Holmes Report Blog

The Holmes Report blog focuses on news and issues of interest to public relations professionals. Our main site can be found at www.holmesreport.com.

Saturday, February 11, 2006

Control Freaks: Via Beyond Madison Avenue's Mack Collier, Coca-Cola is sending half a dozen college students from around the world to blog the Olympics, but it has imposed conditions: nice, happy, upbeat stories only! Says Mack: "[They're] not bloggers, they are members of your PR team. Let them actually post about their experiences, and not type a commercial for the event, then they'll be bloggers."

Coke's a sophisticated company. It can work this out for itself. But there's a continuum in corporate communicaions with credibility at one end and control at the other, and you can't get the former without surrendering the latter. And that's exponentially more true in the blogosphere. This isn't even PR; it's advertising. Coke is paying these kids (at least with travel expenses) in exchange for their favorable commentary.

When are marketers going to figure out that credibility is more valuable than control; that earned praise is more valuable than paid-for self-congratulation?
Disgrunted Employees: Read this note, then think about how many CEOs you've worked with who deserve to arrive at work one morning and find something similar, signed by the 50,000 people who have lost pensions and benefits while executive salaries grew exponentially.

Friday, February 10, 2006

Command and Control PR: Sathnam Sanghera, writing in today’s Financial Times (hat tip to reader Mark Pinsent in London, who sent me the link even before I received my news alert from the FT) suggests that the growing power of PR people might be the reason CEOs are less willing to talk to him than they used to be. And since he writes with his usual good humor and fairness (“As with journalists, I have found that some PRs are excellent, while others have the charm and wherewithal of baboons”) it is probably worth paying attention.

I’m in Athens right now, speaking at a conference on Homo Consumerus, and on the flights here I managed to read most of Robert Scoble and Shel Israel’s Naked Conversations, in which much is made of the “command and control” school of public relations, which the authors insist is being rendered redundant by the transparency of the Internet.

I was planning to offer a mild rebuke in my eventual review, to the effect that good PR people have always understood the importance of transparency and that any PR that attempts to exercise “command and control” is and always has been just bad PR. But Sanghera’s piece made me realize that my idealized view of this business ignores the fact that many (perhaps most) PR people do try to control access to the CEOs, often to an absurdly trivial level: “Last year, for a pretty inconsequential piece on executive cars, I called around the offices of eight leading chief executives to find out what vehicles they were driven in. All but two declined to comment.”

In most cases, I guess, the PR folks are just doing what their CEOs want, but the result is that in the cause of avoiding controversy they strip away any sense that the company is a collection of (flawed) human beings and reinforce the notion that it’s a huge, faceless, emotionless collective: the Borg. This does the company no favors. And those who practice PR this way are going to find it very difficult to adapt over the next few years.
When Hiring a PR Firm Generates Bad PR: Students of storytelling inform us that there are only a finite number of stories in the world and that those of us who work with words are merely re-telling them with minor variations. I was reminded of the truth of that notion when I came across this hoary old chestnut—troubled organization slammed for plan to hire PR agency—in the South Florida Sun Sentinel.

The “news” in brief is that Lake Worth City Council has been under fire over rising electricity costs and land use issues. It wanted to hire a New York PR firm for $63,000 to “improve the city’s image in the community.” Residents objected. Said one: “You’re bringing someone in to fan away the stench of what’s been created in Lake Worth.” Added a City Councilwoman: “There’s a problem, but I don’t think the media is the problem. They only print what we say and how we act. The problem is us.”

I’m reminded of an interview I had with a reporter from the Cleveland Plain Dealer earlier this year about the West Virginia mine owner’s decision to bring in Dix & Eaton after the fatal collapse and failed rescue operation (the resulting story is here). At one point, he questioned why the company needed a PR advisor if all it planned to do was tell the truth.

I made the point—the Plain Dealer apparently considered it challenging enough to highlight as its “Provocative Quote of the Week” in an internal newsletter—that PR firms were often brought in to manage the media not because an organization was seeking to “spin” the facts (or “fan away the stench”) but because “Journalism is not always a truth-seeking exercise. Sometimes it's a headline-seeking exercise.”

If you’re accused of a crime you didn’t commit, you don’t eschew the services of an attorney just because you plan to tell the truth. Similarly, if you’re accused in the court of public opinion, you can’t assume that openness and honesty are enough to win the day. There are always people out there who are interested in making you look bad, and sometimes they have the media on their side.

But the main point is that good PR firms don’t “fan away the stench,” they look for the source of the stench and try to eliminate or reduce it. They also listen to what those who complain about the stench are saying, assess their expectations, and relay those expectations to their clients. They understand that the best way of making a client look good is to help it do good.

Sadly, the image of our profession is such that in stories like this one the underlying assumption is that the very decision to hire a PR firm is indicative of a desire to deceive, manipulate and spin.

(By the way, does anyone know where the phrase “hoary old chestnut” comes from and more to the point why it is used to describe a journalistic cliché or stale old joke?)

Thursday, February 09, 2006

Scientific Judgment and Value Judgment: The Wall Street Journal, predictably, frames the World Trade Organization’s ruling against a European Union ban on genetically-modified food as “a blow for science over scare-mongers.”

As it happens, I believe genetically-modified crops have tremendous, perhaps transformative potential. If that potential is realized, they could conceivably provide a solution to the worst of world hunger. But I don’t think the cause of spreading the technology is well served by the Journal’s presumably willful distortion of the debate.

First, the WTO ruling was considerably narrower than the editorial would have you believe: it does not impact current EU guidelines, which are still extremely conservative in terms of approving GM foods.

But more to the point, it deliberately obscures the difference between scientific judgments and value judgments—echoing much of the distorted discussion of “junk science” and “sound science” propagated by corporate interest groups in the U.S.

The fact is, there’s relatively little disagreement between the U.S. and Europe: neither side believes there is any scientific evidence that GM foods are harmful. The disagreement is over what to do with that information. The U.S. believes the absence of evidence should give companies a green light to push ahead; the EU would prefer to wait for more evidence. That’s a value judgment, not a scientific one—and the Journal is smart enough to know the difference. If it wants to criticize European values, that’s fine, but framing the issue as a scientific one is just rhetorical posturing.
Baby Steps Into the Blogosphere: Bob Langert of McDonald’s just posted to his social responsibility blog on the subject of a new and “iconic way of putting nutritional information on our packaging,” which features “five key elements that will help customers more easily understand their choices at McDonald’s.” He goes on to tell us that “this is a watershed initiative because of its transparency.”

First of all, I want to applaud McDonald’s, which I think is trying to do the right thing, both by addressing the issue of dietary choice in a serious manner—applying the principle of informed consent—and by creating a blog, with comments and everything, and thus making itself more open.

Blogging about this is nice (although I could do without the company telling me how transparent it is) but it feels like a missed opportunity. Bob posts the new nutrition label and asks for our feedback. But imagine how interesting it would have been to use the blog to help customers and critics design the nutrition online. Now that would have been transparent.

The company could have posted several alternative designs, had internal champions—nutritionists and PR people and marketers—discuss the pros and cons of each one, and invited outsiders to explain what they found helpful and why. They could have allowed their customers into the discussion and the design process. They could have challenged their critics: “You say we are not sharing enough information; tell us what you think we should say.”

Not only would it have underscored their commitment to a new way of doing things; it would have generated massive, positive media coverage.

Blogging to tell people what you’re up to is a good start. But blogging that involves them in what you’re up to is the future of public relations.

Wednesday, February 08, 2006

Don’t All Hop on the Bandwagon: The Media Center has “morphed” its group blog, morph, which includes postings by several PR execs, including Ketchum’s Paul Rand, Weber Shandwick’s Chris Perry, and the alarmingly prolific Steve Rubel. Paul has an interesting post about a recent panel he moderated featuring executives from IBM and McDonald’s extolling the virtues of blogging.

“I was surprised how progressive these leading companies have become on the topic. Everyone of them articulated—and seem to be following—the need for ‘transparency’ in communicating both internally and externally…. The audience was feverishly taking notes during the discussion. You could see it in their faces: If IBM, McDonalds and others get this, they’d better go on board quickly too.”

Not too quickly, I hope. The line between getting on board and jumping on the bandwagon is a fine one, as I believe we saw during the first Internet revolution. I can’t help thinking that we’re going to see a flurry of companies starting blogs because everyone else has one, without thinking through the consequences or (more to the point) the commitment to transparency and dialogue that’s necessary. Those blogs will quickly be seen to be inauthentic, and the companies will do themselves more harm than good.

I know it’s Paul’s job to help companies get this right, but too many companies prefer short cuts to long, arduous journeys, particularly if those journeys require (as the journey to blogging does for most companies) a cultural change. It’s why more companies would rather donate a few million dollars to charity than become holistically socially responsible. It’s why they’d rather spin than invest the time and energy necessary to build relationships.

Years ago I visited with Southwest Airlines, and one of the company’s HR people told me that every now and again it hosted an open day for executives from other companies to talk about its wonderful, unique culture. The outsiders would listen to stories about the importance of treating people with dignity and making a sense of humor a requirement for new recruits, and then ask questions like: “Do you call your people employees or associates.” They thought they could learn the words without bothering with the music. But the magic is in the music.

The same is true of blogging. And I think a lot of companies are going to sing off-key… prompting a Simon Cowell reaction from their readers.
Welcome...: Mike Swenson, who runs Barkley & Evergreen in Kansas City, has started a blog. Mike's firm has quietly built a very nice reputation in the cause marketing world, so expect quite a focus on that growing niche. I like his idea about taking some of the money you might ordinarily spend on Super Bowl advertising, donating it to a worthy cause, and then using an ad to promote that cause. Why not? Dove used the Super Bowl this year to announce a cause related addition to its "Real Women" campaign, and I thought it really cut through what was otherwise an excrutiatingly mediocre mass of ads.
The Tyranny of High Expectations: My old friend Don Ferguson forwards me an article on the Enron trial that provides a fascinating—and horrifying—insight into the practice of investor relations today and the intense pressure CEOs feel to meet or beat analysts’ expectations. Enron’s former investor relations chief Mark Koenig recalls what happened when analysts increased their estimate of the company’s fourth quarter 1999 results, days after Enron closed its books for the period.

“‘I was kind of sick about it,’ Koenig said. ‘We had great success in keeping that estimate in line in the past.’ He said he was concerned ‘that there would be a significant decline in the stock price.’
“Koenig said he sounded alarms and called Enron’s accounting chief, who Koenig said also conferred with Skilling. Within hours, Koenig said, Enron had met the increased target—31 cents per share—even though books for the quarter had been closed for days.”

I have no interest in excusing or even explaining the behavior of Ken Lay and Jeffrey Skilling, which was egregious. I’d be very happy to see Skilling in particular serving long, hard time. But what Koenig is talking about here is a much bigger problem than Enron. Every CEO in America is under intense pressure to keep the analysts happy and failure to do—even for a single quarter—can wipe billions of dollars off a company’s value and cost leaders their jobs.

Not every CEO chooses to manipulate the numbers, of course, but many do and not all of them cross the line quite as dramatically as Enron appears to have done. Jack Welch achieved, as everyone knows, 100-plus quarters of profit increases at GE, and there are those who believe that “confusing but apparently legal gimmicks” played a part in the company’s ability to “master the quarterly earnings ritual with almost eerie efficiency.”

But I suspect that almost every CEO makes decisions that are not in the best interests of the company, its key stakeholders, and even long-term holders of its stock in order to meet those quarterly targets.
But If You're Going to Pose as a Rocket Scientist, You Do Need a Degree: George Deutsch, the NASA public affairs officer who tried to limit reporters' access to a top climate scientist and who instructed the agency's scientists to add the word "theory" every time they mentioned the big bang, has resigned. Apparently, the BA in journalism he claimed on his resume stood for "brief appearance," since the officials at Texas A&M say he never graduated.

Tuesday, February 07, 2006

Declining Fortunes: Christopher Hannegan mines the Fortune 100 Best Companies to Work For list for interesting trend data.
Organic Reporting: I do believe Leslie Gaines-Ross might have hit on something with her idea that social and environmental reports should be “living” things, written by employees and open to comment by friends and foes of the company. To a certain extent, that seems to me what McDonald’s is doing with its “Open for Discussion” blog.

Monday, February 06, 2006

Engaged: Steven Silvers notes Wal-Mart’s search for something called a “director of stakeholder engagement” and his first reaction is the same as mine, which is that this is just a fancy name for a PR person. If the company’s PR people aren’t engaging stakeholders, what exactly are they doing? (My second thought was that I should e-mail the FT’s Lucy Kellaway, whose column this morning deals with “creative” job titles: “livability theme manager,” anyone?

But Steve goes on to make an interesting point: “It's pure posturing to the CSR crowd, for example, to use the term ‘stakeholders’ when referring to all of the ‘non profits, non-governmental organizations, academics and government agencies’ that Wal-Mart's new director must engage. Sure, these are all critical relationships and influences to successfully building a brand and revenues.

“But these people don't have a ‘stake’ in Wal-Mart—not in the way that investors want increasing valuations, or in the way that a working mom wants her paycheck to buy as many corn flakes and school supplies as possible. Nonetheless, Wal-Mart will now label anyone with a potentially leveragable interest in the company's practices a ‘stakeholder’—not because they are, but because they want to be thought of as such.”

I posted my response at his site, but this is worth discussing: if someone believes they have a stake in your business, you’d better treat them like a stakeholder. Companies don’t get to decide who their stakeholders are—or whether those stakeholders are legitimate. If someone can impact your ability to do business—by withdrawing their labor or their custom, or by persuading others to do so, or by lobbying for regulatory change or community action—then you need to have a strategy for engaging with them.

As Steve indicates, there is a hierarchy of stakeholders. Shareholders, employees and customers are going the most important stakeholders in any enterprise, with legislators and regulators not far behind. In many cases, activists and academics will be a long way down the list.

Moreover, it’s important to remember that engagement does not mean appeasement. Not all stakeholders are interested in dialogue, compromise, or win-win solutions. Some of them may be out to destroy you or to undermine your business model. You don’t have to make nice with these people—there’s nothing one with confrontation—but you can’t ignore them.

Sunday, February 05, 2006

Maybe PR is Rocket Science, After All: At least, a 24-year-old press officer at NASA seems to think so. According to this New York Times piece on a new commitment to openness at the space agency, George Deutsch, who reportedly sent out a memo to scientists preparing a set of Web presentations about Einstein for middle-school students. The message said the word "theory" needed to be added after every mention of the Big Bang.

The Big Bang is "not proven fact; it is opinion," Mr. Deutsch wrote, adding, "It is not NASA's place, nor should it be to make a declaration such as this about the existence of the universe that discounts intelligent design by a creator…. This is more than a science issue, it is a religious issue. And I would hate to think that young people would only be getting one-half of this debate from NASA."

I know I have been an advocate for giving PR people a greater role in policy making, but even I draw the line somewhere. And a 24-year-old political appointee lecturing NASA scientists on what constitutes science is definitely over that line.

ADD: Nature magazine has an article that asks: "Has NASA's Press Office Gone Too Far?"

ADD: NASA administrator Mike Griffin makes it clear what he thinks about that question in a statement on scientific openness posted at the agency's website: "The job of the Office of Public Affairs, at every level in NASA, is to convey the work done at NASA to our stakeholders in an intelligible way. It is not the job of public affairs officers to alter, filter or adjust engineering or scientific material produced by NASA's technical staff."
Apple Arrogance: I’ve always believed that when it comes to humility, customer service and corporate social responsibility, Steve Jobs and Apple make Bill Gates and Microsoft look like paragons of virtue, so there’s nothing in this Joe Nocera article that surprises me, except that someone is covering the facts rather than buying into the cult.

“At this particular moment, of course, Apple is special, and it can get away with being arrogant. It has a product that everyone wants, and for which there is no serious competition.

“But it seems to me that Apple is on a dangerous course. Yes, it has strong incentives to minimize tech support, but to say ‘Not Our Problem’ whenever an iPod dies is to run the serious risk of losing its customers’ loyalty…. The day will come when the iPod has a major competitor…. At which point, Apple will reap what it is now sowing….

“A final note: You may have noticed there is no Apple spokesman defending the iPod or Apple’s customer support in this column. When I called Apple, wanting to know, among other things, how long Apple believes an iPod should last, I got a nice young woman from the PR department. She said she’d try to find someone at the company to talk to me. That was on Wednesday.

“I’m still waiting.”

By the way, if you want to know whether Nocera's article struck a chord, consider that on Sunday morning it was number one on the Times' list of its most e-mail articles... despite the fact that it's stuck behind the "Times Select" barrier, so only about one in a thousand Times readers can access it.