The power of perception should never be underestimated

Of particular importance is what Shermer calls patternicity, “or the tendency to find meaningful patterns in meaningless noise.”

Shermer cites at the Scientific American researchers Kevin Foster (Harvard) and Hanna Kokko (University of Helsinki), who wrote in 2008 about patternicity: “The inability of individuals – human or otherwise – to assign causal probabilities to all sets of events that occur around them will often force them to lump causal associations with non-causal ones.”

It’s why in part, Shermer says, humans believe weird things. By extension, I add that it’s also why we are prone to believe media hype, particularly about alleged scandalous behavior.

Lanny Davis noticed a trend in news reporting while working as a special advisor to then President Bill Clinton. It was what he called “connect-the-dots” reporting. Journalists would dig for events, anecdotes and occurrences, piece them together and would then create a pattern of (mis)behavior by politicians; in this case, Clinton.

It’s evident, however, that this kind of journalism ultimately demonstrates one or more cognitive fallacies, such as confirmation bias, the misinterpretation of regression (if an extreme has been observed in a population, journalists may falsely predict another extreme), eyewitness testimony and illusory correlation, which is the overestimation of the relationship between events.

In theory, peer review guards against these fallacies prior to being published as research. Not so in the newsroom. These fallacies frequently guide news coverage, and no newsroom is immune.

In the past week there have been charged allegations against presidential hopeful Herman Cain and Penn State coaches and officials. Many have rushed to judgment in both cases. The latter was more believable because of a grand-jury indictment.

This is despite proclamations of innocence. Cain claimed he never acted inappropriately; Sandusky from Penn State claimed innocence and said he never raped children. Penn State’s former President Spanier also said he acted appropriately, and two others at Penn vowed to fight charges against them.

It needs to be stressed that in PR shitstorms, we never really know what’s going on behind the scenes. Even the key players may not know what’s going on, and people are fired not for what they did but simply because of outside pressure. Perception guides beliefs, actions and consequences. We may never know the full truth behind the Penn State scandal; if Sandusky is found guilty in the legal arena, justice should be served.

But recent and not-so-recent scandals should serve as cautionary tells about deducing guilt based on what’s being reported in the press.

It’s as if we didn’t learn from Audi, which was cleared of charges of faulty accelerators in the late 1980s.

It’s as if we didn’t learn from Toyota, which the National Highway Traffic Safety Administration confirmed was not at fault for unintended accelerations; instead, driver error played a noted role in publicized crashes and deaths. (The Associated Press remained uncharitable toward Toyota after the NHTSA’s findings were released. Rather than focus on the issue of human error, the AP simply explained: “Toyota acceleration problem not caused by electronic flaw.”)

It’s as if we didn’t learn from the Satanic-ritual and day-care sex abuse scandals of the ‘80s and ‘90s.

It’s as we didn’t learn from the Duke University lacrosse team scandal in 2006.

In each case, the “evidence” was portrayed as convincing in news reporting. “Alleged victims” quickly became “victims. ” PR experts knowingly commented on each scenario while their subtexts assumed guilt based not on first-hand information, but on news reporting. People’s reputations were damaged, fines were paid and some even served jail time.

We now know, of course, that in each of these cases, actual wrongdoing was minimal or absent. Yet many at the time assumed guilt of the parties being charged. For Toyota, a “crisis guru” demanded that Toyota set up a restitution fund for victims. At Duke, 88 professors published a statement in the Duke student newspaper that assumed guilt of the lacrosse team players accused of raping and beating stripper, allegations that were ultimately found to be false.

What is certain is that the news media need a scandal, a hot topic. Allegations are powerful and can easily guide perceptions. Patternicity explains why people, even those who should know better, tend to believe allegations portrayed in the press.

History should also teach us, however, that truth is muddied in news coverage, and that the place to determine actual guilt is in the courts, often long after hype has dissipated.

In the meantime, assuming guilt based on allegations – even grand-jury indictments are faulty – means only that we’ve succumbed to faulty reasoning influenced by topical media coverage.

There is now ample evidence

• James Donnelly’s post last week questioned who benefits from the Toyota debacle. Journalists, and, likely, trial lawyers, he said.
• Newsweek’s Ed Wallace told us last week that the news media owe Toyota an apology. (Wallace was scooped in his sentiment by Michael Fumento back in March, 2010, and again in August.)
• Eric Denzenhall used Toyota to illustrate a dynamic he’s built a career upon – public attacks on corporations. (My favorite quote: “The same proliferation of media that has abetted crisis capitalists also provides an opportunity for fighting back. Just don’t expect high fives at your neighborhood barbecue for defending poor, misunderstood multinational corporations.”)
• Crisisblogger Gerald Baron used his post about Toyota’s exoneration to ask: “Would major media actually lie just to juice a story?”

The answer is, of course, yes they would. It happens all the time. In recent years misdeeds by media personnel that I’ve witnessed include the following:

1. A reporter telling my boss that I lied to my boss about something the reporter did, in fact, say.
2. A newspaper printing an expose with dozens of errors. When corrections ran, most all the corrections were also incorrect.
3. A reporter wrote in a story that I could not be reached for comment. His story was posted a mere 20 minutes after he left a message on my office phone – even though I have an outgoing message on my voicemail instructing media personnel to call my cell phone if I do not answer. (The reporter retracted the statement after I bitched him out.)
4. A publication printed an article and attributed it to a colleague who had posted the article on an online forum. He posted the column with a statement as to the column’s source, an indication that he was not in fact the column’s author. The news publication, however, took out the statement indicating the source and put his name on it instead and printed it — without permission. He demanded a retraction in the next issue, never received one nor did he receive a response to his email.
5. Another reporter belligerently yelled at a colleague and suggested we were covering up an incident he was investigating because it took multiple personnel and some time to find a 20-year-old file. His subsequent news coverage and published documentation left out important information to the story, which we in turn had to post on our own website. The news outlet then changed parts of its reporting and its online documentation, without noting the fact that they had made changes, after we outed them for their sleazy maneuvering.
6. Lastly, another local reporter claimed our agency “approved (a) dump” when the news release he received clearly stated our agency’s approval was for one of two needed permits. The reporter then told me he failed to see what he needed to correct in his statement.

Yes, Gerald, this happens all the time. My examples are only from Nevada news media, and each reporter involved is an award-winning journalist who, in most cases, has publicly advocated for honesty, transparency and has asserted the nobility of their chosen profession to some degree.

News media scumbaggery aside, though, the PR pundits have, by and large remained silent about Toyota. Last month’s issue of PRSA’s TACTICS even recited disproven claims against Toyota, also implying mismanagement and death caused by the company.

The simple reason why is that people still accept to a significant degree what news media report at face value. Despite the news media being among the least credible of sources for information, we collectively assume what we read, hear and consume to have some element of truth.

A series in 2009 – about the news media as critical components to spin and misinformation – outlined the process, both procedural and cognitive, of how and why consumers misunderstand news, as well as why media personnel frequently get things wrong.

Besides lack of editorial resources and the increasing absence of fact checking, one issue not focused upon in the series was the false sense of empowerment some reporters feel merely by being reporters. Each of those ingredients seem to be at play with Toyota news coverage. As spokespersons for “the people,” it was easy to glom onto cheap criticism, innuendo and unsubstantiated allegation. The Toyota reporting had all the makings of a good scandal for which journalists clamor. The problem was that, even early on, reporters refused to let facts get in the way of their reporting.

There is a plus side to all this. The saving grace is that the same social technologies that give rise to misinformation can also help to counter it. Now more than ever, even among my more timid PR colleagues, people and organizations are fighting back against media-enabled misinformation.

Despite the damage to Toyota’s reputation, one lesson learned is that is also pays to fight back in the face of misinformation and unjustified attacks – especially when driven by the news media.

The social nature of today’s media inherently means misinformation will potentially spread like wildfire. If based on deliberate deception, however, antagonists should heed warnings associated with the new age of transparency.

Edited 2011/02/17 for grammar and style.

The Erik Scott case has begun to spread nationally. For review, Scott was ex-military and had a concealed weapons permit. He entered a Las Vegas Costco with two concealed guns, one in his waistband and one in his pocket. The handgun in his pocket was not covered by his concealed weapons permit.

Certain facts of the case are indisputable:

• Scott was, according to store staff and number of witnesses, behaving erratically.
• After one gun was spotted when Scott was bent over, he was approached by store staff and was told he could not have a gun in the store.
• Scott argued with the staff member about his right to carry in the store, and police were subsequently called.
• Staff proceeded to evacuate the store.
• Police approached Scott at the store exit.
• Scott reached for his gun (claims as to why he did this vary).
• Police shot him seven times, killing him.
• A subsequent coroner’s report found that Scott had high levels of morphine and Xanax in his system.

Eye-witness accounts of the event are conflicting about what exactly happened just prior to the shooting. What’s in dispute was Scott’s precise behavior while being approached by police. More than one witness confirmed police reports that he pulled his gun. Others say he reached for his gun to disarm and it remained in his holster. Others claim he had no gun. Video evidence of the incident was not available, according to Costco, for technical reasons.

This week, during a six-day-long coroner’s inquest, covered widely in Las Vegas media, it was deemed by a jury, after less than two hours of deliberation, that police acted appropriately.

What’s happened on Scott’s family’s side of the event has also been covered. They allege the inquiry process was unfair because there were no cross examinations and only the police version of events was allowed to be presented. The judge over the proceeding said that he was following the rules and that the county commission is responsible for the structure of the inquiry. Some county commission members are now vowing to review and perhaps change the process as a result of this case.

The family has hired an attorney and is threatening to proceed with a civil suit against both Las Vegas Metro and Costco. A PR campaign alleging police corruption was launched that included billboards posted around Las Vegas and a banner flying over a beach in California. There is ongoing campaigning on Facebook and threats are being made on Craigslist toward the Costco employee who called the police.

The family’s continued push to try the case by media and public awareness furthers the tragedy that is Erik Scott’s death.

To be continued next week…

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.