Scholarship Defines Firm’s Legacy

Cecilia Wilkinson, who died in 2006, was a founding member of PondelWilkinson Inc., having joined the predecessor firm following her graduation from the University of Southern California, and enjoying an illustrious investor relations and corporate public relations career that spanned 25 years.

A nationally renowned industry leader, Cecilia has been honored since 2007 with an endowed scholarship fund in her memory for graduate students at the USC Annenberg School for Communication & Journalism.

Dale

Dale Legaspi, recipient of the 2014 Cecilia Wilkinson Memorial Scholarship, during a staff meeting at the offices of PondelWilkinson in Century City.

Each year, the Cecilia Wilkinson Memorial Scholarship is awarded to a first-year strategic public relations graduate student with an interest in corporate/investor relations and reputation management.

We recently had the pleasure to meet this year’s recipient, Dale Legaspi, a graduate student at Annenberg, who is now studying to obtain a master’s degree and merge his professional communications experience with a new set of expanded capabilities.

“We are delighted to be able to continue Cecilia’s legacy by helping talented individuals such as Dale, who are pursuing advanced careers in our sector,” said Roger Pondel, the firm’s CEO since 1986, who worked with Cecilia for nearly her entire career. “We are uniquely positioned to mentor these students who are studying a specialization that encompasses traditional and social media, along with Wall Street and financial know-how, as we help tell our clients’ stories to key audiences, both on Main Street and Wall Street.”

Legaspi already has nearly a decade of professional experience, having worked at two boutique agencies and as a freelancer, representing a variety of companies across the technology industry, including mobile and wireless, carrier and enterprise networking, cloud, data center and security.

Wilkinson earned master’s and bachelor’s degrees from Annenberg, where she later taught undergraduate and graduate classes as an adjunct professor. She was honored with the school’s Distinguished Journalism Alumni award, served on the Board of Governors of the USC General Alumni Association, and was a former president of the Los Angeles chapter of the Public Relations Society of America.

— George Medici, gmedici@pondel.com

Business Folk

Most, if not all, annual reports for 2013 have been published by now, and as investors attempt to glean what went right and what went wrong by wading through pages upon pages of corporate detritus, often the most readable section is that containing the shareholder letter.

Warren Buffet is arguably the most famous writer of shareholder letters because of his folksy, straight-to-the point style.  Buffet is so darn good at writing shareholder letters that myriad chairmen and chief executive officers attempt to emulate his knack for prose. The problem is, Buffet writes in his own voice, and trying to inject his vernacular into your shareholder letter could smack of inauthenticity, or even worse, someone might call you a poser.

Instead of invoking Buffet when trying to conjure up some down-home writing, l’d rather refer to his style as “business folk.”  Yes, it sounds like a music genre for MBAs.  But writing in the style of “business folk” seems a lot less intimidating than trying to emulate a genius.

Following are additional word-buffing tips:

    • Avoid clichés and creative analogies.  Yes, it is tempting to use catch phrases and descriptors to tell the company’s story, but words can easily become distracting, and soon enough the reader loses focus.

 

    • Write as quickly as possible.  This ensures you are writing what you know and staying on point.  It also helps lay a foundation that you can wordsmith later.

 

    • Use metrics that help demonstrate themes.  Numbers are great because they are hard facts, but they also pose challenges because they don’t always tell the full story.  Try to use numbers that help shareholders understand the overall direction of the company.

 

    • Describe the company’s strategic direction.  Many executives underestimate the power of writing and misuse the activity, particularly in shareholder letters, to recapitulate old news.  Effective writing presents a roadmap that can help manage expectations, as well as demonstrate leadership.

 

    • Read what you write out loud to determine if it actually sounds like something you would say.  If you employ a lot of three-syllable words in your daily conversations, then maybe your writing should contain three-syllable words.  (Note: If expletives factor into your daily conversations, then you should edit those out.)

 

    • Use subheads to break up thoughts.  It is easy for readers to get lost in corporate minutiae, which is why it is helpful to have guideposts.  Subheads help hammer home themes we want investor audiences to remember.

 

    • Make sure whatever you write is in reader-friendly formats both online and in print.

 

    • Words are more important than flashy design.  Sure, an interactive quarterly report is nice, but it’s the words that will help investors determine if you have “a wonderful company at a fair price (rather) than a fair company at a wonderful price,” according to a quote from Warren Buffet’s shareholder letter in 1989.

 

— Evan Pondel, epondel@pondel.com

Does it Pay to Go Public?

IPORecently, a client pointed me in the direction of a very interesting Inc. article about the case for staying private. The author is the CEO of a privately held, family-controlled tech business, one that has name cache. He notes that being a public company is expensive and time consuming. He also believes that “the most critical benefit of staying private is the facilitation of a true focus on long-term goals.”

It’s not hard to argue that Wall Street is increasingly focused on short-term results, but does that mean that management teams need to adopt the same mindset? Maybe it’s a naïve belief, but some would say that if the stock market is working as it should, a company’s share price will reflect the company’s true value over the long-term.

The New York Stock Exchange predicts a busy year for IPOs in 2014, with about 150 to 200 new issues expected. Reuters points to first quarter IPO activity of $47.2 billion, a nearly doubling from this time last year and “the strongest annual start for global IPOs since 2010.”

Clearly, there are CEOs who still believe in taking their companies public, many in the technology sector. Perhaps they are in it for a large personal pay day, but perhaps they realize that it could be easier and less expensive to raise capital to realize their growth plans. Or perhaps, their Fortune 500 client base requires audited financials as a condition for doing business together.

The decision to go public is not an easy one, and it’s a decision that every company must weigh very carefully. If you’re contemplating an IPO to become like Hooli, the fictional tech company featured in the new HBO series “Silicon Valley,” it may not be the right move. But if you’re doing it to build something that can have a lasting impact, it might just be. Just make sure you surround yourself with good advisors to ensure a smooth process.

— Laurie Berman, lberman@pondel.com

Beware ‘The Wolf of Wall Street’

Focusing on con artists and greedy hucksters selling dreams that rarely come true, “The Wolf of Wall Street” is an entertaining, well-acted, comedic, and sadly, reasonably accurate film.
 
Although intensely exaggerated, the highly successful Hollywood extravaganza epitomizes the classic bucket shop investment bank, selling mostly worthless penny stocks via high pressure telephone solicitations, principally to unsuspecting individual investors, and tantalizing entrepreneurs who want to take their very small companies public.
 
From Charles Ponzi to Bernie Madoff, there is a long history of questionable behavior on Wall Street. The wolf, or rather wolves, never really left. In fact, the sordid creatures may be creeping back into the hood with the stock market’s stellar performance. According to one law firm, DLA Piper, even though 2013 saw the lowest number of SEC enforcement actions (68) in the past decade, word has it that this year and beyond, the SEC plans to bring record numbers of sanctions using new tools and resources.
 
In a bulletin to its clients and prospects, the law firm noted that whistleblower bounties and tips are on the rise and that the Dodd-Frank whistleblower bounty program is gaining steam, with informants potentially receiving as much as 30 percent of any monetary recoveries. On October 1 last year, the SEC awarded its largest bounty to date, $14 million, which itself may drive the number of tips higher in 2014.
 
Mid last year, the SEC’s enforcement unit announced it had formed the Financial Reporting and Audit Task Force, comprised of lawyers and accountants throughout the United States tasked with identifying issuer violations. This august group has a tool in its arsenal, affectionately known as RoboCop, which allows it to determine whether an issuer’s financial statements stick out from the pack. Other tools are supposedly in the works that will analyze text portions of annual reports for potentially misleading disclosures.
 
According to the bulletin, with the amount of new resources and tools the SEC is devoting to detecting financial reporting violations, an expectation is growing that the agency will bring a greater number of enforcement actions in the future. In June of last year, SEC Chair Mary Jo White said that in certain cases, the SEC will not settle unless the defendants admitted wrongdoing, so more companies, officers and directors may be testing the SEC’s allegations and legal positions by litigating and going to trial.
 
The largest number of enforcement actions in any one year during the past decade was 219 in 2007. We’ll see what happens in 2014. But wolves everywhere, beware.
 
— Roger Pondel, rpondel@pondel.com

Crisis Case Study: Baiting the Media in the Court of Public Opinion

Last Sunday’s overtime win against the San Diego Chargers gave the Washington Redskins a reason to celebrate, at least temporarily, as the storied franchise continues to make headlines both on and off the field.
 
The team’s losing season is only part of the problem.  A new report by the Pew Research Center revealed that 76 news outlets have publicly announced their opposition to the name “Redskins” or have banned or restricted its use in editorial coverage. 2013-09-11-WashingtonRedskinsLogo
 
Washington, D.C. Mayor Vincent Gray and anti-defamation groups reignited the decades-old issue earlier this year calling for the removal of the name, saying it is a racial slur and offensive toward Native Americans.
 
Owner Dan Snyder for years has been adamant about not changing the team’s name.  He made headlines last month after sending a letter to fans defending his reasons against a name change.  He’s not alone either.  A Washington Post poll found that a majority of D.C. residents (66 percent) are against a name change.  Other published polls also show support for the name, even among Native Americans.
 
While the 76 news outlets that came out in opposition to the name are only a small portion of the media landscape, they certainly pack a punch.  Several high profile journalists have created national news themselves by opining their reasons for the Redskins name to go.
 
Whether a reporter “becoming” the story is bad for an outlet’s credibility will continue to be debated.  Most journalists try not to get involved in their own stories, although that is becoming increasingly difficult in today’s highly fragmented, 24-hour media landscape.  Either way, it makes for good television and sells newspapers.
 
The fact is the Washington Redskins are in crisis, a battle with the courts of both legal and public opinions.  And there aren’t any signs of it tapering off, although published reports indicate that the NFL has been meeting with Snyder and the Oneida Indian Nation to address the controversy.
 
Even though the owner, team and fans like the name the way it is, the current reality is creating too much controversy around the brand, which equates to lost dollars and can impact future revenues.  That’s a recipe that can’t work in today’s NFL as pro football teams look to sell products, licenses, and TV and radio rights outside their respective locales.
 
All this makes for an interesting public relations case study for today’s business organizations.  First off, executives always must be mindful of sending correspondence, whether it’s targeting consumers, customers or even shareholders.  Most times these communications will be leaked to media or appear across social media platforms, as in the case of Dan Snyder’s recent letter to fans.
 
This case is unusual because many of the fans and ethnic groups that may be affected don’t mind the Redskins name.  However, the issue has created a broader movement among media and anti-defamation groups, which appear to have their own agenda under the guise of eradicating racism.
 
The reality is Snyder is in a difficult situation: succumb to public pressure or stick to his proverbial guns.  This instance may be reminiscent of a business executive passionate about a company function or an unrelated personal issue.  There is no easy solution in these circumstances, especially if the executive has a legitimate position.  It’s also extremely difficult to win in the court of public opinion, let alone going toe-to-toe with national media.
 
CEOs and business executives can learn from the Redskins’ current communications crunch.  For Snyder, the strategy now is to manage the PR crisis, probably taking a reactive approach, rather than a proactive one, which may only continue to fan the flames — a strategy worth remembering when dealing with the next corporate communications crisis.
 
— George Medici, gmedici@pondel.com

Q&A with L.A. Business Journal Reporter

Business reporters play an important role in helping investors identify opportunities. PondelWilkinson caught up with James Rufus Koren, staff reporter of the Los Angeles Business Journal, to shed light on factors that influence his coverage of the banking and finance world.

 

James Rufus Koren, reporter with L.A. Business Journal

James Rufus Koren, reporter with L.A. Business Journal

1. How are social media influencing your coverage of companies?

 

I don’t know that it has changed the game that terribly much because of the type of niche business publication we are. We don’t do a lot of breaking news. We are looking for the analysis story; the exclusive deep read on what’s going on.  I also don’t find social media the best way to get information about banks. The three sentences at the bottom of a 10K are usually much more insightful. That said, if we are looking for a lead, I will search through Twitter to see if anyone is tweeting about a company or I’ll read blogs to see if anyone is talking about a company.

 

2. What characteristics make for a compelling story in the Los Angeles Business Journal?

 

Growth, change and new strategies that speak to the local economy are interesting to me. Big names are also interesting. For example, if Charlie Munger is doing something, we will probably be more interested than if Evan Pondel is doing something (laughter). But often times, what interests me may not interest another reporter. I like to explore parts of the banking and finance world that are not well understood. I look for things that I don’t understand and then try to take a crack at it.

 

3. How would you define an ideal source?

 

An ideal source is someone who is deeply in the know not just about their company or their particular corner of the world but also has a broader knowledge base and a big Rolodex. It’s very helpful when someone can say, ‘hey there is something interesting going on here that you should look at,’ such as a particular sector of the economy. An ideal source is someone who will give you information without the expectation that it will result in something immediate, or something positive for them.

 

4. How do you like to be approached about prospective stories?

 

In general, email is the easiest, but the ideal approach is developing a relationship with me. If you have been helpful in arranging interviews, I am more likely to follow up on story ideas. Sending gifts does not ensure a good story. A number of interesting things come into this office. Thankfully, no one has sent me a fish wrapped in a newspaper.

 

5. Where do you foresee the future of business journalism going?

 

I actually see business journalism continuing to connect with people in more real ways than other kinds of journalism. Many people have a hard time seeing the direct impact of stories about state and local politics, but people who read business stories want information so they can make wise decisions about their money.

 

6. How do you react when a call is not returned?

 

It depends on the information I left in a message. In general, I interpret it as the person has nothing to say for themselves, or that I have things pegged well enough in a story and the person cannot benefit from getting in touch with me. Also, as a business journalist, I understand the limitations of public companies and that certain things cannot be disclosed.

 

— Evan Pondel, epondel@pondel.com

 

Any PR is (not) Good PR

We often hear the phrase, “Any PR is good PR,” but I’m convinced that negative PR will eventually cause a business to lose customers and flounder. I’m guessing the owners of an Arizona bakery feel different. What else could explain the mind-blowingly trenchant behavior of its owners, currently waging war on the social media front with, well, pretty much the entire free world.
After bombastic Arizona bakery owners Samy and Amy Bouzaglo got the boot from Gordon Ramsay on “Kitchen Nightmares,” they decided that sparring with every human being with Internet access would be a good idea.

Gordon Ramsay in 2010.

Gordon Ramsay in 2010. (Photo credit: Wikipedia)

 
When negative comments about the bakery brats appeared on Reddit, Facebook and Yelp, calling the Bouzaglos rude and arrogant during their reality TV performance, the couple had the brilliant idea to go on the attack, railing against reviewers and going on a rampage against Yelp and Reddit posters, threatening legal action and calling them idiots, morons and every other name in the book.
 
Can you say PR 911?
 
The latest twist from Amy’s Baking Company is a claim that all of their social media was hacked, and that someone else manufactured this social media temper tantrum. Hmm, that’s really not going to pass the smell test when in 2010, the Bouzaglos responded to a bad review on Yelp, telling the poster, “Do US a favor and keep your ugly face and your ugly comments to yourself and go back to the restaurant that you really work at!!” Their credibility already has been torpedoed by their “Kitchen Nightmares” misbehavior, so the “hacked” excuse holds no water. Furthermore, when a loose cannon like Gordon Ramsay thinks you’re too insane to work with, that’s not a good sign.
 
These two gems are so over the top, it makes you wonder if it’s all an act and that the show’s producers created these Frankenstein’s in an effort to boost ratings.
 
Whatever the case, Amy’s Baking Company could hire the best crisis communication team in the country and it probably wouldn’t make much difference. What they need at this point is a time machine, not a PR firm.

 

— Ron Neal, rneal@pondel.com
 
 

Print Media’s Comeback?

President Obama gave kudos to print media this past Saturday evening during his speech at the annual White House Correspondents’ Dinner, singling out the Boston Globe’s coverage of the Boston Marathon bombings.

 

The president closed his comedic-style remarks on a somber note saying “we have seen humanity shine at its brightest,” referencing how first responders to everyday citizens came together as a country to assist with the recent tragedies in Boston, Texas and the Midwest.

 

“We also saw journalists at their best who took the time to wade up stream through the torrent of digital rumors and chase down facts,” said the president in a packed room at the Washington Hilton Hotel.  “If anyone wonders whether newspapers are a thing of the past, all you needed to do was to pick up or log on to papers like the Boston Globe.  When their communities needed them most, they were there making sense … that’s what great journalism is and that’s what great journalists do.”

 

No doubt the president was playing nice with the media.  It’s also important to keep in mind that Saturday’s event was organized by the White House Correspondents’ Association, an organization of journalists who cover the president.

 

Whether or not the president was continuing his charm offensive remains unclear.  There is truth to his comments, however.  More stringent editorial protocols exist for print outlets than many self-publishing online media even though newspaper staffs have been heavily downsized.

 

In fact, the newspaper industry dropped 30 percent of its newsroom staff since 2000 and hit below 40,000 full-time professional employees for the first time since 1978, according to the Pew Research Center’s State of the News Media 2013.

 

There is an upside however.  Pew reported that newspaper circulation revenue, both for weekday and Sunday editions, has remained relatively steady over the past two decades.  Moreover, decline in total print ad revenue seems to have leveled off somewhat, although online ad growth has been minimal at best.

 

Several factors have contributed to the small glimmer of good news within the newspaper industry including a surge in pay wall subscriptions, which coincidently the Boston Globe recently halted in the aftermath of the Boston bombings.

 

Newspapers are not out of the woods yet.  These outlets have created strong brand awareness cultivated over decades by providing local news to communities. The trick is leveraging this attribute while reorganizing their business models to successfully compete in today’s online media landscape.

 

Late night TV talk show host Conan O’Brien who headlined the correspondents’ dinner may have said it best, “… many people are saying print media is dying, but I don’t believe it, and neither does my blacksmith.”

 

George Medici, gmedici@pondel.com

The Downside of Social Media

While social media usage continues to grow here in the U.S. and globally, so do opportunities to reach key audiences on the Web, creating an oversaturation of content, we know all too well.

World Wide Web (Photo Credit: wikipedia.com)

 
Countless efficiency studies have been released on managing content, mirrored by just as many reports on tapping key audiences in a cluttered marketplace.  For instance, standing up in a packed movie theater yelling “Fire!” will certainly grab attention, but it’s probably not the kind of exposure that is sustainable over the long term.
 
Facebook and Google’s ad strategy of creating more personalized content based on user preferences may be the future of marketing.  The fact remains, however, that people turn off when the proverbial information flow goes on overload.
 
Walking a delicate balance is the right strategy.  Consider the following five tips when engaging
online audiences:
 

  1. Whether corporate, investor or marketing-related, make your message relevant. Know your audience’s wants and needs and develop messaging that resonates on a deeper level.  For example, time-strapped CEOs may be more inclined to listen to a vendor that understands the pressures of a “bottom line.”
     

  2. Don’t try to speak to the entire world. While having a video or tweet go viral is rare, most times less is more.  Try having more personalized online conversations and work on building deeper relationships with audiences.
     

  3. Start off slow. Don’t bombard your audiences with too many messages at once. Keep it simple. Start a conversation and then slowly move into other topic areas with time.
     

  4. Add value. Make sure you provide your audience with something they can’t get elsewhere. This is paramount.
     

  5. Try the post office.  May sound corny, but a nice follow up letter using old fashioned snail mail with an actual signed signature goes a long way in today’s fast-paced, digitized world. Think about how many personalized letters you receive these days.
     

  6. And finally, remember the old adage of selling the sizzle, not the steak. Keep in mind that there are millions of conversation threads each day. Why should anyone join yours?

 

George Medici, gmedici@pondel.com