Posts Tagged ‘Crisis management’

When the Apple Falls Far from the Tree

November 2, 2012

On Monday, Apple announced the firing Senior VP of iOS Software, Scott Forstall, for refusing to sign a public letter apologizing for Apple’s faulty Mobile Maps. Forstall’s team was responsible for the app, which replaced Google Maps on the iPhone 5. It drew a storm of criticism as soon as it launched; it was so bad many even claimed it posed a danger to drivers using it. Just a week later, Apple’s CEO Tim Cook issued a public apology, suggesting that customers try out competitors’ map apps for the time being. The Maps fiasco was just the latest in a string of Apple failures since Steve Jobs’ death last fall, causing many to question the future of the most valuable company of all time. Just days after Jobs’ death, Apple launched the iPhone 4S with Siri, a new personal assistant app with voice recognition.  Siri has not lived up to its hype.

With Mobile Maps, Apple clearly made a mistake launching a faulty product. Still, what was even more abhorrent was Forstall’s refusal to apologize for it. A basic rule in handling a crisis is that when a company (or individual) makes a mistake, they need to apologize, fast. During  college, when I was a server at a chain restaurant, an acronym our management gave us for handling any and all guest complaints was L.A.S.T: Listen, Apologize, Solve, Thank. We smoothed over the vast majority of problems by simply listening to the complaint, offering a sincere apology, rectifying the situation and thanking the customer for continued patronage. This applies to more than just customer service, it makes the difference between good PR and bad PR.

In contrast, Amazon stands as a shining example of how great PR can allow a company to launch even a faulty product successfully. When Amazon debuted the latest Kindle reader, Paperwhite, the company put a clear disclaimer on the Amazon homepage explaining various shortcomings of the product compared to previous models. This undoubtedly avoided a lot of negative backlash.

An air of secrecy has long been a defining part of Apple’s brand.  Under Steve Jobs, secrecy added to the brand’s exclusive allure.  However, Apple won’t be able to continue releasing inferior products at luxury prices, only to offer half-hearted apologies later on. A recent study found that for the first time ever, the percentage of iPhone owners who plan on buying another Apple phone has declined. In our ever-evolving media landscape, transparency is more important than ever. Hopefully, Cook’s new executive management team will learn from the mistakes of their predecessors.

Diana Kim

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Five Key Lessons We Can Learn from Mike Wallace

April 10, 2012

In May, 2005, I had the pleasure of sitting in the audience when Mike Wallace took the podium as keynote speaker at the annual “Big Apple” awards celebration of the Public Relations Society of America – New York Chapter. Then 87 or 88 years old, he must have been the oldest speaker PRSA-NY had ever had. You could hear a pin drop as he spoke.

In the public relations industry, Mike Wallace was one of the most respected and at the same time, most feared journalists ever. He could reduce public figures to blubbering idiots with just one simple question.  Even the rumor that Mike Wallace had a research crew investigating a company was enough to send executives and PR departments into a tailspin. ABC News’s George Stephanopolis commented that Wallace became more famous than most of his subjects by mastering the “in your face” interview. ABC News reporter John Donovan, in a story about Wallace, noted that Wallace “had a gift for making the unaskable askable.” Just one example: he had the nerve to ask Nancy Reagan how much President Ronald Reagan got paid for visiting Japan after he left office.

Much has been written about this legend of TV journalism in the last few days, but from a PR perspective, the best piece I’ve read was by Larry Thomas, president of Latergy, a video services firm. I direct you to his article in a communications industry publication CommPRO.biz, “Remembering Mike Wallace: Lessons from a Master Interviewer,” which summarizes the influence Wallace had into five key lessons for public relations, corporate communications and investor relations professionals .  Thomas ends his blog by saying, “RIP, Mr. Wallace. I’m glad I was able to see you (on TV, not at my office door).”  I can certainly echo that.

Lucy Siegel

Ad and PR Agencies Tackle Social Media Differently

November 16, 2010

 

The public relations agency industry in the U.S. has fared better than most marketing/communications disciplines in this recession for two reasons: the surge in importance of social media, and a much greater awareness by top executives of the importance of PR.

In a matter of hours, a few negative comments on Facebook, Twitter or any number of other online sites can spread quickly to a global,

"What’s that I hear? Oh, geez... it's a Facebook stampede of unfriendly friends. Robin, get the Batmobile ready to rock & roll. Fast, before they ruin the reputations of the Powers That Be." "Holy emoticons, Batman! We gotta get there before they reach the C-suite!"

Internet-wide audience, as well as to offline media. As result of online and other corporate crises that have crippled companies recently, the work we do in PR, especially in reputation and crisis management, has suddenly become more visible to and valued by CEOs, CMOs and other top managers.  So, while companies have cut ad budgets, PR budgets haven’t been so badly affected, and some have actually grown.

A lot has been written about ad agencies working hard to get a piece of the social media pie, and succeeding.  But this doesn’t mean that ad agencies are taking PR agencies’ slice of the pie.  To better understand the role of advertising and PR in social media, we need to examine the role of each in social media.

We could view social media networks as both opportunities for promotion and as an ongoing challenge to the management of both corporate and product reputations.

The public relations industry is best equipped to take charge of the reputation management aspects of social media, hands down.  Advertising professionals are trained to send out messages crafted just the way the marketing department wants them.  However, social media networks are another ball of wax.  The audience answers back, and sometimes not in a positive way.

Ad agencies aren’t accustomed to two-way dialogue with the audience, nor are they trained to respond without being promotional, which is all-important when communicating in a social media network.  This, however, is exactly what PR professionals do well. When we provide journalists with information in a way that communicates carefully crafted messaging, we can’t guarantee they will use the information the way we want, or use it at all. It takes a great deal of skill to present a company’s messages to the media succinctly and persuasively, and then to respond quickly and honestly to journalists’ doubts and criticisms in a way that will serve a company well.  This process has prepared us for dealing with people in social media networks.

But now for the promotional potential of social media: promotion is where ad agencies excel, although the PR industry is holding its own in this area, also.  The way I see it, ad agencies are using social media as an extension of their traditional creative skills. The Old Spice campaign, for example, consists of a series of video ads that are spread around virally using networks such as Twitter. Ad Week noted in an article this summer that, “The [Old Spice] effort proves that ad agencies can use the social media tools at their disposal to embed their work as deeply in digital culture as their offline ads are seeded in popular culture.”  The same article quoted blogger Edward Bocches, Chief Creative Officer at Interpublic Group ad agency Mullen, who said that what’s new is the expectation that the creative teams in ad agencies will come up with new material in response to what is happening online within hours, rather than in the weeks.

Ad agencies may be deploying new tools (i.e., Facebook, Twitter and YouTube) for the delivery of ads and sales promotion, but that doesn’t mean they’re doing a different kind of work than they were doing before.  I don’t see ad agencies going after the public dialogue aspects of social media.  Public dialogue is the traditional domain of PR agencies, whether the dialogue is online, in traditional media, in speeches, or wherever it takes place.  Ad agencies are focusing their social media efforts on promotion, using humor, fun, sexiness, and other such attention-getting devices.

The advertising and public relations industries have never worked well together. What’s really evident to me is that we had better start to do so now, for the sake of our clients.  Since we’re playing in the same sandbox and using the same tools, it’s more important than ever for advertising and PR professionals to understand each other’s disciplines better and work in greater harmony.

Lucy Siegel

Can a Good Corporate Reputation Be Unprofitable?

October 8, 2010

This week the Wall Street Journal featured an article about risk to corporate reputations that cited a survey in which 80 percent of CEOs said this was their top concern. The writer concluded, however, “Reputational management is still too often something that companies feel they should do rather than something that they want to do. A good reputation is hard to quantify and may actually get in the way of delivering short-term profits or cutting costs.”

Reasonable people could disagree about how a corporate reputation should be quantified.  But when faced with surveys showing increased or decreased approval of the company, most would agree on the direction in which reputation is heading.   That alone is a valuable piece of information for a CEO to consider.

I don’t believe that a good reputation can interfere with positive short-term corporate results or with cost-cutting. The author seems to be implying that a company may need to produce poor products or act in a way that is unethical or inhumane in order to make a short-term profit. Since the reputational fallout from this kind of corporate behavior can have a negative effect on long-term profits, corporate managers who believe it pays to sacrifice reputation in order to make a short-term profit are very short-sighted.  

Cost-cutting such as staff downsizing doesn’t necessarily harm reputation if done in a logical and sensitive way.  Even though employees may fear and resent the effects of layoffs, in recent years they’ve seen other companies going out of business.  They’re aware that cost-cutting, even layoffs, may be necessary for survival.  

However, the author is right that many corporations don’t like to deal with reputation management.  I believe the reason most corporate managers are uncomfortable with this part of their business is because there are no formulas for success or for solving problems.  Each decision that has to be made is a judgment call, and those related to reputation sometimes have to be made immediately. For example, when there’s a crisis, there’s no time to appoint a task force to study the issue and make recommendations. The direction has to be decided at the top, and the boss’s decisions can be criticized later if things go wrong.   

This is where corporate PR counselors, whose sole focus is reputation, can be extremely valuable. They are trained to look at the issues from all sides and analyze the way different actions will be perceived by key audiences. 

Foreign companies in the U.S. and start-ups, the types of clients we specialize in serving at Bridge Global Strategies, are particularly prone to neglecting corporate PR. Start-ups generally put public relations emphasis on their products rather than the corporation. Understandably, they need to build revenue quickly in order to survive. Foreign companies frequently don’t understand the need for corporate PR in the U.S. and they, too, often focus their communications efforts totally on sales.  But if corporate reputation is damaged, customers won’t buy, no matter how much sales promotion a company does.

As reluctant as many companies are to spend the time and money on corporate PR, the cost of ongoing reputation management counseling is trivial compared to the cost of a damaged corporate reputation, or the effects of being entangled in serious crises.

 Lucy Siegel


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