Parting is Such Sweet Sorrow

So many forms of corporate communications have been impacted by social media; even the classic letter of resignation has been threatened.

Thomson Reuters CEO Tom Glocer and CEO of Groupon Andrew Mason at a plenary at the E-G8 Forum in Paris.

Thomson Reuters CEO Tom Glocer and CEO of Groupon Andrew Mason at a plenary at the E-G8 Forum in Paris. (Photo Credit: wikipedia.com)

 
Why bother with a bloated and often disingenuous letter, when you can cram your message into 140 words or less? That’s what founder of Groupon Andrew Mason did last week after he was shown the door. In his departure tweet, Mason had the good humor to dust off a standard corporate cliché to set up his punch line:  “After four and a half intense and wonderful years as C.E.O. of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding — I was fired today.”
 
In 2010, Sun Microsystems CEO Jonathan Schwartz got the ball rolling on this trend, tweeting “Today’s my last day at Sun. I’ll miss it. Seems only fitting to end on a #haiku. Financial crisis/Stalled too many customers/C.E.O. no more.”
 
It’s a fascinating twist on messaging when executives – and employees for that matter – are given the boot. How this might become a powder keg was on display in an episode of Netflix’s critically acclaimed original series “House of Cards.” The scene involves editor Tom Hammerschmidt, who, at the behest of his publisher, begrudgingly offers the White House correspondent job to a young, ambitious, rising star reporter named Zoe Barnes. When Barnes turns the job down, he calls her an “ungrateful, self-entitled little (expletive)” and fires her. While the confrontation has Tom steaming, Zoe calmly pulls out her smartphone in front of him and tweets to her legion of followers what he’s said and done. The end result is that Tom is forced to step down and Zoe lands a new job at a political blog.
 
How will this all play out in the future?  For good or bad, it’s possible that more and more corporate
goodbyes will trend toward bluntness and, gulp, honesty.

 

Ron Neal, rneal@pondel.com

Restoring the Faith in Messaging

The announcement of Pope Benedict XVI’s resignation just before the start of Lent season comes as a shocking surprise to the world.  Depending on how “resignation” is defined and how the Holy See’s records are interpreted, as few as four and as many as 10 popes have renounced the Papacy.

ALTERNATIVE TEXT

Pope Benedictus XVI (Photo Credit: wikipedia.com)

 
The last pope that resigned was Pope Gregory XII in the early 1400s, and like his predecessors, Pope Benedict’s resignation is sprinkled with controversy. So, how does the Vatican respond to such unprecedented news?
 
The Vatican’s semi-official daily newspaper is L’Osservatore Romano, and so far it is gearing its coverage toward restoring readers’ faith in the Church by emphasizing that the Pope’s resignation is conquerable and recoverable.
 
The newspaper’s coverage hammers three central points: the Pope’s resignation is a difficult and regretful decision but made for the greater good; the Pope’s character is that of courage and humility to admit his
inability to stay in his position; and the Church will recover from all of this.
 
Rather than focusing on the fact that the Pope is leaving his position, L’Osservatore Romano draws
attention to the Pope’s character, calling him courageous and humble for being so honest.  And despite the social lashing the Catholic Church has received in the media, the Vatican’s messaging isn’t defensive, but supportive and positive.
 
Consistency is key in the Vatican’s messaging, particularly at a time when a lot of people are looking to the Holy See for a resolution and a way to restore order.  In fact, the messaging has been so consistent and effective that it is positioning the Pope’s resignation as an opportunity for change and a restoration of faith in the Church.
 
The Vatican’s approach serves as a good example that it is not enough to communicate what will be done to fix a situation, but rather it is how a message is communicated that determines whether the message can restore people’s faith.

 

Joanne Sibug, jsibug@pondel.com

Social Media’s Global Growth

The stats on social media’s global growth are staggering.  A graphic recently posted in Mashable.com illustrates how the world consumes social media.  And boy does it!

Facebook Logo

 
We all know that Facebook now has one billion users in 127 countries and is the top social media destination.  It’s also interesting to learn how countries and regions outside the U.S. are adopting social media like Asia, which has grown to more than one billion Internet users in a little more than ten years.
 
Or that 800 million users visit YouTube each month with more than 70 percent of the site’s traffic coming from outside the U.S.  In fact, 700 of these videos are shared via Twitter every minute.  Moreover, LinkedIn increased its membership nearly by half in the last two years with Turkey, Brazil and Indonesia seeing the largest user growth.
 
All this data can seem very overwhelming.  Even though the growth of social media seems to be a no brainer when it comes to global marketing, many executives still fail to grasp the opportunity.  Let’s be clear: social media is not slowing down anytime soon.
 
Not all social media platforms may be relevant for every business organization.  There is no one size fits all solution for tackling this new media landscape.  However, given the global economy and the opportunities social media presents, these new platforms can help organizations engage with consumers, customers, and even investors, all over the world.  It’s like six degrees of separation on steroids. The proof is in the data.
 
So, the world is consuming social media.  Are you?

 

George Medici, gmedici@pondel.com
 
 

Relate to the Public

photo2.JPG

 
Sometimes in order to practice public relations, you actually have to relate to the public. Today our firm visited the Daybreak Day Center, a place that provides food, shelter, clothing and showers for mentally ill homeless women.  We made lunch as a team for more than 20 women, had conversations with staff and volunteers, and shared a meal with some of the most courageous people we’ve ever met.
 
 

PondelWilkinson Wins Two PRism Awards

PRism Awards

 
PondelWilkinson received two PRism awards this week at the 48th Annual Public Relations Society of America – Los Angeles chapter awards show.  The awards recognize reputation/brand management in investor relations for Market Leader, Inc. (Nasdaq: LEDR), a provider of online technology and marketing solutions for real estate professionals, and digital PR tactics/webcasts for Physician Therapeutics, a division of Targeted Medical Pharma, Inc., which is a specialty pharmaceutical company that develops and sells prescription medical foods for the treatment of chronic disease.
 
 

Bankruptcy’s Impact on Brand Perception

Largest Bankruptcies

20 largest bankruptcies of 2012 (Source: Good.is)

San Bernadino this week became the third California city in the last month to seek bankruptcy protection because it could not close a $45.8M budget gap.  Similarly, Stockton and the small resort town of Mammoth Lakes both sought financial protection due to large budget deficits.
 
Lack of funds is the primary reason for the filings.  Basically, these municipalities are spending
more money than they actually earn from taxes, fees and other revenue.
 
According to the Administrative Office of the U.S. Courts, bankruptcies in the U.S. have more than doubled from 2007 to 2011, topping its highest point ever at 1,571,183 filings for the year ending March 31, 2011, although 2012 saw a 13 percent drop over last year.
 
The soured economy certainly impacted the rise in bankruptcies.  While the ability to secure credit may be hampered, and for cities like San Bernardino, bond ratings may be downgraded, the question remains: Does bankruptcy have the same negative brand impact it did a decade ago even in today’s soured economy?
 
Take General Motors for example. The company filed for bankruptcy protection on June 1, 2009, the fourth largest in the nation’s history.  The brand initially took a big hit in the media and financial markets.
 
GM however quickly emerged from bankruptcy only 40 days later with the help of the U.S. Treasury and recently announced June 2012 sales of 248,750 vehicles in the U.S. alone, the company’s highest since September 2008.
 
General Motors today is a company with a new, reinvigorated brand identity.  Yes, new vehicles, increased revenues and good earnings help.  It’s sometimes hard to remember that only a couple of years ago the company was on the brink of financial disaster.
 
The key to success is effectively managing communications during the bankruptcy process.  At the time of the Detroit automaker’s bankruptcy filing, GM’s CEO Fritz Henderson promised that the fallen corporate giant will be reformed and that “business as usual is over.”
 
The strategy seemed to work. Making sure all audiences are informed of a company’s reorganization plan is essential for success. Bankruptcy is not permanent, but a tool to help protect companies and individuals from creditors while a restructuring is put into action.
 
So, the answer might be that bankruptcy does not have the same negative connotation it once had given today’s uncertain marketplace.  Done right, the results can be positive and even generate new investment opportunities.  Done wrong, the repercussions can be disastrous.
 
All eyes now are on Scranton, Pennsylvania.  The cash-strapped city last week cut the pay of its municipal workers to $7.25 an hour and might be the next local government to declare bankruptcy.

 

George Medici, gmedici@pondel.com
 
 

Resisting Temptation to “Like This”

No hoods

No Hoodies (source)

As I mulled this post while prying my seven-year-old out of bed this morning, I also wrestled with all of the brouhaha surrounding the pending Facebook IPO.  Something just did not sit right.  Then it hit me.  I have seen this show before.
 
Facebook’s global adulation is understandable, and well earned.  One in eight people on the
planet use it.  That’s an unfathomable audience that is now interconnected. But as the reports during the IPO process reach their crescendo, two large questions loom:  1) Does Facebook’s advertising really work; and 2) Should the company be valued at $100 billion?
 
Don’t get me wrong, I want to see the company succeed, badly.  I am dying for some good news.  But the more our collective anticipation builds, the more I worry.  Is there a clear rationale for this target valuation or is it hubris?  Are we more enamored of simply breaking an IPO record, or are investors using sane judgment?  And should California really be thinking it can potentially narrow its budget deficit with increased taxes from the many new resident millionaires that will materialize from this transaction?  I get the feeling we are putting too much value on this event, and we might be in for some disappointment.
 
As my son and I had our breakfast, an opinion piece in today’s Wall Street Journal titled “Jenkins:
The Zuckerberg Challenge
” sustained my anxiety.  The author too postulated that apart from enviable 2011 ad sale revenues totaling $3.2 billion, a chasm exists between this and Facebook’s estimated target valuation.  He also provides heaps of praise for the seemingly endless possibilities that lay before the company, which I can’t deny.
 
But as a newly public company, Facebook’s iconic leader Mark Zuckerberg will need to be more transparent with the company’s operations and growth strategies than ever before.  Demonstrating that its ad engine provides real value to its customers and a putting a keen focus on generating profits will be paramount. He now has to answer to many more people that own his baby, and should the stock price fall below the IPO level, the barbarians surely will arrive at the gate.  Which makes me wonder why the company is aiming for such an immediate high valuation in the first place.  “Under promise and over deliver” has been a mantra that has served many CEOs well.
 
As I make my final inspection of my son’s school clothes it also occurs to me that Mr. Zuckerberg might want to leave his signature hoodie at home and don a suit now and then. Growing up is hard, but if you want a $100 billion valuation, you need to play the part.

 

— PondelWilkinson, investor@pondel.com
 
 

In Defense of ‘Flaks’

Mark Cuban

Mark Cuban (Photo credit: wikipedia.com)

Here’s what it said: “Never hire a PR firm.” You can certainly understand my bemusement when reading these words.Entrepreneur Magazine recently published “Mark Cuban’s 12 Rules for Startups.”  Many of the rules provide a common sense approach to starting a new business.  But the eleventh rule made me woozy.
 
Cuban qualified this rule by saying that PR folks are calling and emailing reporters and editors when, in fact, the founders of companies should be calling and emailing the same reporters and editors “who will welcome hearing from (them) instead of some PR flak.”  Gosh, that’s harsh.  I mean, calling PR folks “flaks” is the equivalent of calling a fresh piece of rye bread a “crouton.”
 
Indeed, Cuban is talking about startups and not established companies, and hiring a PR firm isn’t always a top priority when eating and keeping the lights on are hard enough.  But if you cannot afford to hire a PR firm, you should probably ask a flak friend for some pro bono advice before banishing their firms altogether.
 
Here are my top six reasons why:
 

  1. First impressions matter.  If you send a lackluster pitch or sloppily written email to any self-respecting reporter or editor, it’s going to be tough getting their attention.
     

  2. It takes a lot of time and energy to cultivate media sources, so determine whether you have extra time to contact editors and reporters with punchy and seductive things to say.
     

  3. Crafting your own messaging (basically how a company describes itself to the public) is about as simple as staring at yourself in the mirror and describing what you see.
     

  4. It’s not easy communicating a calm and cohesive message to employees, investors, customers and others who rely on your services when you find yourself in the midst of a crisis.  That’s when PR pros really come in handy.
     

  5. The number of professional reporters and editors is shrinking due to consolidation in the media industry.  That means startups and established companies alike are responsible for generating their own buzz, and at the very least, communicating with important constituencies.   That’s what PR firms do.
     

  6. And finally, always question someone who criticizes the value of a PR firm when they themselves are billionaires, not to mention shameless self-promoters.  From the Washington Post:  “He (Cuban) is on television or the radio marveling at his charmed existence … ‘When I die, I want to come back as me,’ he likes to say…”  Unfortunately, we’re not all Mark Cuban.

 

Evan Pondel, epondel@pondel.com
 
 

Think Before Sending

Time and again people underestimate the power of the Internet.  Social media and the pervasive use of video make it very easy for online content to spread like wildfire.
 
E-mail and texting also ring true to this phenomenon.  Just this week Marilyn Davenport, a local Orange County, California GOP official, became national news as she sent a blast e-mail depicting President Obama and his parents as apes using the tagline, “Now you know why — No birth certificate!”
 
Earlier this year, Representative Chris Lee (R-Buffalo) also made national headlines when he texted a shirtless photo of himself to a woman he met on Craigslist.  The married, two-term congressman abruptly resigned after the story broke on the Gawker website.
 
It’s understandable for anyone to forget how easily a video, e-mail or text can spread across the online universe.  Billions of e-mails are sent daily across the globe.  Not all are professional and many carry unsavory content or crude jokes aimed at generating a laugh or giggle.
 
The general rule for e-mailing is simple.  Think first, but think big.  Before sending, imagine the e-mail is going to 1,000 people or being read on the evening news.  While this may sound extreme, creating some kind of filter is good policy for preventing a potential disastrous snafu.
 
While this may not be relevant for the average person, it is an important rule to follow for corporate executives and public officials.  These high profile figures always are under scrutiny from constituencies and media.  As ‘gotcha journalism’ and the 24/7 news cycle become mainstay in the new media landscape, press are on the lookout for sensational story lines.  A racially charged e-mail from a public official no doubt is fodder for a media firestorm.
 
Putting the cat back in the proverbial bag is close to impossible once the news is out.  The next phase is damage control.  Statements and press conferences can help clear the air or possibly insight more coverage.  Party officials are still calling for Davenport’s ouster even after her press conference, where she offered a quasi-apology to the president saying it was unwise to send the e-mail.  Davenport is not resigning, yet.
 
The purpose of social media ironically is for users to be able to share and engage with each other in a robust platform.  The lesson here is that at any time, an innocent e-mail, text or video can become a live wire, so just think before sending.

 

George Medici, gmedici@pondel.com
 
 

Is There a (Spin) Doctor in the House?

When the Securities and Exchange Commission recently charged three former senior executives of IndyMac Bancorp with securities fraud for “misleading investors,” two fundamental questions immediately arose in investor relations and strategic public relations circles:  Did they have professional IR/PR counsel when communicating with investors?
 
Contrary to popular and misguided belief, the professional practice of investor and strategic public relations isn’t about painting rosy pictures, making things appear better than they really are, or coloring fact.  Rather, best-practice counsel condones transparency, clarity, and timely, factual representation of corporate news–good or bad.
 
The corporate executives at IndyMac are accused of making false and misleading disclosures about their company at a time when its financial condition was rapidly deteriorating.  Perhaps in time, we’ll learn if they were counseled by IR/PR pros or not.
 
As Lorin L. Reisner, deputy director of the SEC’s Division of Enforcement, said in a statement, “Truthful and accurate disclosure to investors is particularly critical during a time of crisis, and the federal securities laws do not become optional when the news is negative.”
 
We and our fellow professional communications brethren couldn’t agree more with Reisner.  These IndyMac Bancorp officers now need legal representation.
 
Ironically, communications counsel is crucial more than ever, since the fight will continue in the court of public opinion, as the executives look to prove their innocence and reestablish their careers.
 
To many outsiders, this could sound like a job for a (spin) doctor.  The truth is that IR and PR pros, many of whom– yours truly included–began their careers as journalists, abhor the notion of spin, including the word itself.    There is no cure-all medicine for managing a crisis.  Only solid thinking and communications skills will win the day; certainly not a job for a doctor of spin.

 

Roger Pondel, rpondel@pondel.com