My Three Cents

Communications Through Art

2012-02-23T16:42:00.001-05:00

Last Sunday, my wife and I visited the galleries of Islamic Art at the Metropolitan Museum of Art. These magnificent works came from a vast geographic area, which includes present-day Iraq, Iran, Pakistan, Bangladesh, Turkey, India, Spain and Morocco. Many of those countries were part of the Ottoman Empire (between the 13th and 16th centuries) and were thus strongly influenced by the Mughals, originally from India, who brought with them a pervasive Muslim influence, tempered by the artistic traditions of Hinduism, Jainism, and Buddhism.

What, you are no doubt thinking, does this have to do with communications management?

Well, this fabulous art collection communicated to me that it was produced in societies that encouraged free artistic expression, and possibly free expression in other areas as well. For example, one of the researchers speaking on the museum’s Acoustiguide audio tour reported that one of the principles of Islam “was to let everyone practice their own religion.” This policy resulted in the Golden Age of Spain, a cultural cornucopia during the 15th century.

As you walk through this exhibit of great textiles, carpets, ceramics and metalwork, paintings, books and jewelry, one can only think about the changes that have taken place in several of these countries, where freedom has been restricted either recently or for long periods of time.

It all made me realize once again that art tells a story — not only of the artists that made the work, but also how people lived in the society in which the art was created. While great pieces were no doubt designed as gifts for royalty, the range of the pieces in this exhibit communicated a society where people grew and expanded their interests. It conveyed wealth, success and pride in the culture. None of this could have occurred without a desire of leadership to communicate these themes to the world. Communications, in this sense, has survived centuries.

What Makes a Good Leader?

2012-02-16T16:41:00.003-05:00

A new study from the University of Buffalo has shown that, compared to egotistical bosses, humble bosses: 1) lead by example, 2) admit their mistakes and 3) recognize their followers' strengths.

The researchers found that these three behaviors are powerful predictors of company growth. Moreover, humility has also been found to foster more learning-oriented teams, more engaged staff and lower employee turnover.

By humble, I don’t mean insignificant or inferior. I mean being modest and respectful of the people with whom these leaders work.

The kind of leadership we have at Makovsky combines the best of both worlds. It’s leadership that is ethical and humane. Ethical leaders do the right thing, even if it’s inconvenient or unpopular. It’s always been a valued part of the culture of our firm and embodies how we do business.

That’s because power in today’s transparent and open world is not power over something, but power that energizes and connects, like a network. You build your power, not by ordering people around, but by finding areas of common ground and opening up a world of possibilities that can only be unleashed through cooperation and trust.

Lessons Learned: The Komen-Parenthood Affair

2012-02-13T15:32:00.001-05:00

Lee Davies, a Group Vice President in Makovsky’s Health Practice, is the guest author of this blog on the recent controversy between Susan G. Komen for the Cure and Planned Parenthood.

What happens when an irresistible force meets an immovable object?

According to the laws of physics, that’s when energy is created. And there certainly was a lot of energy generated when Susan G. Komen for the Cure notified Planned Parenthood Federation of America that it was withholding $750,000 in planned grant funding for breast cancer screening.

The move apparently stemmed from a change in its grant guidance last October, restricting grants to organizations under federal or state investigation – including Planned Parenthood, which, lightening rod that it is, is perpetually under federal or state investigation.

But politically motivated or not, one thing is for sure: media attention was loud and strong! Rarely do patient advocacy associations take each other on head-to-head – usually these groups take the high road and “play nicely.” So, from a communications perspective, who did what – and how well did they do it?

Planned Parenthood appeared to own this story. They turned a “victim” role into a powerful, proactive advocate voice. Within hours of official notification, they issued a call-to-action to constituents and mobilized a broad and deep communications effort, including an e-mail communiqué from president Cecile Richards; outreach to influential public officials sympathetic to the Planned Parenthood mission (including New York Mayor Michael Bloomberg, who offered to make up part of the funding shortfall); media engagement, especially with high-profile professional women reporters (Barbara Walters, Andrea Mitchell); as well as leveraging the blogosphere and commandeering the social media space. Their multi-pronged campaign achieved critical mass and created an eventual tipping point resulting in Susan G. Komen withdrawing its grant denial.

Susan G. Komen, on the other hand, appeared to let the story spin out of control. They knew they were taking a highly controversial position. Given their potentially inflammatory stance, they could have done more to prepare the market environment to receive potentially difficult news. Moreover, did they have a “crisis” plan in place to address the media storm that immediately swirled? The impact on reputation or “brand equity” cannot be easily determined. According to news reports, daily individual contributions may have actually risen in the days following their announcement – a reflection of the fact that controversy always has two sides. In the long-term, though, Susan G. Komen’s credibility may have been damaged by muddled communications and contradictory actions. Time and a raft of positive communications – especially with Planned Parenthood – will be necessary to counter this.

So what are the key learnings for us, as communicators, when it comes to delivering controversial news?

• Create a receptive environment in advance by engaging with key audiences and explaining your planned actions.

• If possible, deliver messages in a face-to-face environment, and answer questions forthrightly.

• Enlist the support and aid of outside experts who can help deliver the message.

• Develop a strategic plan anticipating media and audience response, and be ready to either pre-empt or react quickly.

• Engage early and often in the social media space. Monitor discussions and anticipate the tipping point.

• If you are the recipient of negative news, assess your position and its impact, and be prepared to mobilize your stakeholders to take a desired action.

Now that the dust may be settling, one thing seems certain: this communications controversy is likely to become a case study in the power of social media, grassroots constituency relations, advocacy relations and public policy development. It is our job to learn from it.

A New, "No Secrets" Environment

2012-02-09T16:21:00.002-05:00

More than 50 years ago, public relations pioneer Arthur W. Page, said, “Prove it with action. Public perception of an organization is determined 90 percent by what it does and 10 percent by what it says.” With the advent of the Internet Age, this may be more true today than ever before.

The fact that there are no secrets anymore requires a new mindset. We need to think of ourselves as custodians and role models of the correct behaviors.

If we remember that, in a world where cameras now come standard with cell phones, everyone is watching us — even if we can’t see them — we’re less likely to allow the kinds of lapses in judgment that can undermine relationships … or even kill a company.

It’s all too easy, in a thoughtless moment, for otherwise conscientious, intelligent people to forget that their behaviors are just a mouse click away from exposure.

In a careless gesture, an individual hits the “reply all” button on an email and accidently informs the client that the writer thinks he’s “a jerk.” An unhappy employee tells a friend that she’s being harassed by a supervisor. That friend tells a friend who posts it on an industry bulletin board and the story goes viral. Or let’s say the supervisor’s behavior doesn’t go beyond the employee – until a year later when she quits and tells others at her new company – a competitor. Then it becomes gossip.

How we do something may loom larger than what we produce in today’s open and transparent business environment. Author Dov Seidman calls this “the new frontier of conduct” … and I contend that it is rewriting the stakeholder equation. Exceeding stakeholders’ expectations is only part of the equation. As PR professionals, we also need to cultivate the kind of behavior that enhances trust, rapport and, ultimately, reputation.

Setting Records... and Breaking Them

2012-02-06T17:22:00.001-05:00

Big news on CNNMoney.

Recently, Apple nudged out oil giant Exxon Mobil to become the most valuable publicly-traded company in the world.

“The company's stock was up 6.3% to $447.02 a share, one day after Apple reported the best quarterly results in history for a tech company. That spike pushed the company's market value to $419 billion,” Ben Rooney writes.

According to The New York Times, last year Apple earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

Here’s my personal theory why …

Apple first redefined the consumer’s experience of using a portable audio device in 2001, when it launched the iPod First Generation in 2001. Now it seems like Apple is coming out with new products — and impressive innovations on existing products — just about every “15 minutes.” Steve Jobs’ brilliant engineering, design, branding and marketing teams have redefined the market and given rise to a whole family of products that now includes five or six different varieties of iPods — plus iPhone, iTouch and iPad.

Apple outperforms its competition by outperforming its own past performance. Lesson to be learned.

Shame on the New York Times

2012-02-02T16:56:00.005-05:00

It is distressing that a publication with the stature of The New York Times would slam the term “public relations” as a pejorative at best and a phony empty suit at worst…especially in a day when it is defined in Webster’s Dictionary, Wikipedia devotes pages to it, and organizations spend millions on it.

In referring to President Obama’s new task force, the Residential Mortgage-Backed Securities Working Group, designed to investigate abusive practices in the mortgage industry, the newspaper published Gretchen Morgenson’s column, in which she writes: “Some greeted this new task force…with skepticism. It is an election year…and many might wonder if this [new task force] is just a public-relations response to the outrage against [those who] almost wrecked the economy.”

Would The New York Times refer to its own aggressive public relations program as superficial? Even if the Working Group were just a shell, why not call a spade a spade, as opposed to insulting an industry that the newspaper itself depends upon to bring it a percentage of its news and some of its revenues? Further, The Times recently ran an article on the definition of public relations being updated to take the internet into account. Isn’t this two-faced?

Webster’s Dictionary defines public relations as “the business of inducing the public to have understanding for or goodwill toward a person, firm or institution.” Wikipedia offers several definitions, among them, “public relations is the practice of managing the flow of information between an organization and its publics.” Another: “the relationship between an organization and its stakeholders.”

During his debates with Senator Stephen Douglas in 1858, Abraham Lincoln acknowledged the importance of public relations when he said, “Public sentiment is everything. With public sentiment, nothing can fail; without it nothing can succeed.” He didn’t just preach, he practiced. He was one of the first presidents to use tools of our profession to shape public sentiment.

Who Speaks for Costa in Crisis?

2012-01-30T15:59:00.002-05:00

We have yet to hear in a major way from the CEO of Carnival Corporation regarding the shipwreck of the Costa Concordia off the coast of Italy, despite the fact that Carnival owns the Costa Line. Rather, Pier Luigi Foschi, the CEO of Costa’s Italian unit, has been the company’s face to the public, and he has blamed the ship’s captain for the tragedy.

The issue is whether CEO Micky Arison, founder and builder of Carnival, should be the lead spokesman with the press and other third parties…rather than the CEO of a subsidiary unit. Arison believes in giving great independence to his business unit heads, according to a story in the Wall Street Journal on January 23. The question is whether this will be best for his business, one of the biggest brands in the marketplace, over the long-term.

By maintaining a low public profile, the WSJ notes, Arison hopes he can distance the Carnival brand name, and thereby the safety issue, from the Costa disaster. Carnival has 101 ships, and only 15 sail under the Costa brand. “If he talks, Carnival is speaking,” the story points out, and Arison is not granting interviews. He has, however, tweeted his sadness over what occurred and his vows to help all victims; recently he offered $14,000 per victim.

Here’s how I see it. Arison’s hands-off approach has some merit from a management standpoint, but does it hold up with the public? Booz & Company, the leading management consulting firm, found in its recent CEO study that the CEO has longer tenure at companies like this – 6.9 years on average vs. 4.9 at more operational type firms. These types of CEOs also generally bring higher returns for their shareholders, the Booz study notes.

But even Warren Buffet, who has a management style similar to Arison’s (but on a grander level), at risk of a tarnished reputation, had to speak out on the questionable ethics of his heir apparent concerning a company he proposed that Buffet acquire. The heir apparent was forced to resign. But that was all happening at the corporate level and did not involve subsidiaries.

In this case, we have brand protection, safety and shareholder value issues that cross the parent. Speaking out when the spotlight is on you is most likely the action I would recommend in the U.S., where the public respects mea culpa and wants to hear from the top guy. But this situation is not black and white. Arison’s attempt to keep a low profile, thereby protecting the Carnival brand name and putting the focus on Costa and its CEO, might work for a while. But as the lawsuits mount and the trial of the captain takes place, it will be hard for Arison to escape demanding journalists, cameras and lights.

Time Warner Cable's “Customer Appreciation” Blunder

2012-01-26T16:27:00.008-05:00

Paul Lee, an intern at our firm, is the guest author of this insightful blog on the recent communications fracas between Time Warner Cable and Madison Square Garden (MSG).

On New Year’s Day, after failing to come to terms on a new contract, Time Warner Cable blacked out all MSG Network channels, leaving approximately 1.7 million Time Warner Cable customers in the Greater New York area unable to watch their beloved Knicks, Rangers, Devils and Islanders on television.

The public battle between the two parties has grown increasingly intense and, as usual, customers are being used as pawns in the fight for negotiating leverage. When faced with the threat of being blacked out, MSG immediately began airing commercials urging Time Warner Cable customers to switch television carriers. Time Warner Cable countered by airing retaliatory spots criticizing MSG’s steep contract demands. Then, MSG upped the ante by arranging Knicks and Rangers “viewing parties” at various restaurants and bars throughout New York City, which induced Time Warner Cable into committing an extremely costly blunder at a very critical time.

As part of an ill-conceived attempt to “one-up” MSG, Time Warner Cable launched a contest to send “10 lucky winners” to Charlotte, North Carolina to see the Knicks play the Charlotte Bobcats at the Time Warner Cable Arena. They went on an all-out blitz to promote the sweepstakes, airing frequent commercials on multiple channels and even running full-page ads in New York City newspapers.

Time Warner Cable officials described the sweepstakes as a “customer appreciation gesture,” but my recent conversations with numerous Time Warner Cable customers indicate that the contest made them feel less appreciated than ever. Customers described feeling antagonized and alienated upon seeing ads for the sweepstakes, and many even felt insulted. It’s not hard to see why. The contest — a raffle for tickets to attend a Knicks road game at Time Warner Cable's namesake arena — came off as a cheap and cynical attempt to buy customer loyalty and, unfortunately for Time Warner Cable, their carelessness has dealt a damaging blow to their credibility in a very sensitive situation.

There is a simple lesson to be learned from Time Warner Cable's customer appreciation blunder: never underestimate the intelligence of your customers – especially in the internet era – and never let the apparent brilliance of an idea blind you from seeing unintended negative consequences. When engaged in sensitive situations affecting a large number of customers — such as a contract standoff — it’s crucial for companies to make sure that their customers feel appreciated, but raffles and other cheap marketing gimmicks are rarely the solution.

Companies should stick to communicating openly and honestly with their customers. They should keep customers informed about their position, express a deep commitment to finding a resolution and find real, substantive ways to deliver value in the interim. These are the safest and most effective ways to sustain the confidence and loyalty of your customers in highly sensitive situations.

The Internet as Leader

2012-01-23T12:25:00.001-05:00

I’ve been fascinated with the amazing worldwide expansion of the Occupy Wall Street movement, and yet have seen very little coverage of how it happened.

Was there a leader driving this protest into major countries throughout the world? Where has the money come from? Is there a governing body making decisions that enabled the group to grow?

Based on cursory research, I can find no single leader driving this movement. It is a true child of the internet. It seems to have all started with a blog posted by the Canadian-based Adbusters Foundation urging that there be a protest against greed and to encourage greater income equality. The protest suggestion was restated in an email sent by Adbusters to its list and it was “spontaneously taken up by all peoples of the world,” according to Micah White, senior editor of Adbusters Magazine.

It is unique to have a spreading movement managed without an adept leader at the helm. The Occupy group, however, attributes its governance to a General Assembly — it says no one leader runs it; rather, various people speak and lead at different times. Thus, it appears to be the epitome of democracy, unlike most other protest movements.

It is my conclusion, therefore, that the internet, in effect, is the leader. It has led the global expansion. It has influenced the very democratic approach because of its communications range and “all hands” approach. Certainly, without the internet, the participants would not be talking to each other and both encouraging and enabling a global conversation. Occupy’s very effective slogan, “We are the 99%,” is all over the internet, and it is motivational. The internet serves as a fundraiser and has helped collect over $750,000, applied to support the needs of the protesters.

Once again, communications is the power behind the throne.

Communicating with EU Citizens

2012-01-19T17:15:00.003-05:00

I am anything but an economist, but Standard + Poor’s recent credit rating downgrade of France and eight other eurozone countries got me thinking about this development from a communications angle. My question, throughout the entire euro crisis and all the interactions among the leadership, is this: what role have the people in the European Union played?

From a cursory scan of the media, it seems their part of the conversation is mostly confined to grumbling. The leaders of financially strong member nations (like Germany) continue to support the bailouts, despite complaints from their constituents about having to bear the lion’s share of the cost. And citizens of weaker nations (such as Greece and Ireland) are accepting austerity measures, despite widespread unhappiness about cuts in government services.

The European Parliament is an elected body, aware of its constituency and the value of two-way communications. But is it doing enough to garner public opinion in member states via town hall meetings, polling and individual meetings with local leaders and influencers? Is the European Union listening to all its stakeholders?

Our limited research shows no evidence of that kind of interaction (i.e., from a local citizen to the EU level).

While this was on my mind, I found an article, “EU Elites Keep Power from the People,” that first appeared in print in the International Herald Tribune on August 23. It hit on some of the issues I raise above. I felt vindicated. Andrea Römmele, a professor of Political Science and Communication at the Hertie School of Governance in Berlin, feels that true European leadership is missing. She was quoted in this article saying: “With so many national and European issues interlinked, there is a great need for Europe’s leaders to communicate to [with] their public and strengthen Europe.” A German philosopher taking part in the conversation accused “the political elites of reneging on their responsibility to bring Europe to its citizens.”

The article concludes that the Union’s doors have to be opened to accountability-oriented democracy if it is to emerge from this crisis. Once again, communications is the lever upon which success or failure turns.

2011: 3 Top Online Rallies That Changed Corporate Policies

2012-01-12T17:06:00.001-05:00

Bank of America: In October 2011, BofA announced its plan to charge customers $5 a month to use their debit cards, sparking a huge consumer uproar. (Even President Obama weighed in, using the BofA fee as evidence of the need for a strong consumer watchdog.) Online activists designated November 5 as "Bank Transfer Day," urging consumers with accounts at BofA and other big banks to switch to a small bank or credit union. On November 1st — after Wells Fargo, JPMorgan Chase and SunTrust rolled back their debit card fees — BofA did too, citing customer concerns and a "changing competitive marketplace.”

Netflix: In July 2011, Netflix announced that it would be eliminating its popular $9.99-a-month DVD rental/unlimited streaming plan and introducing two new options: Netflix for streaming movies and Qwikster for DVDs (1). Customers of both services would now have two bills to pay, instead of one. Outraged, 30% of Netflix subscribers canceled, planned to cancel or said they were likely to cancel their subscriptions. Netflix stock lost almost two-thirds of its value in the three months following the announcement. On October 11, Neflix reversed itself, announcing that Netflix would be the single source for both streaming and DVDs. Goodbye, Qwikster!

Verizon Wireless: On December 29, Verizon Wireless announced it planned to institute a $2 fee for one-time bill payments using a debit or credit card, either online or by telephone, effective January 15. Outraged again at being charged a fee to pay their bills, consumers rallied their friends online, collecting nearly 162,000 signatures on a Change.org petition. That apparently provoked a promise from the FCC to look into the matter — which was followed, almost immediately, by Verizon’s announcement that it was scrapping the so-called “convenience charge.”

(1) A plan that lets you rent one DVD at a time is now $7.99 a month, while unlimited streaming will also cost you $7.99 a month. If you want both one DVD at a time and unlimited streaming simultaneously, you will have to shell out $15.98 per month.

A Key To Top Performance

2012-01-09T15:06:00.002-05:00

During this early part of January, New Year’s resolutions are still on my mind. And the resolution that is top-of-mind at the moment is this one: “I will consistently perform at a high level.” It applies to me as well as the more than 50 other people at Makovsky.

The key point within that resolution is the word “consistently.” To me it means regularly, steadily, always and with no variation. It is our principle to deliver high-level performance to our clients: regularly, steadily, always and without variation. But no matter what the business, all your stakeholders deserve it — whether staff, listeners or viewers, buyers, subordinates or whoever.

What brought this to mind is that, within the past two weeks, I saw the fantastic Broadway show, “Anything Goes,” the Cole Porter musical revival from the 30’s … TWICE. It stars Sutton Foster, who was praised, in the rave reviews when the show opened last spring, as a triple threat – singer, dancer and actress. And, indeed, she is an incredible performer. But every performer was a gem. The energy exuded by the cast was nothing short of remarkable! The second time I saw the show, it was a Wednesday night, following a Wednesday matinee performance. TWO in one day! Talk about hard work! The enthusiasm, the drive, the smiles, the spirit that the audience could feel brought standing ovations each time I saw the show. . This is consistent performance at a very high level.

So, no matter how you may personally feel, resolve to deliver optimum results to your clients or customers. If you are tired, depressed, sick or whatever, which could cause a less than stellar performance, make sure someone subs for you who can deliver what the client is paying for.

Trusting The Customer

2012-01-05T15:28:00.003-05:00

The internet has brought customers to a new place. They want to be talked with, not lectured to. Slick salesmanship is out; dialogue and candor are in. Customers want to be leveled with. They really want to believe you … and they want you to trust them. There’s empirical evidence of that in a 2003 study of automotive buyers/suppliers by Professors Dyer and Chu, which found that the “least trusted” buyer incurred procurement costs six times higher than the “most trusted” buyer. No surprise, the least trusted companies were also the least profitable. According to author and consultant Dov Seidman, mutual trust between buyers and sellers “sets off an upward spiral of cooperative, value-creating behaviors.”

Every now and then one sees a sterling example of sellers trusting buyers — right where it could potentially hurt: at the point of sale. It happened to me last week when I was in Vermont visiting some friends over the New Year’s weekend.

My wife and I were tooling down a country road when we saw a barn with a big sign out front that said: “Vermont Maple Syrup.” Just what we were looking for! We drove into a little parking lot, turned off the motor, got out of the car and walked in. Much to our surprise this was the “honor system incorporated!” No sales staff. “Help yourself” was the modus operandi. Shelves of everything from jugs to tiny bottles of syrup. And there were related foods on other shelves, t-shirts and Vermont souvenirs. There was a table with a tablet, asking you to write down what you bought, the amount and the total cost, easily retrieved from the price on each item. Above the table was a round chute where you were to toss your money. And there was a box accessing change, if you needed it. We bought. We paid. And we were on to our next adventure in customer trust.

Enter the Vermont Country Store, a few miles from our previous stop. It is an emporium of the famous Vermont cheddar cheese, candies, dips, toys, clothes, robes, night shirts, and so on. You can taste your way through the store. It is really fun. So we paused at the candy department, a large section of everything from sugary junk to all the things you can’t resist. All kinds of stuff in large, open jars — possibly more than 100 of them — filled to the brim with gummy bears, malted milk balls, chocolate-covered coffee beans, cherry cordials, etc. There was no sign inviting you to taste the candies, but there were bags and scales — by implication an invitation to try and buy. There was no sales staff. The store was screaming out: “We trust you. Help yourself!” This is the honor system. The store was jammed with customers, and I found out it has been in business for years.

Trust is contagious. Trust is value. Trust is reputation.

Happy New Year to All!

2011-12-29T14:19:00.001-05:00

And here’s a champagne treat for everyone from some of history’s and movies’ greats.

“Champagne is one of life’s elegant extras.”
— Charles Dickens

“In victory you deserve it; in defeat you need it.”
— Napoleon

“Definition of champagne: a minimum of alcohol for a maximum of companionship.”
— David Niven

“There’s comes a time in every woman’s life when the only thing that helps is a glass of champagne.”
— Bette Davis

“Remember, gentlemen, it’s not just France we are fighting for, it’s champagne.”
— Sir Winston Churchill

The Missing Link in B-Schools

2011-12-22T13:57:00.001-05:00

For years, the public relations profession has been suffering from an educational void in the nation’s graduate business schools, where CEOs and other future business leaders are trained. But could there be some light at the end of the tunnel? Maybe.

Earlier this month, businessweek.com wrote about recent research commissioned by the Public Relations Society of America, which found that 98 percent of the 204 U.S. business leaders polled believe that business schools need to incorporate instruction on corporate communication and reputation management into the MBA curriculum. Ninety-four percent of executives believe that top management needs additional training in core communications disciplines. Only 40 percent of the respondents, the article said, rated their recent MBA hires as “extremely strong” at responding to crisis and building and protecting company credibility.

Spearheaded by PRSA, Paul Argenti, communications professor at Dartmouth’s Tuck School of Business, a pioneer in this area, will lead a pilot program of four other graduate business schools in 2012-13 to develop a public relations curriculum for coursework consideration. The hope, the story says, is that the program will be incorporated into the curricula of these schools for the 2013-14 academic year.

The only hitch is that the four other schools have not yet been selected, and there is no indication of who they might be or whether the interest that has obviously been missing for so long finally exists.

Hopefully Argenti’s experience will be persuasive. He says that, in surveys of Tuck’s MBAs on which courses were the most important in terms of what they actually use on the job, after graduation, corporate communications always ranks #1 or 2.

All of this makes me hark back to May 2007, when I gave an acceptance speech on this issue following my selection to receive the PRSA-NY John Hill Award for Distinguished Achievement. After decrying the fact that not one of the top five business schools taught strategic communications, and that in today’s internet world businesses only exist via public consent, I made a suggestion that I thought would help bring about change.

I urged PRSA to organize corporate communications heads of leading Fortune 100 companies to motivate their CEOs to encourage action in the nation’s business schools. After all, money speaks. If the CEO of a Fortune 100 company calls the Dean of Harvard or M.I.T.’s graduate school of business, he or she will listen. But this will not happen unless we, as communicators, push such action.

If we do this on a coordinated basis, supported by the proof of need shown in the survey cited above plus Paul Argenti’s initiative, this time (after previous tries) the bell should ring. And hopefully the schools by now finally recognize that there is a whole new set of rules to play by … and it’s in their self-interest to play the economics to their benefit.

Comparing Yourself To Others. A Cool Tool

2011-12-19T17:13:00.003-05:00

Conventional wisdom in this day of the internet is that it is other people — specifically, a peer group, rather than experts — that most influence an individual’s feelings or actions. That means, for example, that you are more likely to be influenced in the way you play your game by a more talented tennis player friend of yours than by Roger Federer. So looking at those around us, particularly our friends and neighbors, is a way to acquire information.

But what makes us feel better? Watching a tennis player friend who is better or worse at the game than you are, even though the better player can help you improve your game? It depends upon who the person is. If it is your neighbor, according to a recent study, you would rather play better than he or she does.

A 2005 study cited in an article in the July 2, 2011 issue of The New York Times, noted that most of us feel better if we make, say, $100,000 if the majority of our neighbors make $75,000 than if we earn $150,000 when most of our friends bring in $200,000. The article notes that John Stuart Mill said: “Men do not desire to be rich, but to be richer than other men.”

Why is this important from a public relations standpoint? Because it relates to the environment in which we introduce our products and services and people’s needs to compare themselves with others within their peer groups.

For a retirement services company, according to the same article, for example, this could be very important, as its clients need to measure the amount of money they have put away compared to the norm. According to a vice president of ING Retirement, performing this kind of analysis gets people thinking about their situation, something they usually try to avoid. When they see the facts, a large percentage of them opt to take some positive action.

According to noted Harvard professor, David Laibson, “Comparisons to large groups of peers are often useful. It’s never the final word on what I should do, but it does give me food for thought.”

Is There Emotion In Business?

2011-12-15T13:22:00.008-05:00

It’s a question that has been asked for decades.

The implication is that doing the right thing, business-wise, means acting on the best business principles, not letting emotions get the best of you, thereby deterring you from the right course. BUT…is this how it really works?

Let’s face it. There is emotion in business, and we are all affected by it. And that can be a very good thing. Business is based on relationships, which build over time. They provide the passionate connection so often needed when major issues are at stake. They enable that instantaneous glance between two people who know by looking at each other the action they have to take. They provide the spark that moves and motivates teams. Emotions inspire loyalty to a cause. Emotions help unify leaders with their management and encourage collaboration. A business is a cause; people advocate for the brand, the product or service and a special way of doing business that represents that cause. All of the above are ways that positive emotions help businesses grow.

But emotions can also have a negative effect. Close relationships can tie you to a person who really does not want to or can’t execute the plan that needs executing; emotions can delay your making a change. Emotions can lumber you with an executive who has Peter Principled out, and thereby hold back the growth of the firm. Family or romantic involvements can be stumbling blocks if disciplined leadership is not in control. Long term employees — where attachments are strong — who are no longer serving the purpose they once did and need to be redeployed or laid off can create cost issues. Making policy exceptions for an employee you like is not wise when you would not do the same for one for whom you have less affection. And the list goes on.

Positive emotions that are consistent with building businesses and inspiring success are always effective. If a demonstration of humanity is required, it may trump all economic considerations. While emotions should not get the best of you, they need to be considered in every situation. The real question is what is best for the business?

Innovation Momentum

2011-12-12T16:49:00.004-05:00

I believe it is the responsibility of public relations counselors to focus their clients on innovation, defined by Webster’s Dictionary as the introduction of something new. Without innovation, there is no growth and there is no future.

This is the time of year, of course, when many companies are finalizing their plans for 2012 and are igniting innovations which have been under development for many months. Public relations’ role is not only to communicate these innovations to target audiences, but also to guide clients to keep the innovative process moving forward in the new year. I call it “innovation momentum,” and it needs to be sustained if a company is to maximize its ROI and produce new revenue streams.

“People tend to see innovation strictly in terms of revolutionary, breakthrough products,” said Paul Polman, CEO of Unilever, UK, in PwC’s 14th Annual Global CEO Study. “That’s fine,” he added. “But most innovations are the result of steady, continuous improvement.”

The innovative process needs to touch every dimension of the company, from marketing and finance to human resources and customer engagement. All processes in the aforementioned areas need to be examined both globally and locally. For example, says Louis Camilleri, chairman and CEO of Philip Morris International: “Innovation goes way beyond just the products. It’s the way you market the product, the way you sell the product, and the whole aspect of customer engagement.”

Today, it is particularly the consumer product companies that are putting customers at the center of innovation, involving them in product design and service development. Technology (i.e., mobile phones and social media) is accommodating this opportunity But other stakeholders need to be taken into the innovation fold as well.

The study points out that 79% of the CEOs in the 1200 companies surveyed believe innovation drives efficiencies and leads to competitive advantage. A similarly high percentage (78%) believes that innovation also delivers higher revenues.

The foundation for all of this to happen is the right culture for innovation to thrive. I would describe that as one where ideas can be expressed freely to people on every level, mistakes are tolerated, logical strategies are tried, research and development is funded, reasonable risk taking is encouraged, partnerships are valued and individuals are rewarded for their achievements.

The "E-Mail Effect" — And Its Impact

2011-12-08T17:30:00.002-05:00

The subject is old, but this is possibly a new — or at least a different — perspective on it. The issue is what I call the "e-mail effect." It relates to the words you use or the reaction you elicit when e-mailing on a sensitive (or even a not-so-sensitive) subject.

Here is an example of an e-mail exchange between two people: "Are you prepared for the meeting tomorrow?" Answer: "I think so." Reply: "You THINK so? I hope so! Well, send me what you prepared!"

You can almost feel the anxiety level rising in that exchange. The "I think so" might have been a totally innocent comment echoing full preparation, but it could also suggest that there was doubt about just how thorough the preparation was.

Here is the point, according to the book HOW: Why HOW We Do Anything Means Everything…in Business (and in Life), by Dov Seidman: "Technology connects us more than ever before, but those connections are more fractured and incomplete than we are accustomed to. Missing are many of the clues [such as body language and facial expressions that] we need to fully decode the intentions of others."

Before the era of email, blogs, Facebook and Twitter — and particularly if we were communicating in person, over the phone or via handwritten letters — "the pace of information flow allowed enough time for even time-sensitive writing to receive a modicum of consideration before being sent. Not so with the various gizmos and gadgets we now find strapped to our belts or planted on our desks," says Seidman.

He calls it the Expectation of Response Factor. I would call it the Expectation of the IMMEDIATE Response Factor: a hasty reply is often desired — or required — over a more thoughtful response, delivered after due deliberation. Either way, the Response Factor influences the quality of our communication…and not always in a positive way. Electronically, the vibes are harder to interpret. Miscommunications can occur. Improper conclusions can be drawn.

That’s why I try to avoid discussing sensitive or complex issues via e-mail exchanges. I want to encourage more dynamism and give-and-take — and less pressure.

Of course, people can be taught to communicate more effectively electronically by learning to be sensitive to the agenda on the other side of the table. Nevertheless, for critical discussions, nothing beats a face-to-face encounter.

The Best Career Advice: From Award Winning Professionals

2011-12-05T16:37:00.008-05:00

“What was the best career advice you received?” was a question asked of award-winning Public Relations professionals at the recent PR News’ People Awards. I found the following comments important primarily because they came from people who have been extremely successful, and these are among the principles that have contributed to their success. Here they are

Clients don’t care about how much you know until they know how much you care
Going above and beyond is what gets you attention
Never stop learning
People may not remember you for what you do but rather for how you make them feel
It is always best to be a first-rate version of yourself than a second-rate version of someone else

What is the best career advice you ever received?

When Is An Apology Effective?

2011-12-01T16:08:00.002-05:00

What weight hath an apology?

It depends on whether it is an effective apology or an ineffective one. How would we rate Tiger Woods or Joe Paterno and the many others who have issued statements of regret? Do they qualify as effective?

Not as effective as they could have been.

Misstatements are made frequently, not only by celebrities, but by captains of industry and leaders of firms. As public relations counselors, we advise clients on how to apologize with impact, gradually converting potential enemies into friends.

The staff at Makovsky recently had the good fortune to discuss the particulars of an effective apology in a discussion led by John Kador, author of the book, Effective Apology.

Fundamentally, the person who recognizes that he or she has offended someone (or a whole group of people) must value the relationship more than the need to be right, in order for the apology to be truly effective, Kador says — and I agree. If you can occupy that space, the value of the relationship will increase… particularly in the US, where people are generally forgiving of mistakes, if you fess up quickly.

If you want to start rebuilding trust: Tell it fast. Tell it first. Tell it all. Tell what you are going to do about it to change.

Woods, Paterno and a whole host of others violated these rules. Despite their simplicity, I see them violated over and over again.

Kador says the following are essential for an effective apology:

•Recognize and specify the offense.
•Take complete responsibility.
•Remorse is required — you must say “I am sorry” or “I apologize.”
•Never use conditional words or the passive voice (e.g., “sorry if I offended you,” “missteps were made”).
•Offer restitution for the offense (e.g., “I will only practice and sanction ethical behavior”).
•Finally, live up to the promise. If you violate it again, you are dead meat.

In conclusion, an effective apology is not cost-free; it’s just less costly.

The Internet: Everything Has A Price

2011-11-28T16:25:00.004-05:00

A new book about an old problem: Has the internet become an “artistic wasteland” where content has been devalued by distributors who get a free ride? In my opinion, the answer is a resounding “yes!”

The book, Free Ride, by Robert Levine, is worth singling out, because it addresses how the culture business can fight back. While I have not yet read the book, I am highlighting and commenting on the review I read in the Sunday Book Review section of The New York Times, simply to give Levine’s strategy a further airing, as we all consider a solution to this problem.

The issue, Levine says, is “between the media companies that fund much of the entertainment that we read, see and hear and the technology firms” who want to distribute the content, legally or otherwise. The free-riding distributors “reap all the economic benefits of the Internet by cutting prices and the culture suppliers are forced to cut costs in response.”

The crux of the problem is copyright laws which are poorly crafted and hard to enforce, allowing this situation to develop. Further, the review points out, copyright protections have become illusory in an age when movies and music are available on pirate sites even before they are released. Thus media companies have little leverage when negotiating with distributors, whom Levine refers to as “digital parasites.” A startling example is that despite the growth of online audiences, recorded music in the U.S. was worth $6.3 billion in sales in ’09, less than half its value a decade earlier, the review notes.

Levine’s solution is the European model, which has a long history of supporting its culture business and taking a strong stand against piracy. Primarily, it is likely that its copyright laws are enforceable. Rather than filing mass lawsuits against individuals who upload pirated material, the review suggests, European regulators bring down the most flagrant violators among distributors. Levine also cites France for its blanket license which adds fees to internet connections, enabling a division of the money collected between the distributors and the artists.

Levine concludes that while the status quo may benefit consumers in the short term, the internet will eventually become dominated by cultural amateurs — a “world where music, TV, and journalism are virtually free, and where all of us get what we pay for.”

Penn State Turnaround

2011-11-21T16:29:00.007-05:00

On November 9, Penn State head football coach Joe Paterno announced his retirement, effective at the end of the season, and added an eloquent apology to the children and families devastated by the repeated instances of child sexual assault allegedly committed by former Penn State assistant coach Jerry Sandusky. In his statement, Paterno said: “I am absolutely devastated by the developments in this case. I grieve for the children and their families, and I pray for their comfort and relief. … With the benefit of hindsight, I wish I had done more.”

It was a case of much too little, way too late. Within a few hours, Paterno and Penn State president Graham Spanier were summarily fired by the school’s board of trustees.

Last Thursday, in my blog, I wrote that “there are there are actions that can be taken to begin turning the situation around.”

So, what actions should Penn State take that would signal the beginnings of a turnaround?

First and foremost, the school should audit the students, professional staff and other employees to ensure that there are no other looming issues which could explode on the heels of these sex crimes. And they should be prepared to publish the results.

Next, Rod Erickson, the new president of the university, should publicly apologize to the students, faculty, other staff, parents, the community, the athletic teams and all other stakeholders for the mistakes the university made in this debacle. The apology should be publicized nationally via its website and student, alumni and news media, both social and traditional. And it should be more than “I’m sorry.” Erikson made a start, last Monday, on the Penn State website, but, in my opinion, fell short in terms of detailing the practical ways in which the university plans to make amends to the people who have been hurt by its previous mistakes.

Thirdly, make ethics (or “Honor”) courses mandatory for students, faculty, coaches and any other university personnel whose poor choices could compromise gains made by the university from here on in. The throngs of student rioters have their values and mores misplaced. Hopefully, this kind of training can set them right.

There are another 100,000 victims of the scandal: the children served by The Second Mile, the Pennsylvania nonprofit founded by Sandusky and from whose ranks he apparently selected his victims. Its president has resigned and the charity, which is currently under investigation by the Pennsylvania Attorney General's office, may not survive. In my opinion, Penn State should identify charities with impeccable credentials (e.g., the Boys & Girls Clubs of America, Big Brothers Big Sisters of America, Children's Defense Fund and KaBOOM!) and support one or more of them with funding and volunteers.

Thoughtful action is essential to heal the wounds and restore Penn State’s reputation.

Penn State: Whose Fault Is It?

2011-11-17T15:51:00.003-05:00

National advertisers are pulling out of Penn State.

While this is not surprising to those of us in the business of reputation management, some may wonder why leading brands want to avoid the link with Penn State, as an institution, when it appears that the horrible sex crimes were committed by one person there.

Well, in my opinion, there are two primary reasons for the mass exodus of Penn State’s national corporate sponsors: 1) the nature of the transgression and 2) the university’s reaction to it.

The alleged crimes – which involve the ongoing sexual assault of children were compounded by the fact that reports of the abuse (by the children themselves, their parents and Penn State employees) were repeatedly ignored and covered up by the university, according to the Grand Jury Report, making it a university issue.

When action was finally taken, which included firing Joe Paterno, the legendary football coach, and cutting ties with Jerry Sandusky, the alleged pedophile, Penn State students responded by rioting. If you are a major corporation looking to enhance your brand equity, these are not the sort of people you want as your brand ambassadors.

As I noted in my recent interview with the Philadelphia Inquirer, Penn State will likely be a risky investment for potential advertisers for some time to come, as the story’s not over and litigation will probably keep it alive in the near term. It is an unfortunate situation for a university whose motto is “Success with Honor.” However, there are actions that can be taken to begin turning the situation around. The question is whether and when the university will begin to act.

High-Performing Women in High Tech

2011-11-14T15:15:00.001-05:00

“I’d never want a woman for a boss!” “Women are too competitive with each other!”

Unfortunately, these are old workplace stereotypes that I’d hoped had finally been laid to rest. Nevertheless, they were cited in a panel of female technology and internet entrepreneurs at Makovsky + Company on November 9 as among the images that today’s women have grown up with that have held many back. Still -- a glowing story was told in the outstanding track record that entrepreneurial women in technology and the internet have already achieved.

Makovsky sponsored the program, “Do Women Dominate the Web?” for Women 2.0, whose mission is to inform, inspire and educate a new generation of females that are entrepreneurial, innovative and successful. The panel was led by noted CNBC reporter Seema Mody. About 60 Women 2.0 members and guests attended.

“My generation of women knew they could be lawyers and doctors,” one panelist said, “but they did not even think about the possibility of starting a business.”

But things have been changing. One of the panelists pointed to a recent survey by Illuminate Ventures, an early stage venture capital firm based in San Francisco, which studied high-tech female entrepreneurs over the past decade, and concluded that women are on the cusp of becoming a leading entrepreneurial force in technology. Among the findings:

• Organizations which are the most inclusive of women in top management achieve 35% higher ROE and 34% better total return to shareholders versus their peers.

• High-tech companies built by women are more capital efficient than the norm, with the average company achieving early year revenues using one-third less capital.

• Women-owned businesses are more likely than the average to survive the transition from raw start up to established company.

• Women-owned or -led tech firms are the fastest growing sector of new venture creation in the U.S.

• In the past 10 years more than 125 companies with over 200 women co-founders or officers have achieved IPOs of >$50 million M+A exits in the U.S. high-tech sector.

“We need more and more role models that are written up and talked about,” one of the panelists said. “We need to learn from each other and be mentors to others. My daughter feels she can be anything and do anything – even start a company! What a change!”