I'm in PR and I'm here to help. (Image by Thomas Hawk.)

Allow me to indulge in a fanciful scenario. You are a maker of product X. Out of the blue, it comes to your attention that your product is being accused of causing the deaths of those using the product.

You look into it, but you can’t confirm that is actually the case. Reports of deaths begin to increase, and front page headlines have confirmed for you that your product is at fault.

You look and look but you still can’t make internal confirmation that your product is dangers. The media and consumers have their minds made up. Your attorneys caution silence. PR people around the globe, however, have a recipe for you: You must speak. Openly and candidly.

You must apologize, they say.

Befuddled, you don’t know what to do. One the one hand, denial makes you look bad. Silence, even worse. But apologize? Okay, but for what?

“Should I apologize for something even if I can’t confirm that we are at fault?” you ask.

You can say you are investigating the problem. But deaths are still climbing.

You recall the product. Evidence of some potential problems arise, but nothing that would lead to the drastic claims being made.

Your hesitation to speak leads to legal actions against you. Costs to deal with the situation climb, exceeding millions of dollars. You are vilified in the press. PR people cluck and shake their heads.

“You did not get ahead of the issue,” they say.

“You didn’t express empathy for the victims,” they clamor.

“You didn’t apologize.”

The chorus of criticism is unrelenting.

Six months later, evidence and investigation results begin to trickle in. Overwhelmingly, the story is finally more clear: Your product did not not cause deaths. User error did.

The media has since moved on to other stories, other crises around the globe. A few nibble on the investigation results and cover your story, but the once passionate coverage is largely met now with silence. Consumers don’t care as much, and the “victims” … they too retreat.

The PR critics have also stepped away from the story. Their expertise is needed elsewhere. Having once expressed concern about your bottom line, and their PR remedy to protect it, their valuable advice is now needed for the current news crisis. You are old news.

Your product safety and your vindication, however, are barely noticed. You financial losses are staggering, and your reputation is in tatters and may never fully recover.

***

It would be nice if the above were science fiction. I am of course referring to Toyota, which has all but been vindicated by internal and external investigations, processes that take longer than dramatic news coverage will tolerate.

Yet, predictably, many raked Toyota over coals.

Communications consultant and leader Shel Holtz wrote the following in response to one of my posts:

“So companies should all behave like Toyota, allowing facts to be dribbled out over time so it seems there’s no end to the crisis? So it leads to government hearings? So it appears that they don’t give a damn about the people who have been injured? Leading to a groundswell of consumer backlash that pretty much goes, ‘I’ll never buy another Toyota?’”

Another drafted a list of compensatory actions that seemed to  assume news reports were accurate, saying that Toyota should apologize.

The list of heavy-hitters weighing in here appear as if they too believed headlines – that Toyota was at fault and avoiding the possibility that consumers were, perhaps, delusional or engaging in fraud. This is despite Toyota’s situation being eerily like Audi’s in the 1980s, when the company was ultimately cleared of wrong doing after dramatic and widespread claims of “sudden acceleration” in its vehicles.

I wrote the first piece on brand crisis in February, in which I attempt to debunk the traditional assumptions about responding to crisis events, especially when the salient facts are not available. My lead stated the predictable: When a major crisis erupts, the PR experts will readily provide their perspective on what should be done.

I missed what also should have been expected: When the issue of right and wrong is further muddied down the road, these experts will be less forthcoming with advice. More to the point, advice on dealing with fraud and deceit by both consumers and the press won’t be as widely available as their original invective.

I noted previously that despite PR’s lexical roots in warfare, it is a profession of bridge builders. With that in mind, organizations should considering calling in the damage control experts when a crisis erupts.

They should also consider putting a muzzle on their PR people.

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Question: Do you respond to anonymous attacks?

Answer: Most likely, no. If the attacks gain legs later as news stories, then you can respond to the issue, but not the attacker.

The rationale: The knee-jerk response from communicators is to communicate. This is often a counter-productive approach to take. When facing an attack, especially an anonymous one, there are many dynamics at play.

First, anonymous attacks, commonplace as they are online, speak volumes in and of themselves about the attackers. Who are they? Why are they anonymous? If attacks in general hold little credibility (they do) – as opposed to reasoned and informed dialogue – anonymous attacks offer less to take seriously. Attacks in general come from those who have usually made up their mind about people and issues. They attack because they are waging a war of ideology. They are not attempting to actually work with those who they criticize or to try to understand complexities of issues and perspectives or to come to any sort of mutual understanding.

Second, it’s now confirmed that anonymous attack forums are part of the news business model, one that appears to be borne as a survival strategy. Whereas newspapers would once spend time verifying the identity of authors to letters to the editor, media now appear to gladly provide forums to the uninformed and bitter. As newsrooms continue to shrink and be eliminated, the “anything goes” approach to increasing news site visitation and repeat pageviews can now be spun to advertisers as the maintenance of a “vibrant community.”

Finally, given the above, there is little credibility found in online news forums (and, frankly, the news itself doesn’t hold much weight in court)  and even less so among anonymous bloggers and Twitterers. While they can be entertaining and can serve a self-validating function for one’s own beliefs, bitterness and/or paranoia, at the end of the day it’s best not to feed into this cycle by simply not participating in it.

Second best would be to respond to issues on your own time and in your own domain. Any direct response to attacks only feeds an ever-hungry beast that news agencies seem desperate to continue to feed.

PR people should take the high road by not playing a role in this downward cycle of information dissemination – in most cases, by keeping their mouths shut.

Tulane T: Downloaded from www.tulane.edu

AAUP censure likely to be lifted

It was reported today that Tulane University is likely to have its censure lifted as it negotiates with its faculty and the American Association of University Professors.

I wrote two years ago about the debacle faced by Katrina-affected universities who were hit with censure by the AAUP for alleged violations of faculty rights. Tulane and other institutions were forced to reduce faculty in light of the disaster.

The AAUP claimed the institutions did so in a way that violated the rights of faculty. Tulane, however, rightfully fought back and posted its own version of the events, including documentation of errors in AAUP’s censure process and report. While I don’t take sides for either Tulane administrators or faculty, I found Tulane’s official response refreshing for the simple reason that too many institutions roll over in light of public criticism — or they simply don’t respond publicly at all.

Progress has been made since 2007, and it is reported that Tulane administrators and AAUP have been working to have the censure lifted. The complete story is here.

This Bike is a Pipe Bomb photo by Jeff Moser / Bike Carson on Flickr

Public relations’ Code of Ethics serves as a viable reminder for being honest not just in your professional life, but for life in general. Honesty, the free flow of information and accuracy serve as valuable credos for personal and businesses relationships.

Nothing exemplifies this more than the ongoing hubbub about appropriating content from other sources. Taking content from someone else for your blog, or other use, and not crediting the original source is a clear violation of PRSA’s Code of Ethics, yet far too many people do it.

Me included. Looking back on past posts, I have strived to cite sources as much as possible, but when it comes to mainstream news outlets, I have played loose with the ethics, mainly in using photos from the Associated Press or other global news outlets for my own posts.

While it can be argued that such use falls under the Fair Use doctrine – which is a considerable point, as Rogers Cadenhead knows too well from his noted controversy with the Associated Press – using such content without crediting the original source is clearly wrong.

I’ve fucked up. More than once. I know better too but I’ve been careless. From here on out, if I cannot find a suitable image to use for my posts, I will credit the original source if I use an image from elsewhere. If a concern is raised about even using the image, I will remove it. (Most, I’ve learned, are more than happy to see their content referenced, cited and even republished, which is a part of what being networked is all about.)

Another element to misappropriating content is taking it, using it without attribution and then claiming it as your own. This is what FOX News has done to Carson City, Nevada blogger Jeff Moser, which he just discovered.

Jeff writes about the bike culture in Nevada’s capital, Carson City. Jeff is a long time friend and he, to me, exemplifies citizen journalism or niche blogging. More importantly, he uses his blog not only to convey relevant and up-to-date information, but to connect with real people in real life and, in general, to improve the quality of life in Carson City.

One day Jeff noticed a bike parked at a coffee shop with a sticker that read, “this bike is a pipe bomb.” The sticker is actually the name of a punk band that apparently is put on bikes all over. Jeff took a picture of the bike and posted it on Flickr where it’s licensed under Creative Commons, which means anyone can use it but they must give credit to the original source.

Months later Jeff did a search for the image, and what he discovered resulted in a new blog post: FOX News used the image for a news story without given credit to Jeff. It also later claimed the image as its own by watermarking the image with its own logo.

While bloggers must keep out own ethics and houses in order, so too must the news media.

I am not hopeful for any kind of public outcome for Jeff, other than some snarky comments on his blog and a little bit of online hype. The reason is this: While PR folks – and really, people in general — should be prepared apologize, or acknowledge wrongdoing, the news media business must also do the same. The problem is that too often, it doesn’t.

The same day Jeff posted his “No Spin Zone” story, a local columnist posted this, where he details news business advice he once received: “Never explain, never apologize.” (The columnist, to his credit, selectively ignores the advice.)

Let us hope that as news businesses are forced into radically transforming their operations, part of what is left behind is the “never explain, never apologize” attitude.

[NOTE: I emailed the myFOX Mephis reporter who originally reported the story using Jeff's image and requested comments and aswers to questions. I will update this post with her reply should it be received.]

Read Part I and Part II.

Important facts about CEO salaries tend to be ignored by the news media. The back-story, the realities of CEO compensation, are far more complex than what can fit into a 30-second series of sound-bites on the evening news, and the complexities are often overlooked in even the more in-depth written stories.

Yet these points are a key to understanding why it is that CEOs make the money they do. Nobody understands this perhaps better than Thomas Sowell, who has taught economics at institutions such as Cornell, UCLA and Amherst. He is currently a scholar-in-residence at the Hoover Institution, Stanford University.

Sowell provides provides a thoughtful context for CEO salaries.

“Among the bountiful supply of fallacies about income and wealth are the following:

1. Except for the rich, the incomes of Americans have stagnated for years.
2. The American middle class is growing smaller.
3. Over the years, the poor have been getting poorer.
4. Corporate executives are overpaid, at the expense of both stockholders and consumers (pg. 124).”

“The high pay of corporate executives in general, and of chief executive officers in particular, has attracted much popular, media, and political attention – much more so than the similar or higher pay of professional athletes, movie stars, media celebrities, and others in very high income brackets. While the top ten corporate executives earned an average of $59 million each in 2004, the top 10 celebrities earned an average of $119 million each that same year – twice as much. Yet it is rare – almost unheard of – to hear criticisms of the incomes of sports, movie, or media stars, much less hear heated denunciations of them for ‘greed.’*

“One of the most popular – and most fallacious – explanations of the very high salaries of corporate executives is ‘greed.’ But when your salary depends on what other people are willing to pay you, you can be the greediest person on earth and that will not raise your pay by a dime” (pg. 141).

So why is it that corporate CEOs make so much money? Sowell says that the simple answer is the basic principle of supply and demand. Further, there’s a sound economic reason for high CEO compensation packages, namely the impact CEOs have on high-stakes corporate decisions.

“Given the billions of dollars at stake in corporate decisions, $59 million a year can be a bargain for someone who can reduce mistakes by 10 percent and thereby save the corporation $100 million…. For example, the director of the company that publishes the Washington Post assessed the recommendations of one member of his board of directors this way: ‘Mr. Buffet’s recommendations to management have been worth – no question – billions’” (pp. 142-143).

It should now be obvious why corporate leaders receive what are dubbed golden parachutes upon termination. Simply, if CEO decision making is faulty and is in fact costing the company money, a “lucrative” severance package may in fact be a cost-saving investment for the company. Again, Sowell explains:

“…Putting an end to a relationship may be just as valuable, or even more valuable, than the initial beginning of the relationship once seemed. As with the original hiring decision, neither stockholders nor consumers nor other employees are worse off for the payment of a large severance package, if that cuts losses that would have been bigger if the failed CEO stayed on” (pp. 144-155).

At the least, the next time a story airs that mentions leadership salaries in contexts deemed negative, it is likely that only a sliver of the picture is being revealed. To adequately understand the myths and realities of CEO compensation requires truer objectivity and a more thorough understanding of corporate trends beyond what headlines and charged storylines procure.

 —————————————–

*Activist filmmaker Michael Moore, who frequently attacks corporations in his films, said on Larry King Live in November:

“… [W]e’ve allowed a few people at the top to get filthy rich…. The Ford chairman is making something like $22 million a year and his company lost $2 billion last year. The G.M. chairman is making $15 million a year. His company lost $39 billion last year. And he’s rewarded with a $15 million payout. I mean this is — this is just absolutely insane….”

Moore himself is said to be worth more than $50 million.

Read Part I here.

The reason for such outcry about CEO behavior is not because what CEOs do is arrogant – it just appears that way. It is not because their salaries are out of line – if that were the case, celebrities’ salaries, which are higher on average than CEO salaries, should also lead to outcry. The reason for the hysteria is more because of public ignorance and allegations made by the news media starting about 20 years ago.

“Although the business press had followed CEO pay for decades, CEO pay did not really become a public ‘issue’ until 1991. Feature stories on CEO pay aired on the nightly news broadcasts of the three major networks in the Spring of 1991, and CNN, 60 minutes and Nightline devoted segments to CEO pay. The controversy heightened with the November 1991 introduction of Graef Crystal’s (1991) expose on CEO pay, In Search of Excess, and exploded following President George Bush’s ill-timed pilgrimage to Japan in January 1992, accompanied by an entourage of highly paid U.S. executives…. By the mid-1990s, media and political attention focused on the growing disparity between CEO pay and average worker pay, and on escalating CEO pay in downsizing companies. Newsweek ran a February 1996 cover story on ‘Corporate Killers: The Hitmen,’ which identified CEOs both by their salaries and by how many employees had been fired in recent restructurings…” (source, pp. 50-51).

The problem with such news media created invective is that most people do not understand how businesses operate and why CEOs make the money that they do. Most people, who in America earn a middle-class income, simply cannot fathom the amount of money some of these CEOs take home, not to mention the perceived lucrative packages received when CEOs are fired.

Because we are used to our own meager salaries, and typically, living paycheck-to-paycheck, the world of multi-million dollar salaries appears foreign. It is therefore easy to generate assumptions about such salaries.

CEO compensation has been climbing steadily in the past two decades, and the perception that goes along with astronomical compensation packages is often negative. Kevin Murphy of the Marshall School of Business at the University of Southern California, wrote a paper in 1999 that outlined emerging trends in CEO compensation, as well as the “populist attack on wealth that followed the so-called ‘excesses of the 1980s” (pg. 1). Murphy provides a background on the reality of CEO salaries, and it is important to understand the four key components of executive pay packages:

1. Base salary
2. Annual bonuses tied to accounting performance
3. Stock options, and
4. Long-term incentive plans (pg. 3)

So Alan Mulally of Ford and other CEOs may forego their salaries as a symbolic public relations gesture – and to appease grandstanding politicians – but they’re still getting along just fine. And the public and news media remain uninformed of just how complex the issue of CEO compensation really is, while compelling headlines about alleged corporate malfeasance continue to be written.

Read Part III, the conclusion, tomorrow.

There’s nothing quite like a news story in which a corporate CEO is photographed in handcuffs. As the perceived pinnacle of global malfeasance, today’s CEO is widely vilified, and often for good reason. Or so it is assumed.

Nothing illustrated the wide disconnect between CEOs and the masses than Alan Mulally’s testimony in front of Congress where, after flying to the hearings in a corporate jet about the desperate situations Ford Motor Co. and other major car manufactures are in, he was asked to relinquish his salary. His reply:

“I think I’m OK where I am.”

Where he was, was at about $13.6 million, which was a 37% pay cut from 2007, when he earned about $21.7 million.

His response ended as public relations disaster that resulted in Ford Motor Co. and crew later driving to Washington in hybrid vehicles and Mulally eventually agreeing to a $1 a year salary.

Such actions, though, are window dressing and serve only public relations and political purposes, not actual corporate or operational improvement. Mulally’s salary is a mere drop in the bucket for what is needed in order for Ford to survive the economic crisis, and his later trip to Washington in a hybrid was nonsensical from a resource and policy perspective.

From a public relations standpoint, it was a no-win situation for Mulally. Jason Vines, a former Chrysler spokesperson, said: “If you do what people think is the right thing, then they’re just going to be reminded that you came in corporate jets before.”

The problem is that from an efficiency standpoint, Mulally should have been in a jet from the get-go, and he should have remained so. As someone whose time is more valuable that most of us can fathom, sitting in a cramped car for a nine-hour trip to Washington is more wasteful of Ford’s resources than flying.

The PR backpedaling may have helped to kill the story line, and the public perception was perhaps mildly satiated by this maneuver – meaning, Ford’s approach was most probably the right thing to do from a PR standpoint – but it’s a structurally unsound way to conduct business and in fact may violate company policy.

“According to Ford’s proxy, Mr. Mulally was required to use Ford aircraft for all business and personal air travel in 2007 for security reasons and his family and guests were allowed to accompany him.

“The arrangement also covers travel by Mr. Mulally’s wife, children and guests on company aircraft for personal reasons without him at company expense upon his request to ‘ease the burden’ of moving to Michigan and away from family in Seattle, according to the proxy.

“Ford’s proxy said the only other person allowed to use corporate aircraft for personal reasons is Executive Chairman Bill Ford Jr” (source).

In other words, Mulally got in trouble for following the rules.

Read Part II tomorrow.

Read Part I, Part II and Part III.

Good news was received last week. Patraw’s suit against the University was thrown out of court. The summary judgment is here. The judge agreed that Patraw’s allegations of what constitutes defamation – the same ploy she used against Jerz – was bogus, and most of her numerous other complaints were dismissed. (It wasn’t the first time, either.)

At first I rejoiced, as I’m sure Jerz did. Then it dawned on me that a social travesty of another sort had occurred – the silence of Jerz’s supporters and those who would normally rush to what I consider to be an obvious defense. At one point, Jerz had reached out to what he called the “who’s who” of Nevada bloggers. Few bothered to respond. He even spoke with personnel at the Reno Gazette-Journal. No one helped to publicize his legal harassment by Terri Patraw.

So I asked Jerz to send me comments for this post, specifically asking him for his response to the wholesale lack of support, especially in light of Nevada’s tradition for banner waving, liberty and free-speech issues (to the point where it’s annoying, frankly, as it contributes to wingnuttery on both sides of the political spectrum to a startling degree). Here’s what he wrote:

“What disappointed me the most, I think, is that I learned that the bloggers around here weren’t really into breaking any ground. They have their own agendas, but when my situation arose — something that was potentially groundbreaking — they were silent. I didn’t fit into their narrative. And what’s funny about that is that one of the major problems bloggers in general have with the media is that they write to fit a narrative. Bloggers criticize that, and rightfully so. What they don’t realize is that all bloggers have a narrative they’re trying to fit things into too. In my case, I think the story of something truly interesting and that should have brought some normally opposing viewpoints together fell victim to a mentality of “it’s not what I do.” Problem is, we all should have cared about it. In the end, I stopped following several of them and lost respect that I always had for people, despite what I might have said publicly.”

To me this is a somber indictment. At the end of the day I consider Jerz’s experience in this situation an example of the bystander effect. While less clear than what a typical news story would like to frame, and perhaps even a bit more complicated for an interpretive feature, the example set by Patraw and her legal bullying should have raised ire among those who are typically on-guard about such concerns.

At the very least, I would have expected the so-called progressive community of Nevada to stand against Patraw’s take-down notices and legal threats. Instead, as self-proclaimed champions against injustice, their silence continues to speak volumes.

Read Part I here.

What happens when a victim/villain case isn’t black and white? What happens when the purported ‘victim’ is in fact the villain cloaked in victim’s clothing?

These are questions Reno blogger Ryan Jerz* has had to consider. When the aggressor isn’t the obvious bully at first glance, chances are slim that people will pay close attention. Chances are even more scant that those who do will stand up as they normally would – in obvious deference toward the real victim.

Jerz, unfortunately, found this out the hard way. As he is wont to do, Ryan loves to sleuth examples of, to put it conveniently, doucheyness – when people are doing things that are bizarre, deceptive or misleading. Jerz, though a political conservative, goes after doucheyness at all levels, regardless of who or what it is (we’ve had our noted battles, for example). Examples of his work are here, here and here.

When he somewhat flippantly remarked on his blog, after recently fired University of Nevada, Reno soccer coach Terry Patraw filed a lawsuit against the University, that she would be better to move on, an entire ordeal ensued, which I wrote about here and here. It didn’t end there. Patraw’s harassment continued unabated and aggressively, despite claiming victim status the entire time.

The ensuing drama engendered mostly silence. While a comparison to Genovese is not equitable, the bystander effect idea is. In Jerz’s case, others didn’t publicly speak up after Patraw hired an East Coast attorney. This attorney and Patraw were successful in getting Jerz’s site removed from his longstanding site host (Joyent, whose CEO, David Young, said his company was not willing to stand up for a small client), and after he got another host (Site5) to agree to not back down, Patraw threatened a lawsuit in another state where Jerz didn’t have legal representation. Jerz had no choice but to ultimately cave and remove a substantial amount of content from his site, despite the content clearly being either fact or opinion — constitutionally protected speech in other words.

* Ryan is a good friend and colleague, though he would probably deny it in public.

Read Part III tomorrow.