GIFTS DELIVER MESSAGES

Great public relations requires empathy — the ability to put yourself in the shoes of your audience — so that you can deliver messages in the self-interest of that audience. This is true whether you’re engaged in a major corporate campaign or merely a relationship with another individual.

The most obvious example of the latter is during the holiday season, when you receive someone’s name in a “Secret Santa” gift exchange at the office or when you’re looking for the perfect presents for family members or friends. What do I buy for them? What do they need? What are their interests? For example, if I buy a book, would they prefer history, romance or a cookbook? What choice do I make to underscore my understanding of and respect for the recipient?

Clearly, gifts deliver a message. The more individualized the message — the more it demonstrates your affinity for and emotional connection with the recipient — the more likely it is that your gift will evolve over the years from just another present to a keepsake with real sentimental value. Objects like an autographed book with a personal message or a one-of-a-kind antique can really touch a chord.

Well, my then-5-year-old son, Matt, did that for me about 20 years ago. This was the first of many times, but this holiday gift stands out in my memory. Why? Because he made it himself. It is a small, round, blue clay paperweight with a doughnut hole, covered with silver-colored nuts and bolts. It is about three inches in diameter. And it is something that catches your attention. It reflects his sense of design and color. Perhaps, even his ability to manage a project to completion. Today — and for many years now — it sits as a memento on my desk at the firm. It reminds me of Matt’s childhood and his strength as an adult.

This gift has a “sticky” message that touched my heart — which is the underpinning of every relationship, whether between an organization and its constituents or just two individuals.

Technorati Tags:communications, public relations, Makovsky

A HOLIDAY GIFT FROM PR TO THE I.R.S.

Billions of dollars will be flowing into the U.S. Treasury shortly, because of an incentive program that rested on a carefully crafted international publicity strategy. Without the latter, this “windfall” could never have occurred.

What was it and how did it happen? For years the Internal Revenue Service, the U.S. tax collector, had been after Americans who had set up bank accounts in Switzerland to avoid paying taxes. At the center of this violation was the Swiss banking giant, UBS, which had admitted selling off-shore financial services that enabled tax evasion and agreed to a $780 million fine. UBS also agreed to turn over the names of about 4,450 American clients suspected of tax evasion. But this was just the tip of the iceberg.

According to an article last month in The New York Times, 14,700 Americans living and working in over 70 countries — with secret foreign bank accounts — took advantage of an aggressively publicized amnesty program for those who came forth by the mid-October deadline. They “were lured” to the program to avoid the risk of potentially ruinous fines, back taxes and possible jail time.

Some clients are challenged to measure the value of publicity. With the right public relations program – in this case, an amnesty opportunity – the value was not only in recovering tax revenues, but also in putting a halt to an illegal cross-border business practice that will most likely not happen again.

According to Lynnly Browning, the author of the Times story, the U.S. plans to expand its program to more countries and also take a closer look at the web of financial advisors, lawyers, accountants and others who help banks sell these illegal services. The attention-getting fear factor is once again at work.

Technorati Tags: Internal Revenue Service, Switzerland,
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Lynnly Browning, tax evasionpublic relations, business, Makovsky,

FORECASTING THE GLOBAL ECONOMY

I had the good fortune of gaining some important insights from Michael Corbat, CEO of Citi Holdings and head of the brokerage and asset management unit of Citigroup, who spoke on the global economic outlook at a recent luncheon sponsored by the New York Chapter of the Swedish-American Chamber of Commerce.

Here are some highlights of his talk, which made a real impact on my thinking:

• The U.S. economy is recovering but will lag behind many other parts of the world. The overall recovery will need to be driven outside the U.S.: primarily in India, China and Brazil.

• European recovery will be fragmented. Spain has a terrible unemployment market. Germany is much stronger. Things are not great in Italy.

• We have moved from spending to saving. This will not be a short-term trend but a long-term one. People used to pay their mortgages first; but because home values are slipping, they are now paying their credit cards first and their auto loans second. Credit card delinquencies appear to have peaked.

• The debt to GDP ratio is 40% and will move to 70%. It will take two decades to return to 40%.

• Credit markets are still dependent on what is being put in by governments – consumer confidence is low and is largely centered on peoples’ estimation of the stability of their jobs and the value of their homes. Both are under considerable stress.

• At Citi, we’ve helped keep 700,000 people in their homes. Nevertheless, we’re involved in a large-scale cleanup. With a presence in 100 countries worldwide, we are reorganizing our business globally to focus on our strengths. We will be more like we were 20 years ago.

• Citi is tying itself to global customers to move their businesses forward. Many companies have become extremely defensive and need to build and invest in technology. We will co-partner with them to help them grow.

• The U.S. has a lot of rebuilding to do. We have undermined our credibility. The general expectation is that the U.S. will continue to be a power, but not as strong as it once was.


Technorati Tags: financial crisis, credit rating,
Michael Corbat,
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Citigroup, Swedish-American Chamber of Commerce,public relations, business, Makovsky,

The Reason Accenture Left Tiger

It is no surprise that Accenture, among his many sponsors, has decided to part ways with Tiger Woods—unlike AT&T, PepsiCo and Nike, which are still hanging on.

In my blog dated December 3, 2009, “Tiger’s Transgressions: Are They Really a ’Private Matter’?”, I noted that Tiger’s “reputation and advertising revenues, by and large, should remain intact.” However, that blog was written before the revelation regarding multiple affairs (plus serious issues surrounding his home life) came out. Possibly, other sponsor relationships will unravel if the flow of seamy details continues.

Accenture is the first major one to go (minus Gillette, which put the relationship on hold), largely because the global consulting firm’s ad campaign was centered on its research, analytics, strategy and precision. Accenture advertising says, “It’s what we call performance anatomy, and it’s one key finding from our groundbreaking research into the world’s most successful companies.” The image includes a graph line which denotes attitude as 50% and aptitude as 50%. Tiger’s strategic skills — indeed, his entire persona — have been indicted by his actions. Thus, the ad theme, “Go on. Be a Tiger.” is no longer valid. If you take the total picture into account, he no longer represents even Accenture’s tagline, “High performance. Delivered.”

As The New York Times notes in its article on Monday, December 14th in the Business Day section, “Big Risk in a One-Man Brand Like Tiger Woods,” that is indeed true. Nevertheless, Accenture has gotten great mileage out of its Tiger Woods campaign, which has gone on for years. Despite the risk, one-man or one-woman brands will continue to be a strategy that will be applied by companies in the future. Nevertheless, there will likely be a momentary pause.

Technorati Tags: Tiger Woods, crisis, communications,Accenture, The New York Times , communications, public relations, Makovsky

Bill Gates and Warren Buffett Speak Out

Recently, Columbia Business School hosted an evening with Bill Gates, former chairman of Microsoft and current chairman of the Bill & Melinda Gates Foundation, and Warren Buffett, chairman of Berkshire Hathaway. The event was televised on CNBC on November 12, 2009.

Some of their observations regarding character, philosophy, principles and the future (which I have paraphrased) are worth thinking about. They influenced my thinking and might influence yours, as well.

Question: Will greed ever go away?
Buffett: Greed will always be here.

Question: What is the most important thing you do every day?
Gates: Learning. Reading a lot and arming myself with information.

Question: What industry is going to produce the next Bill Gates?
Gates: Perhaps the energy business or healthcare. We haven’t solved a lot of medical problems and more will be solved. Both sectors have a chance to produce some significant leadership.

Question: What are your feelings about the future of the U.S.?
Buffett: I am enthusiastically optimistic about America.

Question: What keeps you up at night?
Gates: Little keeps me up at night. Well, long-term, I am concerned that our educational system is not improving as much as it should.

Question: What’s the one thing your MBA at Columbia prepared you for?
Buffett: I discovered my interest in investments.

Question: What makes you stand out from the crowd?
Buffett: If you can say, “We did what we did because we have a passion for it” -- that makes you stand out from the crowd.

Question: As you progress in your business career, what are the key things to remember?
Buffett: Consistency, focus and staying positive.

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The Foreign Government Investor in the U.S.:

Big overseas government investment funds from Kuwait, Singapore, Qatar and Abu Dhabi “that came to the rescue of (our) banks during the financial crisis are going home with their pockets full of bounty,” according to The New York Times Business section, December 7, 2009.

These foreign government funds, known as sovereign wealth funds, were the subject of a recent talk at Makovsky by Dr. Efraim Chalamish, an international investment law scholar and Global Fellow at New York University who spoke to our staff on perception and communications issues surrounding sovereign wealth funds investing in the U.S. Since many do not know a great deal about these funds, I did a quick interview with Dr. Chalamish following the talk. Here are some of the highlights of our conversation.

Define sovereign funds.

The terminology around sovereign funds is still a work in progress. The definition recently adopted by the International Monetary Fund and the sovereign wealth funds community includes three fundamental elements: ownership of the fund by the foreign government, an investment strategy that includes foreign financial assets and investing the funds to achieve key financial goals in the mid-to-long term.

How would you describe the perception barrier to foreign investment in the United States?

In general, the U.S. offers its foreign investors a relatively open regime for foreign investment, and therefore the U.S. receives a steady stream and a high level of foreign investment. However, various regulatory aspects of investment law are frequently used by U.S. politicians to promote political goals and serve as drivers for legislative changes. Since clarity and consistency are very important factors for foreign investors, the U.S. has to make sure that it communicates rapidly any such changes in investment law.

What are the top three things that sovereign wealth funds should consider when contemplating a business investment today in the U.S. and how should they approach the communications challenges here and in their own countries?

Overall, communications via the media can play an important role in the investment process by positioning the deal in the U.S. as furthering the strategic interests of both sides, improving cross border economic activity and creating jobs. Moreover, common economic interests can make allies out of enemies.

Beyond communications, here are three important points to consider:

First, the funds need to contemplate potential regulatory challenges to the investment. A significant investment in a strategic industry will lead to a governmental review that may delay the process. For example, the review may include measures such as limitations on the nationality of board members or a requirement to spin off certain company divisions -- all related to the level of control of the acquired company.

Second, since many of these funds will want to continue to invest in the U.S. in the future, the process must be a positive experience. This underscores the need to work closely with the U.S. government, building mutual trust and emphasizing the benefits to all parties.

Third, foreign governments need to communicate to their nationals the importance of long-term financial planning in order to achieve higher returns. This is especially important in countries that have traditionally invested their currency reserves in local assets and now might view jurisdictions, such as the U.S., as risky, particularly due to the recent financial crisis.

As a foreign investor, is it more important to manage perceptions in the government community or with the general public? Why?

In the case of foreign investment, it is important to manage perceptions in both communities. The Committee on Foreign Investment in the United States, a government body, can approve an investment or impose certain limitations on it. At the same time, it is also important for the general public to have a positive perception. As we learned from the Dubai Ports World story, negative emotions among the general public, driven by protectionist sentiments and local nationalist voices, can induce politicians to reject an investment which would otherwise have been approved.

Technorati Tags: investment funds, financial crisis , The New York Times, Dr. Efraim Chalamish, New York University, sovereign funds, International Monetary Fund ,foreign investment,
Dubai Ports World controversy, communications, public relations, Makovsky,

Tiger’s Transgressions: Are They Really a “Private Matter”?

A minor traffic accident for one of the great superstars of sports has escalated into a full-blown public relations crisis. Yesterday, Tiger Woods released his latest statement on the matter, saying, “I have let my family down and I regret those transgressions with all of my heart” and asking that reporters and his fans respect his respect his privacy.

“Personal sins should not require press releases,” he wrote, “and problems within a family shouldn't have to mean public confessions.”

It’s a beautifully crafted and moving plea, but also a little disingenuous. Unfortunately, as a result of his empyrean celebrity, Woods doesn’t really have a private life.
Avoidance of the press early on didn’t help Woods' case. He was wrong to reject questioning by police three times after making an appointment to speak with them and his subsequent failure to put all his cards on the table only increased the public's curiosity, while compromising his relationship with corporate sponsors.
Fortunately, Woods has spent so much time at the empyrean heights and amassed such a huge reserve of goodwill that I believe his reputation and advertising revenues will, by and large, remain intact. But he should now be aware that he is not invulnerable, and future buyers may be more hesitant. Because of his fame, he cannot expect the same “simple, human measure of privacy” of an ordinary citizen … particularly not today, when social media make everyone with a cell phone or a digital camera a potential gossip columnist.

Technorati Tags: Tiger Woods, crisis, communications, public relations, Makovsky