaders see opportunities. Entrepreneurs turn passion into realized ideas such as the iPhone. It only takes one spark to light a fire.

Mine That Bird provided a spark for the ages. Did you catch the moment?

And is it something we can rally around? Don't bet against it.

Twitter is "Blogging for the Rest of Us"

Twitter announced it successfully defended itself against four waves of recent computer-attacks. A malicious worm tangled with the popular Social Marketing site...and lost. And, "No," that is not a reference to the Brooklyn teenager allegedly behind the technical shenanigans that posed significant, potential damage to the reputation of this growing technology firm.

It's also not the Twitter virus I planned to focus on. But breaking news happens, so I will use it to bridge to something your CEO may ask you...and something you should be ready to answer quite quickly. Question: "So, has Twitter really caught on, in a good, 'viral-marketing' way and can it help our firm?"

The short answer is, "Yes." Twitter can help your firm in ways still evolving, but certainly to include customer service, project management, employee communications, public relations and reputation leadership.

As with any new tool, Twitter is generating a cottage-industry of new acronyms, jargon and geek-speak (I say that with admiration). This article explains some of the tool's new language and ways, and does so in a gentle manner all of us can understand.

Don't let the jargon distract you.

Here's the bottom line: Twitter is "blogging for the rest of us."

What you are reading right now is called blogging. If you were on Twitter, you'd get this same "bottom line," but in 140 characters or less. My "message" would be brief, right to the point.

In a future blog, I'll suggest what I think are some of the immediate benefits of using Twitter for your company, whether you work for Wall Street, TV, a Fortune-500 firm or a small business. The business media are all over the company, including speculation on on its future; not a bad thing to attract attention because of your growing popularity.

Well...come to think of it...I'm already pointing out practical uses right now.

"Follow" me on Twitter to see. You can get my thinking seconds after I type. I'm found at SchwartzNow. My most recent thoughts are also on the right side of this blog.

Look, call it a micro-blog, "blogging for the rest of us" or Social Marketing. But Twitter is fast, easy to learn, and, right now, it's free. 

So take a few minutes, sign up, pick a user name and try it...before your CEO does.

Wall Street does not understand America's so-called "Defense" sector. That's a problem, especially with a new economic plan coming.

Here's the issue: Wall Street lumps firms such as Lockheed Martin (NYSE: LMT), Northrup Grumman (NYSE: NOC) and Raytheon (NYSE: RTN) into two words: Defense sector. The business media, including CNBC and CNN, adopt the lingo. Yet, these firms are far bigger than a two-word, Wall Street label. They do so much more. They pioneer programs benefiting earth and space science, information technology, energy and the environment. They are the stuff of "gee-whiz" value.

So, in a nutshell, this is a leadership moment. It is a time to revisit your "positioning" and reputation management. When your company is unable to position itself appropriately, it may fail a brand "promise." Failed brand promises can risk damaging relationships. With customers and employees. Why? For one reason, we may not fully understand you. Can I connect in a meaningful way with a company boxed in by narrow Wall Street jargon? Answer: I may not connect, and I may not invest. Plus, jargon is a difficult cage to be trapped in -- especially when it does not capture the true role these "Defense" firms bring society. And, really, jargon is difficult to like. Jargon is useful for insiders, but a burden to the rest of us. A put off. Wall Street's "Defense"-sector jargon is like walking into a brick wall. That's a bump in the face no one needs. I say, "Wall Street...take down that brick wall." Re-position how these firms are "labeled-sectored." Question: "Is your company positioned to attract the greatest value?"

When it comes to your firm's position in the marketplace, at hand is the possibility of increased credibility with key stakeholders. Put another way, you and I need clarity, not confusion, about a company's brand and operations. Right now, in our "Defense" sector, I see potential for confusion. These companies are also critical to global science solutions. But can they expand that conversation with us? Can they be both crystal clear on their vital defense services, yet not cause confusion about their large place in science, health, the environment and our lives? Absolutely. Positioning science can be difficult, but no one said that meaningful endeavors are easy. So, let's look at the clarity issue.

Look, enterprises such as Lockheed Martin represent far more than "Defense." Management, among the most sophisticated in the world, knows it. Employees know it. Customers know it. Reputation-management opportunities must be seized. That's called leadership. Just because Wall Street lumps you in the "Defense sector" is not a pass to ignore a compelling moment to position operations more fully. Shoot, did you know that some of these firm's are IT wizards in ways that would make Silicon Valley jealous?

I know, I know, it may be easier to default to key messaging these enterprises around "what they've always been," aerospace and defense. Why change now? One reason is credibility. Important roles, such as leading-edge science and environmentalism, might be missed, viewed as "in addition to" the traditional roles. Viewed as "we are missiles and rockets...but, yes, we are responsible, too." That, however, short-thrifts a larger picture. An opening for a global dialogue about your place in the future of our planet. Your role is huge. The dialogue about it is available. It's an opening for a new connection with "us." It's an imperative. This dialogue is not about segmenting messaging; it's about growing your messaging. And the words "Defense sector" are a swing-and-a-miss on your real role.

In Wall Street business terms, the problem is simple: how can the world's investors truly understand the future value of your firms if you are boxed into two words? Answer: they can't. And let's be blunt, the words "Defense sector" sound so "non-Green" -- on top of failing to capture your larger behavior in our society's future. You are leading-edge science, technology and climate-vital green.

The reality is that these firms pioneer some of the most advanced, climate-friendly environmental and science programs of our time. Want to know the world's carbon footprint over time? These are your go-to firms. I doubt the investing community knows that. So the time is now: these firms can energize a deeper, more overarching brand positioning strategy that includes "the rest of us." Hey, we're interested, anyway.

But how? They can start by communicating more about the benefits of their rocket launches, satellites and advanced technology in a cohesive-thrust to a larger message of science for the greater good. They can imagine what will excite the next generation. Will the story be, "We launch new rockets?" Or is it, "Join us and change the world?"

From now on, when you hear of these companies, picture satellites needed to monitor our environment and the "weather" in space. Imagine world-class scientists and engineers inventing clean technology so advanced that what they do in labs today...will be widely used by future generations. Think of exploring our atmosphere, near-Earth space environments and other planets. Tell me about collecting information important to climate forecasting and sound environmental policy-making, and used by marine, meteorological, aviation, power generation, agriculture and other interests. This is what the so-called "Defense sector" really does for main street. But you wouldn't know it from Wall Street.

It is time to embrace the reality that there are companies with exciting roles in shaping climate science, policies and practices...and we need to hear more from them.

I know that the breadth and depth of these firms is almost overwhelming. I understand how it can feel like too much for the lay public to grasp, much less its representatives. But I've worked with these companies, and earned support for their programs. The scope of these programs and expertise is out-of-this-Earth, literally. Which is exactly why people are hungry to know what these firms are doing and how our monies are spent. These firms employ what I call the "curiosity-driven." Put simply, if you can think of something neat and needed, they are probably already well into researching or doing "it."

Why not broaden the brand then and bring more people into the discussion? With that, I return to positioning and Wall Street. Is your firm positioned to attract the value you deserve? In short, are "Defense sector" firms whistling past potential investors because their overall market value is boxed in the old-school jargon of Wall Street and its ways of the past? My take: "Yes."

If so, why miss a leadership moment to step up your positioning? The world is hungry for business leadership. Employees, communities, elected officials, investors. We want it. This is the dialogue CNBC's Jane Wells started on the business program FastMoney after we compared thoughts.

Bottom Line:
The next time you hear the words "Defense Sector" -- stop in your tracks. Instead, picture:  "Science, Space, Earth, Environment." 

Whatever one thinks of "Defense" sector-policy decisions, know this: the firms in this sector's "basket" -- are in on our big challenges, collecting vital information and advancing solutions important to addressing societal issues valued by you, me and our children.

Find that positioning and passion about the "Defense sector" on Wall Street. You can't. Wall Street doesn't get it. In fact, Wall Street bundles many of the world-class companies in this sector in a single ETF (NYSE: ITA). Two words bundled in one basket.

From now on, when you hear those two words, experience four words: "Science, Space, Earth, Environment." Together, these words describe our future. A new economic plan will involve this future, these firms, their science. Take notice.

It's time for a "Science and Environment sector."

Next: Wall Street does not understand the "Utility Sector."

Your Fortune-500 company has news, a story to tell. Right now. The CEO wants the story told accurately...and first. After all, the first story to market has a higher probability of shaping other stories. The company news is legit, timely and of interest to key stakeholders.

So, why does the executive team decide not to "blast" the story to just about everyone on the planet in print and electronic journalism via subscription services like PR Newswire or BusinessWire? It's "what we've always done."

The answer:  Because there's a more effective way.

Why not allow a blogger to "break" the story, first, before the so-called "mainstream" media?

Industrial giants Budweiser (NYSE:BUD) and SABMiller (LON:SAB OTC:SBMRY) recently experienced this situation. With a surprising twist, as told by The Wall Street Journal.

Who blogs about your company, who "breaks" your news --and, importantly, who disseminates your competitor's news, first.

In short, have a strategic online communications plan. And I'm not talking about an obligatory web site. It's more than that and, with some planning, quite do-able by...tomorrow.

[Full Story...]

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	Yahoo! Buzz     DIGG THIS     GET RSS FEEDS              MSN Money Homepage MSN Money Investing   advertisement TODAY'S MOST POPULAR 1. Opinion: Obama's Media Army 2. Opinion: Hillary Hangs In 3. Ford Motor Turnaround Takes Hold 4. Mac Sales Boost Apple's Profit 5. Indiana Poses Challenge for Democrats MORE PEOPLE WHO READ THIS... Also read these stories:   People who like this also like...           'Liberty City Seven' Case Lives On16817942        Federal prosecutors said they will try a third time to convict six men accused of scheming...                      Heineken Taps Into Drinkers' Altruism16818071        Hoping to jump-start U.S. growth, Heineken Premium Light is launching an ad campaign with ...                      Pepper … and Salt16818743        Send reprint requests to prestochas@gmail.com                      Weight Gain Dogs Many Pills16818711        Prescription medications for many common problems can make you fat. Medicine may be to bla...                      Anheuser Posts Drop in Net16817771        Anheuser-Busch reported a 1.3% drop in quarterly net income amid lower-than-expected beer ...                                           NEW! Are you on Facebook? See what content on this site is popular with your friends! Learn more »         Your Facebook Friends Are Reading         Private Equity Sees Banks' Potential16791124        National City is getting $7 billion in capital from a group of investors led by Corsair Ca...                          Seen by 5 friends | 3 groups Popular with people in the groups: Investment Banking Facebook for UNICEF Stock Junkies                             | Harvard             ComScore Falls on Google Discrepancy16746988        Shares in research company comScore Inc. fell more than 8% in after-hours trading followin...                          Seen by 5 friends | 2 groups Popular with people in the groups: Facebook for UNICEF Investment Banking                             | Chicago             Money Could Sway Campaign Battle16790909        Campaign-finance reports raise questions about Clinton's ability to compete against Obama ...                          Seen by 6 friends | 2 groups Popular with people in the groups: Finance Club Facebook for UNICEF                             | San Francisco                              What's This?     [x] close          You're seeing a preview of SeenThis? — a Facebook application that helps you discover the latest news, videos and more by showing you what's popular with your friends — both on Facebook, and on sites like this one.   Have a Facebook account? Get recommendations for content popular with your friends by adding the SeenThis? app.   Once you've added it, look for the "Your Facebook Friends Are Reading" section in the sidebar with your name and photo above it (only you can see your photo.)   Click to add SeenThis? now »     About SeenThis? |    Privacy |    Feedback                              COMPANIES     Dow Jones, Reuters             Anheuser-Busch Cos. Inc. (BUD)                                               PRICE CHANGE 47.72 0.32 4/23             Grupo Casa Saba S.A. de C.V. ADS (SAB.JO)                                               PRICE CHANGE 34.34 0.59 4/23                             * At Market Close RELATED INDUSTRIES • Media & Marketing • Food & Tobacco Personalized Home Page Setup Put headlines on your homepage about the companies, industries and topics that interest you most. For All You Do, Bud,  This Blog Is About You Miller Site Specializes  In News on Its Rival;  The Scoop on Lime Beer By DAVID KESMODEL April 24, 2008; Page A1 MILWAUKEE -- Last month, beer reporter James Arndorfer broke a story that Anheuser-Busch Cos. was readying a new brew called Budweiser American Ale. Trade publications and Anheuser's hometown paper quickly chased the scoop. With his dispatch, Mr. Arndorfer beat the giant brewer's own publicity machine to the punch. Making the story more irritating for Anheuser-Busch: Mr. Arndorfer's beer-news site is owned by Bud's biggest rival. Mr. Arndorfer, 37 years old, is a full-time employee of Miller Brewing Co., the U.S. arm of SABMiller PLC. A former reporter for Advertising Age, he now runs Brew Blog, a free Web site dedicated to breaking news about beer. Especially news about Anheuser-Busch's beer. Brew Blog is the latest and perhaps most unlikely front in Miller's drive to rattle Anheuser. Mr. Arndorfer tracks the St. Louis company's every move, from earnings reports to management changes. He relishes revealing details of its products before Anheuser does. Though Mr. Arndorfer covers other brewers, he's "fixated on A-B," says Harry Schuhmacher, editor of Beer Business Daily, an online newsletter. Mr. Arndorfer responds: "They're the industry leader. And they've been making a lot of news." BREW NEWS   Below, excerpts from recent posts on the Brew Blog. New Budweiser Line Extension on Tap? Anheuser-Busch appears poised to roll out a craft-style line extension of its Budweiser brand. The brewer has received label approval from the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau for Budweiser American Ale. Bud American Ale has 5.1 percent alcohol by volume, according to label filings. A-B received approvals for 12-ounce bottles and three sizes of barrels (half, quarter and 1/6). Read more. * * * Budweiser Losing Distribution in Supermarkets In recent years, Budweiser has shown an uncanny ability to gain shelf space in supermarkets and convenience stores even as its sales decline. But performance finally appears to be catching up with Budweiser, at least in supermarkets. Read more. * * * Bud Light Lime Has More Carbs than Chill Anheuser-Busch appears to be betting it can take share from Miller Chill with a higher-carb, higher-calorie knockoff. Bud Light Lime, set to hit the market in May, has 116 calories and 8 grams of carbohydrates, according to label materials filed with the Treasury Department's Alcohol and Tobacco Tax and Trade Bureau. Read more. * * * Bud Takes Shots at Crafts, Lights, Imports In recent ads touting Budweiser as "The Great American Lager," Anheuser-Busch manages to take shots at crafts, imports and light beer -- even though A-B has positions in all those areas. In one ad, actor-comedian Rob Riggle explains to a woman in a bar that Bud is less heavy than an import yet has more taste than a light beer. Read more. The corporate marketing battlefield has long been strewn with pithy digs in ads and selective news leaks about others' business woes. But it's unusual for a company to go to the trouble of creating its own media arm to grind out news on the competition. While the site lets Miller tweak its famously tight-lipped rival, it also gives the company a platform to take a first crack at spinning industry news. "They are trying to aggressively go around the gatekeepers" in newsrooms and the trade press, says Stephen Quigley, an associate professor of public relations at Boston University. "It's something you couldn't do five years ago," before the proliferation of blogs. Anheuser declined to answer specific questions about Brew Blog or make an executive available for an interview. It wouldn't say whether it considers the site a concern. "Our focus is on our consumers and delivering great brands," Dave Peacock, Anheuser's vice president of marketing, said in a statement. Anheuser, which controls nearly 50% of the U.S. beer market, and Miller, with less than 20%, have been duking it out for decades. In the 1970s, some Anheuser employees wore "Miller Killers" T-shirts. Some Miller employees have come to refer to Anheuser as the Evil Empire. In 2004, Anheuser ran ads portraying Miller Lite as the "queen of carbs," prompting Miller to file a lawsuit. (The matter was settled out of court.) Lately, Miller has been running ads showing Dalmations, longtime Anheuser mascots, bolting from a barnful of Clydesdales and chasing down a Miller truck. The Beer Beat Brew Blog is the brainchild of Paul Pendergrass and Pete Marino, communications consultants for Miller who wanted the brewer to have more influence over what's covered in the industry. In 2006, they recruited Mr. Arndorfer from Advertising Age and told him to cover the sector like a beat reporter would. The site reaches mostly beer-industry professionals, Mr. Arndorfer says. It received about 24,000 visits in the month ending April 10 -- representing more than 12,000 individual visitors -- according to Miller's statistics. Users on Miller's computer network accounted for the most visits among corporations, with 1,675. Running second: Anheuser, with 1,540 visits. Messrs. Marino and Pendergrass say they've been gently needled about the blog by Anheuser executives at industry events. Anheuser public-relations officials have responded with pique to reporters' follow-ups to Brew Blog items. "You know that's put out by Miller, right?" an official told The Wall Street Journal. Miller isn't sneaky about Brew Blog. Its home page prominently states that the blog is "brought to you by the Miller Brewing Co." Mr. Arndorfer, a Milwaukee native, works in a spartan office adjacent to Miller's 150-year-old brewery. He spends his days calling industry sources, reading analyst reports and sifting through public records. In February, Mr. Arndorfer's industry sources were telling him that Anheuser was planning a lime-flavored version of Bud Light, the world's best-selling beer. He posted an article saying Anheuser appeared poised to roll out a knockoff of Miller Chill, a lime-and-salt-flavored brew launched by Miller last year. The scoop, chased by this and other publications, allowed Miller to paint Bud Light Lime as a "follower," says Nehl Horton, Miller's senior vice president for communications. Anheuser responded that it had begun considering such a brew in 2006, before Miller Chill came out. Mr. Arndorfer usually doesn't call Anheuser for that sort of comment. "I called them a couple of times a long time ago," he says. "I didn't hear back." In March, Mr. Arndorfer was rummaging through an online database when he noticed that Anheuser had received government approval for a Budweiser American Ale label. Breaking the news about the offering, he evoked recent Anheuser ads that disparaged ale-style craft brews. "It's somewhat ironic A-B would roll out a Bud ale given 'Great American Lager' ads for Bud take shots at 'heavy' and 'cloudy' beers." Rosy Coverage The same month, Brew Blog's coverage of Miller was rosy. One entry highlighted how Miller won four "hot brand" awards from trade journal Impact. Mr. Arndorfer says he doesn't avoid negative stories about Miller. He pointed to an October 2006 blog entry saying Miller CEO Tom Long was "dissatisfied" with Miller Lite sales, as well as a March 2007 report that the brewer was parting ways with a key ad agency. The blog has enough influence that a staffer at a PR agency for Anheuser pitched a story to Mr. Arndorfer about Budweiser's Superbowl ads. A representative for Tecate, a Mexican beer, inquired about running an ad on the site. Brew Blog doesn't take ads. Not so crazy about the blog is Mr. Schuhmacher, the editor and publisher of Beer Business Daily. Mr. Schuhmacher, who charges $440 a year for his publication, declines to say how many subscribers he has. "I tell Miller you're subsidizing a free publication, and it hurts the trade press," he says. "But they don't care." Mr. Schuhmacher became angry when Miller bought ads to run alongside Google searches for the keywords "Harry Schuhmacher" and "Beer Business Daily" to drive visitors to Brew Blog. The brewer took the ads down after he complained. Mr. Schuhmacher adds that he writes fewer positive pieces about Miller than he once did because he knows Brew Blog will always publish the same stories. On a recent evening, a Miller spokesman suggested he write about one of its newer brews, a lemonade-flavored wheat beer called Leinenkugel's Summer Shandy. "I said, 'You know what, give it to Brew Blog,'" Mr. Schuhmacher says. Write to David Kesmodel at david.kesmodel@wsj.com

Choosing a leadership position on an issue of societal importance has important benefits

Witness the dialogue stimulated and coverage earned by California's position on greenhouse gas pollution. Being a leader is not easy. There are inherent risks. Why not just play it safe? Yet, I believe people are hungry for leaders, and they are looking to you, the CEO, to be one.

Strategically, leaders stand out, attracting attention, stimulating dialogue and getting involved in shaping the public agenda.  Tactically, leaders earn support, admiration and media coverage. Successful leaders, like Pacific Gas and Electric's Peter Darbee, can seemingly come into the public eye from nowhere.  Rest assured, their conviction is not a path easily chosen. In full openness, I'm currently providing consulting services to support one of the company's initiatives.

Question: Are you missing a leadership opportunity?

I continue to find leadership refreshing and more strategically sound than "followership."

David Lazarus

The education of PG&E's Peter Darbee

David Lazarus

Wednesday, October 18, 2006

                                                 

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David Lazarus Lazarus At Large Archives Investors still a bit gun-shy 10/22/2006 Feds keep losing your data 10/20/2006 The education of PG&E's Peter Darbee 10/18/2006 Little matters of opinion 10/15/2006 Little matters of opinion 10/15/2006 They pay but deny any guilt 10/13/2006

Peter Darbee, now winding up his second year as chief exec of PG&E Corp., is a self-professed conservative and no great friend to progressive causes.

So he's as surprised as anyone to find himself emerging as a corporate leader in, of all things for an energy industry heavyweight, saving the planet from global warming.

"If you had asked me five years ago, this wouldn't have occurred to me," Darbee acknowledged in an interview. "Somewhere in this process (of becoming CEO), I developed a point of view."

That point of view, specifically, is this: "The Earth is warming. Mankind appears to be responsible. The need to take action is now."

And PG&E is indeed taking action. The company's San Francisco utility, Pacific Gas and Electric Co., now gets 12 percent of its power from non-hydroelectric renewable sources  --  wind, solar and geothermal. By the end of the year, Darbee said, that number should reach 14 percent, climbing to 20 percent by 2010.

Gov. Arnold Schwarzenegger last month signed into law a bill that requires each of California's three major utilities to reach the 20 percent renewable threshold by 2010. But PG&E is wasting no time in getting there.

Moreover, Darbee has become outspoken on the link between greenhouse gases and global warming, and is among the most prominent energy-industry execs calling for a nationwide cap on carbon-dioxide emissions. Power plants are the largest emitters of carbon dioxide.

"If the leaders of the energy industry don't take a responsible position on this topic," Darbee asked, "who will?"

It's a sign of PG&E's commitment to renewable energy that the utility announced the other day it's even signed a contract to buy natural gas made from California cow manure. The gas will generate enough electricity to power about 50,000 homes.

Welcome change

Environmental activists give Darbee credit for focusing PG&E on increased use of renewable energy and for becoming vocal on the need for businesses to take a more dynamic role in addressing the problem of climate change.

"What he's talking about is very welcome," said Carl Zichella, California regional director for the Sierra Club. "It's important to have business leaders of his caliber talking about this."

Not that PG&E and the Sierra Club are suddenly in bed together. Zichella said that if Darbee is really serious about safeguarding the environment, he'd also be looking to mothball the company's Diablo Canyon nuclear power plant.

PG&E is spending more than $700 million in ratepayer funds to refurbish the plant and keep it operational for at least another 20 years  --  even though it's run out of room for spent fuel rods and now intends to store them, at least temporarily, on a hillside overlooking the coastal facility.

"They could just as easily be spending that $700 million on renewables," Zichella said.

Inviting opinions

Darbee responds that nuclear energy, which accounts for about 20 percent of electricity generation nationwide, has its place if our primary goal is to reduce greenhouse-gas emissions.

"The threat of global warming is so significant," he said, "that many environmentalists who opposed nuclear energy now support it."

Darbee acknowledged that in his previous gig as PG&E's chief financial officer, global warming wasn't even on his radar screen. He was too busy shepherding the utility through bankruptcy proceedings and getting its balance sheet in order.

After he became CEO in January 2005, Darbee understood that he needed to broaden his horizons. But when it came to global warming, he wasn't sure what to think.

"I didn't have a sound basis for reaching a decision," Darbee said.

So, in typically methodical fashion, he called in a variety of experts from both sides of the global-warming debate and asked them to make their best case, pro or con.

Gradually, Darbee said, he began to be swayed by the experts who were arguing that greenhouse gases were having a profound impact on the planet and that far-reaching measures were required on industry's part to turn things around.

'Good conversation'

"I didn't feel too good about the people on the other side of this argument," he recalled. "I didn't think they presented good evidence. Ultimately, I found that the evidence is pretty compelling that the Earth is warming."

Stephen Schneider, a climate scientist at Stanford University, was among the experts Darbee met with. Schneider made the case for why global warming is an urgent problem requiring an unequivocal response from business leaders.

He told me he was pleasantly surprised to find that Darbee had asked a number of PG&E board members and technical people to attend the meeting, and that they were all well prepared for a substantial discussion of the issue.

"We had a very good conversation," Schneider said. "I thought their questions were honest and straightforward. They wanted a deep understanding of all the critical issues."

He termed Darbee's newfound leadership on global warming "big, big progress."

At the same time, the Sierra Club's Zichella says it's up to Darbee to go beyond just words. "Now he has to walk the walk," he said.

The Sierra Club, Zichella indicated, will be watching closely.

"PG&E is one of the largest investor-owned utilities in the United States," he observed. "What they do matters. If PG&E does the things Darbee is talking about, he's going to have a friend."

It's unclear how important this is to a button-down guy like Darbee. All things considered, he still seems a little uncomfortable in the role of crusading environmental champion.

Darbee smiled when I pointed out that, on environmental matters if nothing else, he now has more in common with former Vice President Al Gore than he does with President Bush.

Darbee replied that he's never met Gore but would welcome the opportunity to speak with him.

"We've come to the same point, as far as I can see," he said. "That's a very intriguing development."

David Lazarus' column appears Wednesdays, Fridays and Sundays. Send tips or feedback to dlazarus@sfchronicle.com.                

Page C - 1

             

If not, expect additional scrutiny and a story with legs

There is nothing more painful than trying to weather a "bad-news" story involving your business, especially when the story has "legs." That is jargon for a story that just does not want to go away. Poorly managed bad news distracts management attention, paralyzes business operations, destroys morale and makes your media relations staff want to shut off the phones and turn off their pagers. Just ask them.

I have a sure way of allowing your bad news to grow legs in the media:  Don't tell all of it.  Let it dribble out, and do so only when cornered. I do not advise this strategy, but I see it.  The Wall Street Journal wrote about one Colorado company living it.

I counsel just the opposite:  Be transparent.  If you have bad news to report, develop a plan to get it out, all at once.  It's good business strategy, earns credibility and your stakeholders, including the press, respect that type of behavior.

Question:  Is your business news transparent?  If not, why not?  Wall Street loves clarity.

A bad-news story with legs subjects your firm, employees and shareholders to the drip, drip, drip of prolonged media scrutiny and public pain.  Now, the ability to tell bad news is not amateur hour.  So, bring in the expertise needed to do it right.  I've just never seen a CEO convince me why subjecting a company to extended, negative media attention is the right thing to do. 

AHEAD OF THE TAPE By JUSTIN LAHART

			RECENT COLUMNS                             September 19       • Losing Heat September 18       • Listen to Your Analyst MORE VIDEO REPORT   • Watch Justin Lahart and Jon Hilsenrath discuss today's column.                         SEARCH PAST COLUMNS Search for these words:     Display all columns   advertisement TODAY'S MOST POPULAR 1. 'Any College Will Do' 2. Get the Most Pay Out of Your Job 3. Is 'Dr. Z' Kaput as Chrysler's TV Pitchman? 4. The Hedge-Fund King Is Getting Nervous 5. How Natural-Gas Bets Sank Hedge-Fund Trader     COMPANIES     Dow Jones, Reuters             KFX Inc. (KFX)                                               PRICE CHANGE 11.53 0.04 9/18             KFX Inc. (KFX)                                               PRICE CHANGE 11.53 0.04 9/18                             * At Market Close

Losing Heat
September 19, 2006; Page C1

KFx Inc. is a company that aims to make low-quality coal burn better. Lately, its shareholders might be feeling burned.

The Denver company processes coal from Wyoming's Powder River Basin, home to one of the world's largest coal deposits. The commodities boom has gotten investors agog with energy plays. Since 2002, KFx's share price has more than quadrupled.

KFx's coal is low in sulfur and ash, meaning it can potentially burn cleaner than more expensive Eastern coals. But it's hard to process because it is dusty and has high water content, which prevents it from throwing off much heat and makes it hard to transport. The key for the company is proving its process solves those problems. Wall Street is starting to wonder.

On Sept. 1, KFx shares fell 5% after Pacific Growth Equities analyst Michael Horwitz said he'd heard that one of KFx's industrial customers had rejected a delivery of coal because it didn't produce enough heat and its dust content was high and unsafe.

The company fired back with a press release saying Mr. Horwitz's report was an "apparently malicious attempt to damage our stockholders" without "any attempt to verify the facts." The company said it had notified the Securities and Exchange Commission and that it would "seek appropriate remedies."

Mr. Horwitz said in a research note he tried to contact KFx's management prior to his comment. He wouldn't comment. In an email, KFx director of investor relations Karli Anderson says the company is "at a loss" to explain Mr. Horwitz's actions.

Then last week, KFx's share prices fell even more after it announced a test run at a different customer, utility operator FirstEnergy. Investors felt the release was short on details, then in a follow-up, KFx said there had been excess dust in a delivery to FirstEnergy and that a few of the coal cars it shipped arrived with "elevated heat content."

Short-sellers -- who make bets that shares will fall -- are smelling blood. One critic, Manuel Asensio, has posted videos and pictures on the Web purporting to document KFx problems. Right or not, it's a sign, perhaps, that the commodities boom is losing heat.

Write to Justin Lahart at justin.lahart@wsj.com

Apple Finds 'Irregularities' in Employee Stock Options, Including Some of Jobs's

Apple Computer Inc. just became "the best-known of several Silicon Valley companies to acknowledge that some stock options awarded to employees might have been mishandled and said the options included a batch granted to co-founder Steve Jobs," according to the Associated Press.

Both "good" news and "bad" news present CEOs and their organizations with a simple but criticial leadership imperative:  Break your own news, first.  That means be the first to tell your organization's story. 

Questions:  Could you have done what Apple's Steve Jobs just did (attached)?  Do you recognize the strategy in Apple's announcement?  It is a superb case study.

Going public with good news -- that's an easy decision.  Ask your PR or Marketing Communications Department to brief you on their media and stakeholder relations plan and then enjoy the headlines or web coverage.

Going public with bad news -- that's a leadership moment.  I've seen world-class CEOs and management teams freeze like the proverbial deer in the headlights when faced with these moments.  What will my boss think?  How will our stock react?  What will this do to my career?

All the media training in the world will not help you without the fundamental understanding that you and your enterprise are better off telling your own "news"...than letting someone else do so.

[Full Story]

I am not saying that sharing "bad" news is easy.  I am saying that sharing it first, is.  It's about credibility and leadership.  In good times or bad, people look to their leaders to do the right thing.

Being first to "market" with your own news is an important tenant to earning long-lasting credibility, support and even sympathy for your organization.

I've announced hundreds of stories, good and bad, from Nobel Prize-winning discoveries to the dramatic shutdown of the nation's entire Cold War-era operations...from historic groundbreakings and computing breakthroughs to plutonium contamination and patient deaths. 

The best approaches had a commonality:  Be the first to break your own news. And if you do not know how to do it, especially with bad news, bring in the expertise to train you and/or help you right now. It is not amateur hour. 

Bring in an experienced vendor if you lack the expertise in-house. Most of all, do not "hope" something will blow over unnoticed...or think that a "crisis" will not happen to you. 

Instead, prepare...beforehand...and demonstrate the leadership your employees and shareholders expect of you.

Apple's Steve Jobs did just that.  The rest of Wall Street should follow his lead.

Apple Finds 'Irregularities' in Employee Stock Options, Including Some of Jobs's

SAN FRANCISCO, June 29 -- Apple Computer Inc. on Thursday became the best-known of several Silicon Valley companies to acknowledge that some stock options awarded to employees might have been mishandled and said the options included a batch granted to co-founder Steve Jobs. The problem threatens to raise questions about the accuracy of past financial statements.

Without providing details, the Cupertino, Calif., maker of personal computers and iPod music players said its own investigation had uncovered "irregularities" in employee stock options issued between 1997 and 2001.

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That included some that went to Jobs, but the chief executive canceled those awards in March 2003 before he cashed them in to realize a gain. Jobs surrendered all of his outstanding options in exchange for 5 million shares of Apple stock, now worth $295 million.

Apple said it had hired an outside lawyer to lead an investigation into its past stock options and has notified the Securities and Exchange Commission of the problem. Apple spokesman Steve Dowling said the company started the inquiry because of concerns about stock option grants at a number of other Silicon Valley companies.

The SEC has subsequently launched its own inquiry since other companies raised red flags about their options. The Justice Department has also subpoenaed information from many companies suspected of rigging their options to lock in bigger windfalls for top executives and other employees.

Nearly half of the 57 companies that have disclosed stock option trouble are based in Silicon Valley and other parts of the San Francisco Bay area.

"Apple is a quality company, and we are proactively and transparently disclosing what we have discovered to the SEC," Jobs said. "We are focused on resolving these issues as quickly as possible."

Apple has been paying Jobs, its iconic leader, a $1 salary for years while finding other ways to reward him. In 2001, for instance, Apple gave Jobs a $43.5 million Gulfstream V jet.

The stock option news, released after the market closed, appeared to jar investors. Apple shares surged $2.95, or 5.3 percent, to close at $58.97 on the Nasdaq, then retreated by $1.42 in extended trading.

Most of the stock option investigations have revolved around a practice known as "backdating."

This occurs when a handful of insiders retroactively decide to set a stock option's exercise price at an ebb in a company's stock price instead of pegging it to the prevailing market value at the time of the award.

Stock options become more valuable as the market price rises above the exercise price, so backdating fattens the recipient's profit.

Backdating stock options isn't necessarily illegal, but it can cause a company to improperly deduct employee compensation expenses -- a misstep that could exaggerate profits and result in an underpayment of taxes.

If the backdating isn't properly disclosed, regulators also might interpret the action as a form of financial fraud, exposing companies to civil penalties and a raft of shareholder lawsuits.

Apple didn't say whether its stock option trouble involved backdating.

Meanwhile, two other Silicon Valley companies disclosed widening investigations into their previously disclosed backdating issues. Both Intuit, Inc., based in Mountain View, Calif., and Equinix Inc. of Foster City, Calif., said they had received subpoenas from the Justice Department seeking more information about their past stock options.

Staff writer Mike Musgrove contributed to this report.

When anchoring those 5:30 a.m. newscasts, I was convinced that it was just me looking at the red light on the camera...and no one else was awake, much less watching.

The big bucks were "supposed" to be in the evening newscasts.  (I anchored those, too).  But, times are changing.  Early news is important, and savvy CEOs recognize that publicity early can be a bigger bang for the buck later.  Are you targeting the early shows with your PR? 

It's not just my opinion. 

From The Wall Street Journal, quoting now:

[Full Story...]

"The latest round of morning-show skirmishing comes as the programs buck the trend in network news: They are actually growing. The long-term outlook for evening news broadcasts is grim and prime-time news shows are struggling: ABC's fall schedule has no time slot for "Primetime," and NBC shunted "Dateline" to the purgatory of Saturday. But the morning shows have inched up 6% in combined viewers since 2003, compared with a comparable drop of 9% for the three evening news programs in that period, according to Nielsen.

"The trend is mirrored at local stations, where early-morning news -- even newscasts starting as early as 5:30 a.m. -- are gaining viewers and ad revenue.

"Various theories explain the rising fortunes of morning news. Some news veterans point to statistics indicating that Americans are starting their days earlier and occupying themselves with work, activities or cable news later in the evening. "The morning shows are the inheritors of the old function of the evening news," says Bob Bengtson, a retired ABC News executive. "For a lot of people, the morning is the new dinner time." Another camp thinks it's a result of the unsettled state of world affairs, while others speculate that people like the morning shows' entertainment aspects."

The CEO's Takeaway:
"News" is now a 24-hour, seven-day a week, year-long cycle.  It is also global.  Have you seen the early-morning show on CNBC featuring three people co-anchoring business news from three continents?  With viewership of the once flagship (and expensive) "evening newscasts" -- coupled with declining ratings for evening, local news -- don't forget about the other opportunities to showcase your organization and its achievements throughout the day.

If someone has not already said so, I will:  There is a "channel" for everything and it is always "on."  Target the early news shows.  They are not early overseas.  And the early shows in America are "bucking the trend" and solidifying viewer loyalty (and ratings).

June 9, 2006

ABC News Girds For New Bout With 'Today' By BROOKS BARNES June 9, 2006; Page A11 ABC'S "Good Morning America" has been trying for 11 years to race past NBC's "Today" show and become the dominant morning program. It's no small prize: The No. 1 slot can mean tens of millions of extra advertising dollars. But just as "Today" is showing some signs of vulnerability -- its anchor team is in flux after Katie Couric's departure last week, and a huge renovation of its signature studio is causing headaches on and off screen -- "Good Morning America" is having engine trouble. "Good Morning America" learned in mid-May it would lose its popular host, when Charles Gibson was sent to stabilize the network's faltering "World News Tonight" franchise. The popular weatherman Tony Perkins left the show in December, and last week, the executive producer of "Good Morning America," Ben Sherwood, resigned to move to Los Angeles, where his mother is suffering from cancer. The show's other host, Diane Sawyer, is locked into a long-term contract with no windows, but ABC News a unit of Walt Disney Co., has had to work overtime squashing industry speculation that she is packing her bags, too. "I want a strong and stable 'Good Morning America,' " Ms. Sawyer said in an email, "and I will be there to do everything I can to make that happen." Meantime, "Today" is riding the wave of publicity generated by the showy send-off that NBC News, a unit of General Electric Co., gave Ms. Couric. On Friday last week, the "Today" broadcast, sans Katie, delivered an average six million viewers, or 1.7 million more than "Good Morning America" -- more than twice the usual gap of around 800,000 viewers, according to Nielsen Media Research. (CBS Corp.'s "The Early Show," in third place but trying hard to improve, attracts an average 2.8 million viewers.) The latest round of morning-show skirmishing comes as the programs buck the trend in network news: They are actually growing. The long-term outlook for evening news broadcasts is grim and prime-time news shows are struggling: ABC's fall schedule has no time slot for "Primetime," and NBC shunted "Dateline" to the purgatory of Saturday. But the morning shows have inched up 6% in combined viewers since 2003, compared with a comparable drop of 9% for the three evening news programs in that period, according to Nielsen. The trend is mirrored at local stations, where early-morning news -- even newscasts starting as early as 5:30 a.m. -- are gaining viewers and ad revenue. Various theories explain the rising fortunes of morning news. Some news veterans point to statistics indicating that Americans are starting their days earlier and occupying themselves with work, activities or cable news later in the evening. "The morning shows are the inheritors of the old function of the evening news," says Bob Bengtson, a retired ABC News executive. "For a lot of people, the morning is the new dinner time." Another camp thinks it's a result of the unsettled state of world affairs, while others speculate that people like the morning shows' entertainment aspects. Whatever the reason, scrutiny of "Good Morning America" has rarely been greater. Disney executives who normally give ABC News and its president, David Westin, a long leash have been aggressively stepping in. "Intense scrutiny is an understatement," says one senior Disney television executive. Priority No. 1: Fill the crucial executive producer position and send a signal to viewers and advertisers that the show is stable. "Ben's resignation came as a surprise, but I'm moving as quickly as possible to find a new executive producer," Mr. Westin says. Mr. Westin says he could announce Mr. Sherwood's successor within days and that he would expect the new "Good Morning America" captain to start work within three weeks. The plan is for Mr. Sherwood to continue at the helm until Labor Day, with his replacement spending the summer planning an informal re-launch and finding a new anchor to share the sofa with Ms. Sawyer and the show's lesser-known third anchor, Robin Roberts. Mr. Westin declined to discuss his hunt. But people close to him say candidates include "Good Morning America" deputies Tom Cibrowski and Jessica Guff, and Neil Shapiro, former president of NBC News. Speculation that Mr. Westin will hire Tammy Haddad, executive producer for MSNBC's "Hardball with Chris Matthews," has been overblown, these people say. Mr. Gibson's June 30 departure from "Good Morning America" will "of course be a significant blow," Mr. Westin says. Since Mr. Gibson returned to the program in 1999 with Ms. Sawyer at his side, ratings have improved 19%. Still, Mr. Westin says not to underestimate the temporary pairing of Ms. Sawyer and Ms. Roberts. "We are fortunate to have some built-in stability with Diane and Robin, who we promoted to anchor not long ago because she deserved it and in anticipation of a day Charlie might leave," he says. The search for Mr. Gibson's replacement is in its initial stages, but among the early candidates is Bill Weir, co-anchor of the weekend edition of "Good Morning America," according to one ABC News executive. Chemistry with Ms. Sawyer will be key in any hiring. In addition, the show needs to fill Mr. Perkins's weather slot and to hire new on-air contributors. Several ABC News executives argue that the opportunity to topple "Today" won't come this summer but rather in the fall. That's when Meredith Vieira is set to go to "Today" as Ms. Couric's replacement and viewing levels usually jump after a summertime lull. Summer months are important in terms of retaining a loyal audience, but ABC News doesn't see it as a time to spend lavishly on ratings-boosting stunts. Jim Bell, executive producer of "Today," says he isn't worried. "We have a team and a plan already in place," he says. "That doesn't appear to be the case elsewhere." "Today" will move back to its glass-walled Rockefeller Center studio in the fall following a renovation, in which the studio added high-definition equipment. The show has been filming in a temporary outdoor set, which has presented sound problems as well as awkward camera shots of screaming fans during serious news briefings. A spokeswoman says the kinks with the new set-up are being worked out. Mr. Westin says he is disappointed Mr. Sherwood won't be the one "doing battle" in the fall, noting that "Good Morning America" has notched huge improvements during his tenure. The past two seasons have been the program's best since at least 1991, and viewing gaps with "Today" shrank to their smallest in ten years, he says. Write to Brooks Barnes at brooks.barnes@wsj.com1

CEOs are you making the best use of your public relations and marketing monies? Or are you still handing out branded pens, T-shirts and coffee mugs?

This article from The Washington Post will stir some thoughts.  I am not saying to abandon traditional advertising and PR; I am saying to consider your options to achieve the best ROI.  Big business or small business, you can easily brand your logo, web site and phone number on an iPod (or the popular "memory sticks"), and hand them out...instead of pens. And make a lasting impression.

Survey: iPods More Popular Than Beer

The Associated Press
Thursday, June 8, 2006; 9:06 AM

SAN JOSE, Calif. -- Move over Bud. College life isn't just about drinking beer. In a rare instance, Apple Computer Inc.'s iconic iPod music player surpassed beer drinking as the most "in" thing among undergraduate college students, according to the latest biannual market research study by Ridgewood, N.J.-based Student Monitor.

Nearly three quarters, or 73 percent, of 1,200 students surveyed said iPods were "in" _ more than any other item in a list that also included text messaging, bar hopping and downloading music.

An Apple Computer Inc. salesman holds up the new Apple iPod Nano, center, next to the Apple Shuffle, left, and regular iPod, right, at the Apple Computer Store in Palo Alto, Calif., Friday, Sept. 9, 2005. (AP Photo/Paul Sakuma, FILE) (Paul Sakuma - AP) QUIZ The iPod has surpassed beer drinking as the most "in" thing among undergraduate college students, according to a new survey. What was tied with drinking beer as the second-most popular activity? A.   Downloading music B. Instant messaging C.    Visiting Facebook.com D.   Text messaging   • Test Your Knowledge -- More Questions • Submit Your Trivia Question

In the year-ago study, only 59 percent of students named the iPod as "in," putting the gadget well below alcohol-related activities.

This year, drinking beer and Facebook.com, a social networking Web site, were tied for second most popular, with 71 percent of the students identifying them as "in."

The only other time beer was temporarily dethroned in the 18 years of the survey was in 1997 _ by the Internet, said Eric Weil, a managing partner at Student Monitor.

Though beer might soon regain its No. 1 spot, as it quickly did a decade ago, the iPod's popularity is still "a remarkable sign," Weil said. "For those who believe there's an excessive amount of drinking on campus, now there's something else that's common on campuses."

Student Monitor conducted the survey the week of March 6, interviewing full-time undergraduate students at 100 U.S. colleges. The margin of error is plus or minus 2.3 percentage points.

BusinessWeek now has reporters assigned to cover blogs.  Why?  Involving bloggers is now a proven tactic to earning key stakeholder support and shaping public opinion about your company.

Develop a plan to look at the potential benefits of folding bloggers into stakeholder outreach -- the 100,000-foot view from such a plan will cost less than the design and printing of one, nice brochure.  What are "bloggers" saying about you and your company?  The number of people saying something, including your own staff, will surprise you.  Have your communications/media relations office or PR firm track the blogs for you, in addition to the "daily newsclips."

My Recommendation:
Incorporate web-logs into your Online Outreach Plan.  And track your success.  Getting the right message in front of the right stakeholders is crucial for your image.  This strategy goes deeper:  You are actually involving key influencers in your success.  GE and Microsoft get it, according to the New York Times:

[Full Story...]

"Before General Electric announced a major investment in energy-efficient technology last year, company executives first met with major environmental bloggers to build support. Others have reached out to bloggers to promote a product or service, as Microsoft did with its Xbox game system and Cingular Wireless has done in the introduction of a new phone."

As CEO, employ "web-alism," (as well as journalism and marketing communications) to earn the recognition and support your people and initiatives deserve.

Wal-Mart Enlists Bloggers in P.R. Campaign

What I write here is meant to help you today.  View me as your tried-and-true "laboratory" on how to succeed in public relations, marketing and corporate communications.  I have 20-plus years of experience with Fortune-500 firms, the nation's news media and with representing some of our nation's most important issues in the media worldwide.

I've been allowed to learn and do what you want to know.  I have set up or performed more than 5,000 interviews in the media worldwide, developed 1,000-plus news releases, and coordinated hundreds of public, press and regulatory meetings and I have trained senior corporate officials, elected officials, and local, state, federal and community leaders for them.  That means my portfolio of experience -- my intellectual capital earned on the street -- is available to you right now.  I've managed the communication of crises, both short- and long-lived events.  Some events involved VIPS, highly sensitive personal and/or classified information.  Some I can't talk about.  Along the way, I've learned a lot and been both honored and humbled by the journey.  I am wired to do what I do and I have lessons and perspective to share.

So, it is not lightly that I say to CEOs out there, in small companies or large ones:  The recent coal-mine crisis is your crisis, too.  Let me explain.

[Full Story...]

The crisis is still unfolding, as I type this; it's in the "under review" stage.  This tragedy, unfortunately, is an extended crisis and going to be a case study.  Don't wait, however, for the final reports, the investigations (and federal funding for more mine safety).  You, the CEO, are faced with an imperative.  Anyone following the crisis through its stages knows we are in a new era of "Ultra-Fast Crisis Communications."  If you think this is an era that will pass, you are wrong.

You now know that:

• The news media is open 24/7 -- radio, TV, the Internet
• There is now:  News, Developing News and Breaking News.  One story can be all three and the last two categories "allow" for inaccuracies
• Big news goes worldwide in moments, especially "bad" news
• Command Centers and procedures, aside, cell phones and text messaging can leak around your "crisis-response" systems
• This portable technology makes "spokespersons" of individuals who may have absolutely no training to "represent" a story accurately to media gatekeepers
• A "bad-news" story is not over in an hour -- it has legs and will evolve over stages and time
• A crisis is about your reputation and the future of your business
• It can negatively impact the reputation of your entire business sector for years 
• Preparing and training for a crisis -- before a crisis -- has never been more important

I'm not breaking new ground here, except for this.  It is time for you to look in the mirror and do a quick assessment.  If I ask you to ask, "Is my company ready for a crisis?", I already know the answer.  Most companies never have been. But ask this, "What one step could I take in the next few weeks that would increase the probability of my company not just surviving a crisis, but also managing a crisis to success in the eyes of my stakeholders?"

Here's my blunt answer.  Get media training for your senior team.  And, then, provide the same training as deep into your organization as possible. I'm not saying that the operators who answer your phones should be quoted some day...but they just might.  So could that intern with a cell phone who sends a text message to friends or family.

I have said that the first casualty in a crisis is communications.  That used to mean good information took time to get or that communication systems broke down -- think power outages, an event at 2 a.m. on a weekend when mustering your response team took time or time to fully understand the complexity of the situation (Three Mile Island). 

Now, however, that means technology makes information available more swiftly than ever and through informal channels command centers need to consider in their crisis planning. 

You now know that the "spokesperson" who shapes your company's performance in a crisis -- perhaps way to the downside -- may be a friend of a friend or family member who heard second- or third-hand from a well-meaning, but emotional someone with a cell phone.  It is now likely, that it will not be the trained professional in a tie preparing a press briefing at the "official" command center at a "coordinated" time. This is important.

Crisis communications is not just for the people in the command center, anymore.  I am saying that if you think a crisis is something PR, safety and security people do huddled in a command center -- with the obligatory practice drills a couple of times a year -- you are admitting you want more risk:

• How trained is your leadership team for a crisis that plays out in the media?
• How comfortable are you with your ability in front of the media or the public? -- could you have done what that coal-company CEO did before the cameras and with the grieving families?
• How trained is your organization?  Are staff at least aware of the stakes -- honestly?
  
• How are your relationships with first responders, elected officials, regulators and your employees?

If just one of these questions made you uneasy consider that not just a wake-up call, but a gift.  My advice -- start (or refresh) your media training now.  Develop (or update) your crisis communications plan.  Again, I already know that most companies are ill prepared for a crisis.  There are books on that. And, although better prepared in general, I'm not giving a pass to the nuclear, defense and other high-risk, high-visibility sectors here.  And then ask how you will bring that training vertically into your organization.  Training is not just for the "C's," anymore.  In a crisis, leadership is needed at all levels.

But can you afford to? I would say, "How can you not afford to?"  For a small- to mid-sized organization, the cost is probably equivalent to the monies needed to make three brochures (on your new HR offerings, perhaps) and one billboard on a busy street for two months.  Skip the brochures and the billboard.  Cancel a couple of "standing" meetings.  Replace them. Remember, you do not need to hire people in-house to do this, (as in add overhead).  You can hire the expertise to help you prepare.   And I'm not talking about someone who can teach you how to give good "sound-bites" because they were once reporters -- you need that and someone who knows corporate America, our nation's emergency response systems and has done it.  A crisis is not amateur hour.

Be prepared.  Beforehand.  It's your company's reputation and future at stake.

A final thought:  Every crisis I have been involved with -- from the Columbine incident to the Space Shuttle Challenger mishap -- has revealed material things that could have been managed differently.  Don't wait for a crisis to start learning how to be better.

More on "How to survive the First Hour" of a crisis in future posts.

A growing number of U.S. hospitals are reportedly saving money by reusing medical devices designated for one-time use, ignoring the warnings of manufacturers, which will not vouch for the safety of their reconditioned products.

Question:   When it comes to your health, what is more important than safety...and what are you doing to communicate your safety success to potential customers and key stakeholders?

Strategy:   Develop a Safety Communications Plan.

Your safety record helps consumers make good buying decisions.  It worked for Volvo. It works for construction and engineering firms.  I believe the first healthcare firm (and I worked for the largest one in the country) that declares it is the "safest" will get my attention...and recruit the top physicians and nurses.  How about the firms that make children's clothing, utilities, environmental and defense companies, food companies, computer ergonomics?  Safety is a differentiator and can attract new business.

Tactic:   Audit and create key messages about your safety advantages.  Form a multi-disciplinary Safety Success Team.  Give it the resources to communicate to internal and external audiences.  This includes vendor support.  Attract media attention. 

If your safety record stands up to accepted industry standards, publicize it widely and earn credibility for your efforts.

[Full Story...]

Hospitals Save Money, But Safety Is Questioned

By Alec Klein
Washington Post Staff Writer
Sunday, December 11, 2005; A01

A growing number of U.S. hospitals, including at least eight in the Washington area, are saving money by reusing medical devices designated for one-time use, ignoring the warnings of manufacturers, which will not vouch for the safety of their reconditioned products.

Hospitals are not required to tell patients that reconditioned devices will be used in surgery -- surgeons themselves often do not know. The Food and Drug Administration regulates the practice, and many hospital administrators say reusing single-use devices is not only cost effective but also poses no threat to patients because the instruments are cleaned with such care that they are as good as new.

But single-use devices have malfunctioned during reuse, federal records and interviews show. In one instance, an electrode from a catheter broke off in a patient's heart. In another, a patient's eyeball was impaled. And an infant who for months gagged and retched on a resterilized tracheal tube now can take food only from a tube attached to his stomach.

Based on available data, it is impossible to compare how often single-use devices malfunction in their first operation versus subsequent uses. That is because the FDA, which devotes few resources to overseeing what is now a fast-growing industry, began requiring only last year that hospitals report whether a malfunctioning device had been reprocessed.

The Washington Post examined thousands of pages of documents, including FDA records, court filings and internal company reports, and was able to document dozens of cases of patient injuries and device malfunctions after single-use devices were reused over the past decade.

In one case in March 1998, cardiologist Peter Karpawich removed from a child's body a single-use catheter, which was handed to a nurse. The device tip appeared to be twisted, and the shaft at one end of the catheter had separated from its bonding. After investigating, manufacturer Boston Scientific Corp. told the FDA that the problems were "likely due to aggressive disinfecting and cleaning between uses."

Although the patient was fine, Karpawich said, Children's Hospital of Michigan in Detroit immediately stopped all reprocessing of single-use devices. "If there is the remotest possibility that a catheter might be used twice, that you could potentially harm a patient, you should not use it," he said. "It's common sense."

Nonetheless, single-use devices are being manufactured and reused with increasing frequency. New plastics and other materials make it possible for companies to build intricate -- and sometimes delicate -- specialized devices that many doctors say are particularly effective in treating patients. The FDA allows manufacturers to choose between getting approval for a device to be used once or multiple times. Companies are frequently choosing one-time use, which means their products do not have to be as sturdy, their liability is diminished after the first use and they are ensured a steady stream of replacement orders. The manufacturers often ship the devices sealed individually in sterile packaging, marked with warnings that they are not to be reused.

At the same time, hospitals are increasingly disregarding the one-time-only designation as a manufacturer's ploy to force them to buy more devices than they need. Many hospitals are comfortable with reprocessing single-use devices, in part because they have a long tradition of resterilizing the metal and rubber devices that have been used in surgery for generations.

Hospitals in all 50 states and the District, including many of the nation's leading hospitals, are believed to reprocess at least some single-use devices. In the Washington region, the National Naval Medical Center in Bethesda, where the president gets his checkup, at first said it did not use reprocessed devices. But after The Post independently confirmed that it does, the medical center said it does use them on a limited basis. So do Suburban Hospital Healthcare System in Bethesda, four Northern Virginia hospitals in the Inova Health System, and George Washington University Hospital and Greater Southeast Community Hospital in the District. "Because of the rising cost of health care and medical supplies, reprocessing is a cost effective way to provide a high quality product to our patients," GWU said in a statement. The other hospitals echoed the sentiment.

Several local medical institutions, including Georgetown University Hospital and the Children's National Medical Center in the District, said they do not reuse single-use devices. Sibley Memorial Hospital, also in the District, will not reuse such a device either, because it wants "to know that it's absolutely safe and sterile," hospital spokeswoman Sheliah Roy said.

While hospitals reprocess in-house, they are increasingly sending their used devices to outside companies to clean and resterilize. The three biggest U.S. reprocessors, which dominate the industry, declined to disclose the hospitals they serve but said they have 3,370 accounts. There are about 4,800 U.S. hospitals, according to the American Hospital Association. Last year, the big three reprocessors said they refurbished about 4.6 million single-use devices, which were used in medical procedures involving almost every part of the body.

That is a big change from the late 1980s, when the reprocessing business started as health care costs spiraled. Then, only a handful of small operators, some working out of their garages, refurbished single-use medical devices, at first limiting their work to the resterilization of sutures that had been opened but unused. The industry is expected to surpass $100 million in revenue this year.

Although their reconditioning methods have become much more sophisticated, reprocessors often need to take apart the medical instruments -- many involving small openings and delicate attachments -- to figure out how they are made and how they can be cleaned. While device makers raise questions about such practices, the American Hospital Association has supported reprocessing as far back as 2000, noting the FDA's oversight and the cost savings for hospitals. Reprocessors say their reconditioned devices can cost hospitals about half as much as a new single-use device. New biopsy forceps can cost $60; reused, as little as $15. Hospitals that reuse such devices said that the practice may not directly lead to a discount in a patient's bill but that it allows them to buy additional medical equipment or hire more personnel.

Device makers say the single-use tag is not just a label. "Single-use devices typically contain difficult-to-access areas that create barriers to cleaning and permit blood, tissue or other bodily fluids to contaminate the reprocessed device, allowing potential transmission of viral and bacterial infections," said Stephen J. Ubl, president and chief executive of the Advanced Medical Technology Association, which represents device makers worldwide.

An association that represents reprocessors said there is "no credible evidence" that refurbished single-use devices are riskier than new ones.

Caught in the middle of the debate are patients like Brian D. Reid. The 34-year-old firefighter recently entered Christ Hospital in Cincinnati for a procedure to treat an irregular heartbeat. Reid did not know that a single-use cardiac catheter employed in his procedure had been previously threaded into some else's heart.

"I didn't really have a problem with" it, Reid said after the procedure, when he learned about the reuse.

But, he added, "I don't think there would be any harm with the hospital disclosing that" on the "informed consent" form patients must sign. Reid's form explained that the catheter procedure is "generally considered to be safe," but it noted several risks, from bleeding to a heart attack to death. It did not say that the doctor may place a refurbished single-use medical device in the patient's body.

Reprocessors have changed their position on patient consent in recent months. At first they said they saw no need to inform patients when single-use devices are reused, because they are safe. Now they say they would support such informed consent as long as hospitals also disclose the risks of new devices.

Fed Through a Tube

Susan and Tony Van Duyn think patients should know when single-use devices are reused.

Their 5-year-old son, Sean, lives in his own world. For hours each day, he sits on his knees inches from a television, his sandy blond head tilted to the left, hazel eyes blank, mouth agape, bouncing up and down, clapping to a children's video, "Blue's Clues." It is the only thing he will watch on television. He cannot eat or drink from his mouth, which his family's lawyer says is the result of a failed reprocessed medical device. The hospital and doctors involved in Sean's treatment settled a lawsuit with the family, so no court determined the facts of their case.

Days after his birth in 2000, Sean was rushed to Arnold Palmer Hospital for Children & Women in Orlando because of a brain inflammation. He had neurological damage. During surgery, doctors inserted a tube in Sean's throat to help him breathe. But the tube turned out to be too big and caused an injury to the lining of his airway, the family said in its lawsuit. That required a tracheotomy -- cutting a hole in Sean's throat below his Adam's apple -- in January 2001. A plastic tube was inserted in his throat so he could breathe. Through its in-house sterilization department, hospital records show, the medical facility reprocessed the tracheal tube despite an explicit warning on the packaging from the manufacturer that the device was not to be resterilized.

The hospital does not dispute that it resterilized the device, said its attorney, Richards H. Ford. Two reprocessed tubes were used in Sean's throat for nine months, while he vomited and retched several times a day. The Van Duyns said they repeatedly asked their doctors whether Sean was having a bad reaction to the tubes and whether they should use a new one. They said the doctors told them that Sean was vomiting and retching because of his neurological problems. Sean's dry heaving got so bad at one point that he suffered a hernia, where a portion of his stomach became lodged in his chest cavity.

Finally, in September 2001, Sean's mother decided on her own to give him a new tracheal tube. She said his retching stopped immediately. When she compared the old and new tubes, she noticed the reprocessed tubes had been bent out of shape, which the family believes was caused by the hospital's heat sterilization process. But by then, Sean had permanent damage. The family contends that Sean lost the ability to eat and drink from his mouth because of the faulty reprocessed tubes. "There is a window of time during which we learn to swallow properly and take things by the mouth, and he passed that time, so now he can't eat or drink," said James F. Bleeke, the Van Duyn attorney.

Ford, the hospital's attorney, defended his client by saying it "makes absolutely no sense" that any hospital personnel would place a plastic medical device in a high-heat sterilizer, adding that the hospital used appropriate methods to resterilize the instrument. In any event, Ford said, the child's eating problem was more likely caused by his neurological damage and not by the tube.

The cost of a new tracheal tube then: about $42.

For Sean's mother, the question remains: Why did the hospital reuse the device? "I just don't think these one-time-use devices should be reused in any shape or form," she said.

Broken Devices and Complaints

Hospitals, concerned about such questions, over the past several years have turned to reprocessing companies that ostensibly have more expertise to clean, sterilize and refurbish single-use medical devices. That, however, has not always protected patients from injury or prevented devices from failing, according to complaints filed with the FDA by doctors, hospitals and other health care professionals.

The FDA records, while limited in their disclosures, document these separate incidents, for example:

In January 1999, an electrophysiology catheter was threaded into the heart of a 32-year-old patient at a Wichita hospital. But the doctor had difficulty removing the device. A "small piece of metal electrode broke off while still in heart and lodged in right atrium," the records say. The device had been reprocessed by Paragon Healthcare Corp., acquired two years later by Phoenix-based Alliance Medical Corp., one of the big three reprocessors. Alliance said it does not use Paragon's reprocessing methods.

In March 1999, a manufacturer told the FDA that it fetched six of its gastrointestinal biopsy forceps from a Florida hospital, which had them reconditioned by Lakeland, Fla.-based Vanguard Medical Concepts Inc., another major reprocessor. The manufacturer tested the single-use devices -- about eight feet long -- by cutting them into segments to access the tubing. It found that they were not sterile. The FDA concluded then that new testing was needed. Mark A. Salomon, Vanguard's senior vice president of corporate development, said his firm paid a lab to test the devices and found them sterile. He said sterility is a "confidence level, not an absolute" because when batches of devices go through sterilizers, the results are statistical probabilities of cleanliness. He said there was "less than a 1 in 1 million chance that a device will be rendered unsterile."

In about January 2001, "During a gall bladder operation, the [patient] was burned slightly by the shaft of a laparoscopic scissor and required two stitches," records say. The reprocessor, Alliance, which is merging with Vanguard, studied the problem and said it could have been caused by a reprocessing error. It said it may have replaced the insulation sheathing on the scissor incorrectly.

In about May 2003, a physician was making an initial groove into a patient's cataract with a sharp instrument when the "tip snapped in half and impaled itself in the central nucleus of the lens." The device had been reprocessed by Alliance, which said the patient had no permanent damage. In its own testing, the reprocessor said, there was no evidence that the reconditioning contributed to the device's failure. In addition, Alliance said such a device failure is found among new single-use instruments.

Around June this year, a trocar, a pointed shaft designed to be inserted into a vein or body cavity, "shattered into multiple glass-like sharp fragments while in the [patient's] abdomen" during surgery. The reprocessor, SterilMed Inc., based outside of Minneapolis, said the trocar had been removed from its packaging but not used when it resterilized it.

"In every case we've investigated," SterilMed found that the device problems were not its fault, said its president and chief executive, Brian F. Sullivan. He also said such device problems are commonly found in complaints against device makers. And he said highlighting some reprocessing problems distorts the industry's good work.

"Nobody's track record is perfect," he said.

At the Hospitals

The big three reprocessors say they perform a great service for hospitals, noting that they reduced hospital waste by 935 tons in 2004, the first year such numbers were tabulated.

Kenneth Hanover, president and chief executive of the Health Alliance of Greater Cincinnati, a chain of six hospitals, said that device makers threatened to charge his facilities more if they reprocessed devices but that he ignored them. His hospital chain has been reusing single-use devices, including catheters and biopsy forceps, for several years, reprocessed principally through Alliance. Asked whether the hospital chain has encountered any problems with reprocessed devices, Hanover said none had been brought to his attention. This year alone, he said, the chain will save about $1 million through reprocessing, which he said means it can buy more surgical devices and other medical equipment.

Aside from saving hospitals money, reprocessors stress that they follow strict cleaning and sterilization procedures and say they test every device they recondition. They also note that Congress's investigative arm, the Government Accountability Office, "found little available evidence of harm from reuse" when it looked into the matter in 2000. The GAO also said that "reprocessing is not invariably safe." In addition, the FDA requires reprocessors to register with it and submit paperwork validating the safety and effectiveness of their work and periodically inspects reprocessors' facilities.

The big three said they are paid per device reprocessed. If they are not able to recondition a single-use device, they say, they will absorb the cost. They said the system does not create an incentive to return to a hospital a reprocessed device that is not fully sterile or functional. Their business, they say, depends on their reputation for safe reprocessing.

"We're only as good as the last device we deliver to that customer, so it has to function appropriately," Vanguard's Salomon said.

Several hospitals vouch for the reprocessors' work. That includes the Mayo Foundation. In a recent letter, an official from its Jacksonville, Fla., clinic informed manufacturers' sales representatives that it was about to begin reusing single-use devices by hiring Alliance, citing the practice's safety and "the dramatic reduction in our supply costs that will occur." The clinic asked the sales reps to "not speak negatively to any surgeon, nurse or other employee about [single-use device] reprocessing while on hospital property."

Erik Kaldor, a spokesman for the Jacksonville Mayo Clinic, explained the letter was written to remind "sales reps from these companies who may not welcome our policies" to not speak poorly about reprocessing because they are trying to sell new devices. He said the Mayo Clinic in Rochester, Minn., also reprocesses single-use devices.

The Johns Hopkins Hospital in Baltimore said it also has just begun reprocessing single-use devices through Vanguard. John D. Hundt, Hopkins's administrator of surgery, said its operating rooms intend to refurbish about 30,000 single-use devices, including drill bits, burs and blades, in the first year.

But Shannon J. Tillman, president and chief executive of Millstone Medical Outsourcing LLC, one of the few reprocessing firms that works with device makers, questions how the others do their job. Tillman's firm has access to the device makers' original product design requirements. Most other reprocessors do not have those documents, but they say they have sophisticated research and development departments to assess how a device was made.

Still, Tillman said, "I think it would be very difficult" for another reprocessor to recondition a single-use device without the original manufacturer's help, given the complexity of the product's material and design. Working in concert with a device maker is "much less risky," he said.

"How do you know for sure," Tillman asked, "what you put back in the hands" of a doctor?

Staff researcher Richard Drezen contributed to this report.

$122-billion a year.  If your city competes well for the lucrative convention business, the economic impacts could help you.  Image and reputation.  They are not just tactics for your Public or Investor Relations departments.  Baltimore has jumped into this high-stakes battle.

Question:  Do you know how active you and your employees are in your Chamber(s) of Commerce and city affairs and community organizations?

Strategy: Develop a Stakeholder Relations plan that audits your existing relationships...compares them to your desired relationships...and then couples the natural interests of your employees with the business goals of your firm and the interests of your community.

Tactic:  Implement your Stakeholder Relations plan through a volunteer Community Team.  The Hawthorne Effect goes to work for you.   Then have your Community Team brief your boss on your firm's success.

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Anheuser-Busch, the brewing giant long associated with glitzy network-TV ads, plans to shift some ad dollars away from network prime time toward cable TV and the Internet to "recognize changes in viewership.

Questions:  When is the last time you had time to read a newspaper from start to finish...or sat through your favorite TV shows' ads?  Did you know that ad space on some of the larger web sites is sold out?

Strategy: Develop an Online Communications Plan that achieves your business objectives and bonds your brand, products and services with potential customers in measurable ways.  This is more than a marketing buy.  This is about targeted relationships and purchasing patterns.   

Tactic:  Direct your Public Affairs, Media Relations or Communications Department to contact Google, Yahoo, AOL and MSN directly (and any specialty web sites if you are in an extremely segmented, niche line of business), and have them pitch you on an Online Media Buy.  Skip your media buyer for now (and save the 15 percent fee).  The research, alone, will raise your firm's Online IQ.  Ask those involved to brief marketing, sales and senior management on their findings.  You will immediately change your advertising footprint -- or decide that less-costly Public and Stakeholder Relationships are more important than an outdoor billboard at $4.8K a month.    

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November 30, 2005

Anheuser Will Raise Spending On Cable, Internet Shift From TV Is Response To Change in Viewership; Restaurant Push Is on Tap By SARAH ELLISON Staff Reporter of THE WALL STREET JOURNAL November 30, 2005 Anheuser-Busch, the brewing giant long associated with glitzy network-TV ads, plans to shift some ad dollars away from network prime time toward cable TV and the Internet to "recognize changes in viewership." The brewer of Budweiser and Bud Light is the latest big marketer to shift away from network TV, and is somewhat of a laggard in making the move. Over the past few years, many advertisers -- including big marketers such as Procter & Gamble -- have begun to depend less on network-TV advertising and to put increased emphasis on more targeted media outlets such as cable channels and the Web. The shift reflects changing media habits, as more people watch cable channels and, in recent years, as they surf the Web. In that time, Anheuser has remained a stalwart of broadcast-TV advertising. Until recently it had stuck to its decades-old playbook of relying on big, breakthrough network-TV ads and sponsoring major sporting events to promote Bud, Bud Light and other brands. The company is the single biggest advertiser during the broadcast of the Super Bowl -- and is the exclusive beer advertiser for the telecast, running 10 ads during the big game last February. The company didn't specify the amount of money it will shift away from networks ads. Last year Anheuser spent $292.8 million on network television, and only $47.5 million on cable channels, according to TNS Media Intelligence. But the brewer has been grappling with a stagnant beer market, which has hurt its profit in recent months. The company, which accounts for about half of U.S. beer sales, has been fighting a debilitating price war with its biggest rival, SABMiller, which has a little under 20% of the market. The two brewers have also fought bitter ad wars over the past year or so, at times comparing the taste or carbohydrate count of their brews. Anheuser is relying on the strength of its brands to raise prices on its beer early next year. In an interview, Tony Ponturo, Anheuser vice president of Global Media & Sports Marketing, noted that men and women aged 21-34 -- a key demographic for the brewer -- were spending 55% of their TV time with cable networks. "What we're really doing is following the consumer," he said. He added that the migration of major sporting events to cable channels has also affected Anheuser's decision-making. Mr. Ponturo said that Anheuser's challenge was to develop "the next beer consumer." He noted that while "you have some of the things that have worked for you for a long time...you have to be in cable and on the Internet and on people's cellphones and in retail promotions. You have to make sure each consumer feels like you are talking to them." The brewer disclosed plans for the shift to cable at an investor presentation yesterday. Anheuser Chief Financial Officer W. Randolph Baker said the spending shift would coincide with a modest decrease in marketing spending next year after a "huge increase" in 2005. Mr. Baker added that the company has a "scale advantage" over rivals. "We can outspend competitors [on marketing] while maintaining lowest cost per barrel" in the industry, he said. "It was much easier in the old days," says Allen Adamson, managing director of WPP Group's Landor, a branding firm. "Big sporting events and big ads were a surefire recipe for success. Now, the easy answer is off the table." Anheuser is also planning to put more emphasis on promoting its beers in bars and restaurants. Mr. Baker said yesterday the brewer has doubled the staffing devoted to servicing those outlets. Write to  Sarah Ellison at sarah.ellison@wsj.com1   URL for this article: http://online.wsj.com/article/SB113331129464809666.html

Success in business.  This builds on my last post about the 10 "traits to success." 

Let me add to those traits and ask the following question:  "Do you know your strengths?"

The Gallup Organization has done extensive research on "strengths." 

It says to stop focusing on trying to "fix" what people are not "wired" to be.  Now, that should get your attention.

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That goes against all those years of performance appraisals -- yes, the HR requirement -- that require managers and employees to agree on weaknesses (areas of development) and an action plan for growth.  Gallup's research shows that leaders should not waste time trying to "put" in what people don't have, but, instead, spend time learning people's strengths and talents and how to grow them.  This book is superb research.  Gallup has access to data!

But how do you select the talent you need, the right talent?   This book should be bought for everyone in your organization.  If someone asked you what your strengths are and how you know, could you respond crisply and with authority?

Great organizations and their leaders now know that this is a differentiating characteristic of successful, notable and profitable organizatons.

Both of the books listed here can be read in a week.  Most importantly, when you and your senior leadership team have read them, buy copies for all your leaders and set aside a series of off-site "academies," where your entire team not only talks about the learning, but also is involved in real-world activities and experiences the learning.  This goes beyond "team building."  Bring in some world-class facilitators to help. Then, develop a culture to continue the learning on-site, so it is not a one-time, flavor-of-the-month event. 

Your public affairs, public and investor relations and marketing communications departments need your leadership...in growing the next generation of leaders.

10 traits that turn dreams into reality. Investor's Business Daily spent years analyzing leaders and successful people in "all walks of life."

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How you think is everything:  Always be positive.  Think success, not failure.  Beware of a negative environment.

Decide upon your true dreams and goals:  Write down your specific goals and develop a plan to reach them.

Take action:  Goals are nothing without action.  Don't be afraid to get started.  Just do it.

Never stop learning:  Go back to school or read books.  Get training and acquire skills.

Be persistent and work hard:  Success is a marathon, not a sprint.  Never give up.

Learn to analyze details: Get all the facts, all the input.  Learn from your mistakes.

Focus your time and money:  Don't let other people or things distract you.

Don't be afraid to innovate; be different:  Following the herd is a sure way to mediocrity.

Deal and communicate with people effectively:  No person is an island.  Learn to understand and motivate others.

Be honest and dependable; Take responsibility:  Otherwise, Nos. 1-9 won't matter.

I would add the following:
It is trendy for management to say, "Learn how to manage up."  That, however, assumes a number of factors, such as whether your leadership is honestly open to "intrapraneurship and ideation" and that you are not in a command-and-control system.  So, I offer something simpler.  People are hungry for leadership.  Including your leaders.  Give more than is expected and always be preparing yourself for the next step. Leadership and results get noticed.

The Wall Street Journal just waved a red flag at you and your firm.  Read on. 

"Knowledge management is one of the workplaces most vexing problems...few organizations can figure out how to share knowledge among employees, or to pass it on when employees leave or change..."

Alright, you're the CEO.  You have a financial question.  So, you turn to the CFO.  A legal question?  Well, no question, time for legal counsel or your ethics and compliance officer.  An employee-related issue?  That would be a call to HR.  But, today, you have a media-, community- or stakeholder-relations issue or need help with marketing communications.  No need for help here.  You're the CEO.  This is the "soft" side of the house.  The category "Other" on the balance sheet.  With your background, you can handle it yourself.  No need to bother your boss with it.  Better yet, just assign the issue to the "PR" or "Marketing" department. 

Wrong. 

Everyone needs a "Kitchen Cabinet," especially when you are at the top.  The real question is, "Is your public or media relations staff in your inner circle and, if not, why not?" This is not a post about "succession planning."  This is about real-world "Knowledge" and the credibility, reputation, relevancy and profitability of your firm.

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I was once assigned by a top corporate officer to be the executive director for a new CEO of our most highly visible, profitable subsidiary.  I believe the words were, "Don't let him out of your sight." The president was technically sound; I knew external affairs, from public affairs to media relations.  I was the "knowledge" that balanced operational decisions with stakeholder expectations.  This was a half-billion-dollar operation with huge environmental, energy, defense and health and safety considerations.  Not only that, we were part of a Fortune-100 firm with a stock price.  In restrospect, it was a superb move.  I was a combination of Chief of Staff/Press Secretary/Marketing without the titles.  By aligning my skill set and experience with operations, it freed the CEO to do what he did best vs. trying to make the CEO into something he was not.  The move formalized the value of my knowledge and accelerated our firm's success.

So, how many CEOs used to be head of public affairs, public relations or marketing communications?  The answer is, "Very few." The truth is you probably have some training and street experience, but not decades of experience in "the court of public opinion" and you are not a subject matter expert in these fields.  You don't have to be.

Bottom line:  If your inner circle -- formal or informal -- does not include expertise in media and public relations, then address the situation. 

If that expertise is buried under a vice president, tucked away in the organization for budget reasons (budget pressures) or just plain too inexperienced, then at least contract with someone who can fill the empty chair at your table of trust, if only on a "virtual" or contract basis. 

Have them work with you -- and partner with your public relations department.  It's an ultra fast way of injecting decades of experience into your organization, in a cost-effective manner, while mentoring the next generation. 

You are buying both the knowledge and the transfer of knowledge.  The buck stops with you and the knowledge is available.  Your company's issues, good and bad, can become this hour's news in an instant.  Are you ready to be the news...or to make the news?  Who are you even talking with that would know? 

Great leaders are like great coaches:  You articulate the vision, execute the plan, manage the resources, communicate your successes...but you don't have to play all positions.

The technology firm I rely on to maintain my online relationship with you recently experienced a severe service failure.  The firm is in the middle of what I call an "extended, nagging-crisis."

Its crisis, which involves an upset in operations, is your opportunity to plan today for tomorrow's, ""what if?""

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Quoting now: "...last week...TypePad suffered a severe hardware problem, causing blogs to be inaccessible for two hours and posting to be inaccessible for 16 hours. This was the longest outage in TypePad’s history, and given our performance problems in October I understand why at this point an apology might sound hollow. But the truth is, we are very sorry. The outage, of course, is inexcusable, and for us at Six Apart it was mortifying." 

"If it takes a lifetime to build crediblity, why does it take only a minute to lose it?  Forever."

When your enterprise loses crediblity, you lose your future.  Your sales suffer, your operations grind to a halt, your best people jump ship and your stock prices crater.  Consider United Way's latest troubles.

I donate to United Way, but I do not believe the organization will ever recover fully from its scandal many years ago about how much of its monies were going to overhead vs. the needy.  Now, the ethics of the American Red Cross are again making headlines.  Bad headlines.  After the Hurricanes, I donated to the Red Cross.  I am seriously reconsidering my choice.

It will not be the power or words of the CEO that gets the Red Cross through this -- if it can get through this.  Assuming its operations are not fatally flawed, it will be the ability of the Red Cross to set a new standard in public and media relations to weather this crisis.  The organization can not do this with just its in-house PR team.  It is not big enough and can only work so many hours in a day.

Let me be clear:  The future of the Red Cross is at stake.  The stakes don't get higher.

What would you, as CEO, do?  How quickly could you move?  What contract help -- what PR "swat-team" -- do you have "on-call" for your crisis?

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Red Cross Fires Administrators in New Orleans

In D.C.

After visiting with John L. Pulley, senior reporter with The Chronicle of Higher Education, my son and I toured the great landmarks of Washington, D.C.  Here we are at the Lincoln Memorial.  Earlier, I had met with business editors at The Wall Street Journal, The Chicago Tribune and BusinessWeek.

My son, Jake, was a VIP guest of Steve Jobs at Apple's Annual Worldwide Web Developer's Conference.  We are able to mix interests with geography, as I am currently providing strategic planning, business development, marketing communications and media relations services to help California save energy -- a national issue. This site is a good resource with some good energy-saving tips no matter where you live. 

What is your company doing to save energy...and are you getting good PR for your efforts?