Shame on the New York Times

It is distressing that a publication with the stature of The New York Times would slam the term “public relations” as a pejorative at best and a phony empty suit at worst…especially in a day when it is defined in Webster’s Dictionary, Wikipedia devotes pages to it, and organizations spend millions on it.

In referring to President Obama’s new task force, the Residential Mortgage-Backed Securities Working Group, designed to investigate abusive practices in the mortgage industry, the newspaper published Gretchen Morgenson’s column, in which she writes: “Some greeted this new task force…with skepticism. It is an election year…and many might wonder if this [new task force] is just a public-relations response to the outrage against [those who] almost wrecked the economy.”

Would The New York Times refer to its own aggressive public relations program as superficial? Even if the Working Group were just a shell, why not call a spade a spade, as opposed to insulting an industry that the newspaper itself depends upon to bring it a percentage of its news and some of its revenues? Further, The Times recently ran an article on the definition of public relations being updated to take the internet into account. Isn’t this two-faced?

Webster’s Dictionary defines public relations as “the business of inducing the public to have understanding for or goodwill toward a person, firm or institution.” Wikipedia offers several definitions, among them, “public relations is the practice of managing the flow of information between an organization and its publics.” Another: “the relationship between an organization and its stakeholders.”

During his debates with Senator Stephen Douglas in 1858, Abraham Lincoln acknowledged the importance of public relations when he said, “Public sentiment is everything. With public sentiment, nothing can fail; without it nothing can succeed.” He didn’t just preach, he practiced. He was one of the first presidents to use tools of our profession to shape public sentiment.

Who Speaks for Costa in Crisis?

We have yet to hear in a major way from the CEO of Carnival Corporation regarding the shipwreck of the Costa Concordia off the coast of Italy, despite the fact that Carnival owns the Costa Line. Rather, Pier Luigi Foschi, the CEO of Costa’s Italian unit, has been the company’s face to the public, and he has blamed the ship’s captain for the tragedy.

The issue is whether CEO Micky Arison, founder and builder of Carnival, should be the lead spokesman with the press and other third parties…rather than the CEO of a subsidiary unit. Arison believes in giving great independence to his business unit heads, according to a story in the Wall Street Journal on January 23. The question is whether this will be best for his business, one of the biggest brands in the marketplace, over the long-term.

By maintaining a low public profile, the WSJ notes, Arison hopes he can distance the Carnival brand name, and thereby the safety issue, from the Costa disaster. Carnival has 101 ships, and only 15 sail under the Costa brand. “If he talks, Carnival is speaking,” the story points out, and Arison is not granting interviews. He has, however, tweeted his sadness over what occurred and his vows to help all victims; recently he offered $14,000 per victim.

Here’s how I see it. Arison’s hands-off approach has some merit from a management standpoint, but does it hold up with the public? Booz & Company, the leading management consulting firm, found in its recent CEO study that the CEO has longer tenure at companies like this – 6.9 years on average vs. 4.9 at more operational type firms. These types of CEOs also generally bring higher returns for their shareholders, the Booz study notes.

But even Warren Buffet, who has a management style similar to Arison’s (but on a grander level), at risk of a tarnished reputation, had to speak out on the questionable ethics of his heir apparent concerning a company he proposed that Buffet acquire. The heir apparent was forced to resign. But that was all happening at the corporate level and did not involve subsidiaries.

In this case, we have brand protection, safety and shareholder value issues that cross the parent. Speaking out when the spotlight is on you is most likely the action I would recommend in the U.S., where the public respects mea culpa and wants to hear from the top guy. But this situation is not black and white. Arison’s attempt to keep a low profile, thereby protecting the Carnival brand name and putting the focus on Costa and its CEO, might work for a while. But as the lawsuits mount and the trial of the captain takes place, it will be hard for Arison to escape demanding journalists, cameras and lights.

Time Warner Cable's “Customer Appreciation” Blunder

Paul Lee, an intern at our firm, is the guest author of this insightful blog on the recent communications fracas between Time Warner Cable and Madison Square Garden (MSG).

On New Year’s Day, after failing to come to terms on a new contract, Time Warner Cable blacked out all MSG Network channels, leaving approximately 1.7 million Time Warner Cable customers in the Greater New York area unable to watch their beloved Knicks, Rangers, Devils and Islanders on television.

The public battle between the two parties has grown increasingly intense and, as usual, customers are being used as pawns in the fight for negotiating leverage. When faced with the threat of being blacked out, MSG immediately began airing commercials urging Time Warner Cable customers to switch television carriers. Time Warner Cable countered by airing retaliatory spots criticizing MSG’s steep contract demands. Then, MSG upped the ante by arranging Knicks and Rangers “viewing parties” at various restaurants and bars throughout New York City, which induced Time Warner Cable into committing an extremely costly blunder at a very critical time.

As part of an ill-conceived attempt to “one-up” MSG, Time Warner Cable launched a contest to send “10 lucky winners” to Charlotte, North Carolina to see the Knicks play the Charlotte Bobcats at the Time Warner Cable Arena. They went on an all-out blitz to promote the sweepstakes, airing frequent commercials on multiple channels and even running full-page ads in New York City newspapers.

Time Warner Cable officials described the sweepstakes as a “customer appreciation gesture,” but my recent conversations with numerous Time Warner Cable customers indicate that the contest made them feel less appreciated than ever. Customers described feeling antagonized and alienated upon seeing ads for the sweepstakes, and many even felt insulted. It’s not hard to see why. The contest — a raffle for tickets to attend a Knicks road game at Time Warner Cable's namesake arena — came off as a cheap and cynical attempt to buy customer loyalty and, unfortunately for Time Warner Cable, their carelessness has dealt a damaging blow to their credibility in a very sensitive situation.

There is a simple lesson to be learned from Time Warner Cable's customer appreciation blunder: never underestimate the intelligence of your customers – especially in the internet era – and never let the apparent brilliance of an idea blind you from seeing unintended negative consequences. When engaged in sensitive situations affecting a large number of customers — such as a contract standoff — it’s crucial for companies to make sure that their customers feel appreciated, but raffles and other cheap marketing gimmicks are rarely the solution.

Companies should stick to communicating openly and honestly with their customers. They should keep customers informed about their position, express a deep commitment to finding a resolution and find real, substantive ways to deliver value in the interim. These are the safest and most effective ways to sustain the confidence and loyalty of your customers in highly sensitive situations.

The Internet as Leader

I’ve been fascinated with the amazing worldwide expansion of the Occupy Wall Street movement, and yet have seen very little coverage of how it happened.

Was there a leader driving this protest into major countries throughout the world? Where has the money come from? Is there a governing body making decisions that enabled the group to grow?

Based on cursory research, I can find no single leader driving this movement. It is a true child of the internet. It seems to have all started with a blog posted by the Canadian-based Adbusters Foundation urging that there be a protest against greed and to encourage greater income equality. The protest suggestion was restated in an email sent by Adbusters to its list and it was “spontaneously taken up by all peoples of the world,” according to Micah White, senior editor of Adbusters Magazine.

It is unique to have a spreading movement managed without an adept leader at the helm. The Occupy group, however, attributes its governance to a General Assembly — it says no one leader runs it; rather, various people speak and lead at different times. Thus, it appears to be the epitome of democracy, unlike most other protest movements.

It is my conclusion, therefore, that the internet, in effect, is the leader. It has led the global expansion. It has influenced the very democratic approach because of its communications range and “all hands” approach. Certainly, without the internet, the participants would not be talking to each other and both encouraging and enabling a global conversation. Occupy’s very effective slogan, “We are the 99%,” is all over the internet, and it is motivational. The internet serves as a fundraiser and has helped collect over $750,000, applied to support the needs of the protesters.

Once again, communications is the power behind the throne.