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 25, 2006

Where's the Brief?: Okay, I guess I can understand how Illinois Governor Rod Blagojevich could not know that The Daily Show was a spoof. But aren't there media professionals who are supposed to brief him about these things.

As it happens, the clip doesn't make Blagojevich look that bad, especially compared to the pharmacist (who was in on the joke) who claims it's against his religion to prescribe certain drugs. Perhaps a different career would have been a smarter choice then.

Thursday, February 23, 2006

The Holmes Report, the World’s Leading Blog…: I just got a press release. I won’t identify the company or the agency that sent it, in part because I have no wish to embarrass anyone and in part because what annoyed me was so commonplace that it could have been any company, any agency.

The first line indicated that “XYZ Corporation [which I had never heard of], the world’s leading provides of [some obscure service], had retained ABC Agency to handle its public relations.”

I have no way of knowing whether XYZ Corporation is in fact the world leader in whatever it does. I don’t really know what it does and I don’t know how the company and its agency are defining the word leader. Is it the biggest in terms of sales? Does it have the most advanced technology? I assume it’s neither of those things, because if it was they could have told me and it would have been information I could have used, whereas “world leader” is a term so vague and boastful that I have to edit it out.

It seems to me the first thing a PR firm should do when it’s named agency of record for one of these companies is explain, politely, how stupid it is to go around using a phrase like “world leader” in a press release. Most journalists are going to edit it out; if they don’t, it’s still not going to provide any useful information to an end-user of the news, except to suggest that the company in question has an obnoxious self-regard.

Why do PR firms allow this kind of language into press releases? Because there are a handful of reporters out there too lazy to edit it out? Because they believe somebody’s going to be impressed? Because they don’t want to annoy the client? Because they genuinely don’t know any better?I’m serious. I really want to know. I assume some of you work for agencies, and some have probably included some similar phrasing in a press release. Why?
Just in Time for the World Baseball Classic…: Todd Defren has launched The Good Pitch Blog. Though it turns out it’s a different kind of pitch he’s interested in. Launched partly in response to Richard Laermer and Kevin Dugan’s Bad Pitch Blog, (although it, despite the name, accepts good and bad pitch examples), the new blog is looking for examples of good pitches, press releases, etc.

Defren says that “despite some well-publicized examples to the contrary (payola, badpitch blog, etc.), there are plenty of great PR pros out there, doing good & honest work in the media and blogosphere.I've started a cheerleading section…. I am happy to promote all agencies' great work and great people,” he says, “in the hopes that people new to the PR game can eventually look to this blog as a resource.”

As you’ll gather from my next post, I am all in favor of improving the quality of pitches.
How to Be More Strategic: I heard a story at lunch that speaks volumes about the way corporate America works.

My companion had once met with the head of communications for a major corporation, which had paid hundreds of thousands of dollars to a management consulting firm to analyze where it was going one. The consultants’ conclusion: the company was not strategic enough. The company’s response: it changed everyone’s title, so that the director of communications, for example, was not the director of strategic communications.

Problem solved.

I’m fond of telling people that public relations is used to only a fraction of its potential by most companies, and this story illustrates one reason why. Many companies would rather make superficial changes—designed to fool their constituents and sometimes, I suspect, even themselves—than do the hard work needed to really change not just what you say but who you are.

This particular company, of course, was taking that tendency to an absurd extreme.

Wednesday, February 22, 2006

Persistent Payola: The U.S. military is still doing all it can to undermine American credibility in Iraq.
This is Why No One Trusts the Pharmaceutical Industry: GlaxoSmithKline’s employee ambassadors are going to have a hard time convincing anyone who reads this Wall Street Journal front pager that the pharmaceutical industry deserves a better reputation.

The Journal reports on a new blood substitute developed by Northfield Laboratories. In a recent clinical trial, 10 of 81 patients who received the fake blood suffered a heart attack within seven days. Nevertheless, the company and the FDA have decided to push ahead with clinical trials. I don’t have a problem with that. If experts believe this a promising new treatment, it should be tested.

What I have a problem with is that way the company is going about it. The company will not seek the consent of patients before treating them with the experimental blood (many of them are unconscious at the time, although that doesn’t mean their family or loved ones could not be asked for their consent).

Even worse, according to the Journal: “In lieu of patient consent, the 31 medical centers testing the product are required to carry out community-awareness campaigns about the trials. Several hospitals have told community meetings that previous trials showed PolyHeme to be safe, failing to mention the 10 heart attacks in their printed materials.”

This is, in other words, the very opposite of informed consent: it is misinformed non-consent. And it is completely indefensible.

That doesn’t mean the company won’t try. The Journal quotes Northfield CEO, Steven Gould: “Our experience suggests the risk-benefit balance is in the patient’s favor.”

That may very well be true… but it’s not the company’s decision to make. Guidant made a similar defense over faulty defibrillators. It’s a defense that suggests the company patients to trust a large, not-entirely disinterested corporation to make health decisions for them. Worse, that same company doesn’t trust them with the information they need to make the decision themselves.

The final twist: “Northfield says any American who doesn’t wish to participate in the current PolyHeme trial should ask the company for a blue plastic wristband that would alert paramedics.” In other words, any patient who has read The Wall Street Journal story, and ignores the company’s own evasive “community outreach” and is therefore well-informed enough to opt out can do so.

This kind of behavior makes consumers skeptical about the entire industry. And that fact this behavior is permitted by the FDA undermines confidence in regulatory mechanisms that ought to be the foundation of trust in the industry.

Tuesday, February 21, 2006

Kudos to GlaxoSmithKline: Years of pharmaceutical industry image advertising has done little or nothing to halt the steady decline in public perception of giant drugmakers, in part because I suspect it’s been directed to answering a question no one asked. Most of the industry’s ads focus on its track record of innovation, which is indeed remarkable, and a major contribution to the health of our society.

But no one is criticizing the industry for its lack of innovation. Critics are more concerned about two issues: cost and safety. And the industry has done little to address either. Stories like this one about a $100,000 a month cancer drug and continuing coverage of Merck’s problems with Vioxx do more to shape public perceptions than any of the industry’s ad campaigns.

But now GSK is putting together a program that involves changing the message and—perhaps more important—the messenger. This is an issue on which credibility is key, and sending out employee ambassadors is likely to be much more effective on that front than an advertising campaign. Simply put, advertising is not only unsuited to addressing credibility issues, it’s often downright counter-productive. (“How come they’re spending all of their profits on glitzy ad campaigns?”)

Michael Pucci, the company’s VP of external advocacy, says that when employees go out into the community to put a human face on the company, “the majority of questions the reps receive revolve around pricing, and he has given them what he calls a ‘learning system’ that takes 50 minutes to master and will enable the rep to satisfy queries about the company and the industry.”

Turning employees into active ambassadors—whether online or off—might seem like a risky strategy. One of the GSK rivals is quoted in the article: “I’m not sure I want 8,000 people on the ground given that level of responsibility to basically speak for a company and an industry. With that many, the odds say there’s going to be a percentage of them—however small—that will make a mistake, or stray from the script, or whatever.”

The reality he seems to be missing is that employees are speaking for your company and your industry every time they open their mouths. Surely they will do a better job if they are given the tools and training to do it effectively.
Firing Your Clients: Todd Defren of Shift Communications has an interesting blog post (hat tip to David Jones) about his recent decision to "fire" several of the agency's clients--in each case because the account demanded over-servicing and "we felt that our team members were not getting the respect that they richly deserved from these clients."

Good for him, although the "flabbergasted" reaction of some of these clients notwithstanding, I think this kind of thing has become more common in recent years.

The first time anyone ever paid me for a consulting assignment, it was to find out why they were hemorrhaging people at such an alarming rate. It usually comes down to bad managers or bad clients, and in this case it was clearly the latter. I sat down with the CEO of the firm and we went through the agency's 50 or so clients one by one asking three questions: is the account profitable; is the work interesting; and does the client treat our people with respect?

It was fascinating to me that when the answer to one of those questions is "no," the answer to the other two is almost always the same. This firm had three or four clients who failed all three tests--getting rid of them should have been an easy decision, and to her credit the CEO did. I spent the next six months worrying that I had counseled my first client into bankruptcy, but the decision paid off: a re-energized staff quickly replaced the lost revenues and was motivated by the CEO's decision to place their interests first.

Now I would advise every agency to perform such an analyisis on a regular basis. I have never heard of an agency executive who regretted a decision to fire a client made for the right reasons. h
Where's the Shame?: Leslie Gaines-Ross links to a study by Stanford and Wharton business school professors showing that media coverage of excessive CEO compensation has little or no impact--at least in terms of reducing compensation to more acceptable level. She's surprised. Me, not so much. I've argued that CEOs should be forced (okay, encouraged) to fully disclose their compensation in their internal publications, and to explain to their employees why they deserve whatever they receive--especially if it's going up at a time when everyone else's salary is going down. But increasingly I think this is a group that's impervious to shame: the only people whose opinions matter to CEOs are other CEOs and boards of directors.

ADD: Steven Silvers over at Scatterbox looks at the new SEC rules on disclosure and wonders if they'll make a difference. Don't hold your breath.

Monday, February 20, 2006

Hit or Miss: Shortly after the movie “The Insider” came out (the story of Brown & Williamson whistleblower Jeffrey Wigand) came out, I sat down for dinner with a few friends. We chatted about the movie, and the implication that someone employed by the company had threatened Wigand’s life. None of them found the idea that a major American corporation would hire a hit-man remotely implausible. Most assumed that such decisions were, in fact, fairly commonplace.

These were not stupid people. One was an (occasionally) working actor, another a respected and published academic, one owned his own small business. But they had all been conditioned by popular culture to believe that giant corporations would not hesitate to eliminate an individual who stood in the way of their profitability. (If you want to understand where such paranoia comes from, rent The Constant Gardener, which is only the latest and most acclaimed example of the genre in which multinationals are the villains.)

I was reminded of this by a New York Times article about the best-selling memoir Confessions of an Economic Hit Man, in which former management consultant John Perkins claims that American companies routinely hire “hit men” (he says he was one) to bribe the leaders of emerging economies, and “jackals,” whose more sinister role is to take care of those who won’t be bribed. (The movie rights have already been bought, and it is apparently being viewed as a vehicle for Harrison Ford.)

“During an earlier time, that message might have been mere fodder for conspiracy theorists and fringe publishers,” says the Times. “But now, for all of Mr. Perkins’s talk of fiery plane crashes and corporate intrigue, his book seems to have tapped into a larger vein of discontent and mistrust that Americans feel toward the ties that bind together corporations, large lending institutions and the government.”

It’s no secret, of course, that corporations enjoy a tarnished reputation. And since some of those whose reputations are most tarnished (Exxon, anyone?) continue to make massive profits, it’s reasonable to ask why they should care.

But this level of distrust does create significant friction. It makes it harder to recruit bright and idealistic young talent; harder to get planning permission for new factories and facilities; harder to fight off proposed regulation; harder to defend your company in court.

I believe it is at least partly a product of the Milton Friedman-Wall Street Journal view of business, the one that says the only social responsibility of business is to make a profit, that insists the free market, operating amorally, produces outcomes that are moral and just. Managers who insist that their role begins and ends with making a profit and creating wealth for their shareholders are simply playing into this kind of cynicism.

For most people, it’s a pretty short step from the current corporate dogma that companies have no broader social responsibility to the idea that corporations will do whatever it takes—inside or outside the law—to make money for their shareholders. Friedman and his fellow free market fundamentalists can argue until they are blue in the face that “greed is good,” but the profit motive makes people suspicious, and unless companies can begin to show that they are motivated by something other than filthy lucre, they are always going to be regarded with suspicion, cynicism and hostility.
Generous Companies: Twenty years ago, a British journalist called Tom Lloyd wrote a book called The Nice Company, in which he suggested that “nice” companies would finish first. It wasn’t a bad book, although I’ve never really believed that niceness was something to aspire to. Now, WPP-owned design consultancy Fitch has come up with a similarly vague notion—the “generous” brand—and claims that a new generation of such brands is capturing the hearts and pocketbooks of consumers.

This Guardian article does little to explain the firm’s methodology, and I could find nothing at its website, but apparently its research shows that 62 percent of people are disillusioned with traditional companies, and that they are embracing brands like Innocent (a really cool British company that makes wholesome smoothies), Amazon, Starbucks… and Apple!

“There is disillusionment with brands, especially larger companies, [which are] not doing as much as they used to for consumers,” said Tim Greenhalgh, the managing creative director at Fitch. “A new generation of consumers are looking for brands that have a generosity of spirit, attitude and personality.”

Just how Apple—notoriously secretive, quick to sue anyone who even frowns in the vicinity of one of its products, with appalling service and the kind of command-and-control communications culture that appears terrified of anything resembling a conversation—makes the list is a mystery.

If anyone has access to the original research, though, I’d love to see it.