The Bloomberg Move

The decision by New York City’s Mayor Bloomberg to stand behind Goldman Sachs (GS) — in the wake of the negative news commotion raised when former GS employee Greg Smith damned the firm's culture in a major New York Times op-ed piece — was neither unexpected nor inappropriate.
The question is: was it handled properly? And did the mayor best serve all of his constituencies?

He had to show some solidarity with GS, a major taxpayer and possibly one of the biggest customers, globally, for his company’s terminals (which dispense critical financial information by the minute). Further, Michael Bloomberg is himself "part of Wall Street" ... it's where he made his fortune. Goldman, as The Times has reported, citing a variety of sources, has been “down-on-its-luck." Bloomberg went to the GS offices to do a “pick-me-up” and shake hands with the CEO and others. He intended to make them feel better. He did. But that was only the half the job.

Where did Bloomberg go wrong? He quite properly made a statement supporting the importance of GS as an employer and taxpayer.

But he then clearly expressed his contempt for employees who chose to leave an employer, and particularly long-term employees. Was this comment necessary in the very free society in which we live and work? Obviously, he could not support, nor should he, an employee disparaging his or her former employer publicly. But I felt Bloomberg erred in not explicitly acknowledging the reciprocal obligations which employers have in maintaining a strong and vibrant culture for their employees — which is at the heart of any business! That is what attracts and keeps clients. When people and clients start leaving and saying nasty things, it is not a good sign for any business; particularly one like Goldman that has faced an extraordinary level of public scrutiny.

Since the financial crisis, the culture at GS has become a focal point for critics. There is a growing popular concern about the values that Greg Smith — a 10-year insider — expressed in his op-ed piece, which caught the popular fancy, as his were charges that have been leveled against Wall Street time and again. The Mayor of New York represents these folks, who represent a wide range of backgrounds, including disaffected Wall Street employees and shareholders. In my opinion, Bloomberg should at least have acknowledged the legitimacy of their concerns as well.

Perhaps if he had made his statements from City Hall, rather than at Goldman Sachs itself, Bloomberg might have felt freer to objectively address the topic, appealing to both Wall Street and the other 99%. After all, cultural strength is an important issue for all of a company's stakeholders.

Lessons Learned: The Komen-Parenthood Affair

Lee Davies, a Group Vice President in Makovsky’s Health Practice, is the guest author of this blog on the recent controversy between Susan G. Komen for the Cure and Planned Parenthood.

What happens when an irresistible force meets an immovable object?

According to the laws of physics, that’s when energy is created. And there certainly was a lot of energy generated when Susan G. Komen for the Cure notified Planned Parenthood Federation of America that it was withholding $750,000 in planned grant funding for breast cancer screening.

The move apparently stemmed from a change in its grant guidance last October, restricting grants to organizations under federal or state investigation – including Planned Parenthood, which, lightening rod that it is, is perpetually under federal or state investigation.

But politically motivated or not, one thing is for sure: media attention was loud and strong! Rarely do patient advocacy associations take each other on head-to-head – usually these groups take the high road and “play nicely.” So, from a communications perspective, who did what – and how well did they do it?

Planned Parenthood appeared to own this story. They turned a “victim” role into a powerful, proactive advocate voice. Within hours of official notification, they issued a call-to-action to constituents and mobilized a broad and deep communications effort, including an e-mail communiqué from president Cecile Richards; outreach to influential public officials sympathetic to the Planned Parenthood mission (including New York Mayor Michael Bloomberg, who offered to make up part of the funding shortfall); media engagement, especially with high-profile professional women reporters (Barbara Walters, Andrea Mitchell); as well as leveraging the blogosphere and commandeering the social media space. Their multi-pronged campaign achieved critical mass and created an eventual tipping point resulting in Susan G. Komen withdrawing its grant denial.

Susan G. Komen, on the other hand, appeared to let the story spin out of control. They knew they were taking a highly controversial position. Given their potentially inflammatory stance, they could have done more to prepare the market environment to receive potentially difficult news. Moreover, did they have a “crisis” plan in place to address the media storm that immediately swirled? The impact on reputation or “brand equity” cannot be easily determined. According to news reports, daily individual contributions may have actually risen in the days following their announcement – a reflection of the fact that controversy always has two sides. In the long-term, though, Susan G. Komen’s credibility may have been damaged by muddled communications and contradictory actions. Time and a raft of positive communications – especially with Planned Parenthood – will be necessary to counter this.

So what are the key learnings for us, as communicators, when it comes to delivering controversial news?

• Create a receptive environment in advance by engaging with key audiences and explaining your planned actions.

• If possible, deliver messages in a face-to-face environment, and answer questions forthrightly.

• Enlist the support and aid of outside experts who can help deliver the message.

• Develop a strategic plan anticipating media and audience response, and be ready to either pre-empt or react quickly.

• Engage early and often in the social media space. Monitor discussions and anticipate the tipping point.

• If you are the recipient of negative news, assess your position and its impact, and be prepared to mobilize your stakeholders to take a desired action.

Now that the dust may be settling, one thing seems certain: this communications controversy is likely to become a case study in the power of social media, grassroots constituency relations, advocacy relations and public policy development. It is our job to learn from it.