Monday, July 28, 2008

Building Trust: Our Clients’ Biggest Challenge

Consider the following facts:
  • According to an article on The Professional Network, when it comes to trust, consumer-generated media consistently outranks professional sources.

  • For the second consecutive year, “a person like me” (i.e., a peer) is the most trusted spokesperson in the U.S. (at 51%) and across North America, the European Union and Latin America. (In Asia, it’s second only to physicians.)

  • Rank-and-file employees are more trusted than CEOs by opinion leaders in the U.S. and the three largest economies in Europe (the U.K., France and Germany).
So, how does one maintain a sterling reputation in this increasingly democratic world in which your reputation is in the hands of literally millions of people, both inside and outside the corporation?

1. Outreach. Public relations has not traditionally capitalized on one-to-one outreach, but the best defense is a good offense. We really need to ramp up our outreach efforts. And we shouldn’t confine our activities to the internet. A couple of years ago SAP invited a group of independent enterprise bloggers to attend a conference, spent up-close-and-personal time with them and treated them as if they were valued members of the mainstream media. It paid off big time … in stronger relationships, positive coverage and lots of good will. We need to multiply that model.

2. Feedback. We also need to figure out how we know what’s getting across. This means establishing an elaborate, sophisticated feedback system. Our business needs to emphasize this area since the majority of companies have traditionally invested minimally in feedback mechanisms. Nevertheless, there are many useful metrics. Blog monitoring is just one example … and it’s one that is surprisingly underemployed.

My firm undertook a study in 2006 which revealed that that only 20% of Fortune 1000 companies had a blog monitoring system in place. Today, according to research from Aberdeen Group, 65% of best-in class companies have a formalized process for monitoring the social or consumer-generated media. In fact, best-in-class companies are 680% more likely than poorer-performing companies to monitor the social media.

3. Infiltration. Identify your adversaries and answer the questions they’re likely to ask — before they even think to ask them. I learned this lesson many years ago, as an account executive. The client, a leading Michigan based utility, faced opposition from the minority community on a proposed rate hike. We analyzed the organizations that represented the greatest challenges and identified and trained employees to join these organizations, and then to answer member questions … thus building bridges and making allies before the critical vote. We won.

4. Organization. Public relations (within a company) may need to be a bigger, more loosely structured, decentralized structure, with each person responsible for several key constituencies to dialogue with. Plus, everyone in your “army of light” will need to be intensively trained so that they can embody the corporate values of an authentic enterprise.

Technorati Tags: The Professional Network, trust, reputation, outreach, feedback, blog monitoring, Aberdeen Group, infiltration, organization, consumer-generated media, business, communications, public relations

Monday, July 21, 2008

The Boos That Blew It

Sometimes the enormous pride that New Yorkers take in certain pillars of our city morphs from pride to arrogance. And I have always felt that arrogance warps one's perspectives.

The pillar I am referring to is the New York Yankees. The moment was the All-Star Game (American League vs. National League) at Yankee Stadium in New York last week; the game was located here to celebrate the national esteem in which the Yankees and the Stadium are held before it is razed in favor of a new stadium. Following an impressive pre-game ceremony in which dozens of Hall of Famers marched in a procession, every player was individually introduced to a crowd of approximately 60,000. When each of the three Boston Red Sox players who made the team (the Sox are arch rivals of the Yankees) was introduced, the Yankee fans at this nationally televised event booed them. And the booing was sustained throughout the game, each time each Red Sox player got up to bat, except when a Sox player tied a very close game. Then, of course, our fans cheered because it was a factor in a potential American League victory.

Well, we may have great pride in our Yankees, but we certainly do not have much pride in ourselves. What kind of hosts are we? And to reveal our worst traits on national television. This only feeds the New York reputation for arrogance, which I am not proud of.

At a game where inter-city rivalries within a league are always set aside, it was distressing to see Yankee fans exhibit such poor sportsmanship and commit such a public relations blunder, thereby embarrassing Major League Baseball before millions at one of its showpiece games of the year.

Technorati Tags: New Yorkers, pride, arrogance, New York Yankees, All-Star Game, American League, National League, Boston Red Sox, Major League Baseball, rivalry, business, communications, public relations

Monday, July 14, 2008

Skepticism About Starbucks

This one is hard to fathom: Starbucks falls into a trap with Wall Street that I thought was usually the province of the inexperienced and unannointed.

What did it do? Something we always counsel client companies not to do: make promises to Wall Street, setting unrealistic expectations, and then not having the courage to say, “We blew it” early on. Pressure builds and suddenly Wall Street is “running a company’s business.”

A Makovsky + Company investor relations principle and one that I believe is shared by all investor relations counselors: always advise clients to run their businesses in the best interests of the shareholders -- or better yet stakeholders -- rather than by creating long shot promises which would make Wall Street happy, unless both coincide. By doing such, everybody wins. Why put a company in a vise?

According to The New York Times business section article, July 4th, commercial real estate brokers nationwide, on the heels of Starbuck’s announcement that it would close 600 U.S. stores, said that “the company was so determined to meet its growth promises to Wall Street that it relaxed its standards for selecting new store locations.” To meet the obviously impossible goal meant putting stores or leased operations within yards of one another.

The story noted that in 2004 Starbucks said it would double its pace of expansion with a goal of reaching 15,000 stores in the U.S., when it now has only 7000.

Since this was a company known by Wall Street for its rigor in selecting locations, the decision to close 600 stores, while partially related to the economy, is a blight on Starbuck’s reputation beyond Wall Street. By “living a lie” – in one fell swoop – the firm negatively affected its economic fortunes, its standing with Wall Street, and even potentially impacted the consumers who support it.

Now, of course, Wall Street should applaud the reality of its decision. Reality-based management, of course, in both the long and short-run is the best for the shareholders, Wall Street, and overall reputation.

Starbucks’ analysts will now approach the company with a level of skepticism, which did not exist before.

Technorati Tags: Starbucks, Wall Street, investor relations, reality-based management, The New York Times, analysts, business, communications, public relations

Monday, July 07, 2008

The Answer May Be in a Smile

Like so many other fans, I was totally disgusted with the manner in which the New York Mets fired manager Willie Randolph. First, speculating about it for so long in the media ("twisting in the wind") and then, rather than terminating him in New York, having Willie take the trip to California where he led the team to victory and then, firing him ... at 11PM Pacific Time (that's 2AM in New York). Can you imagine! We all know what should have been done – the corollary of what was done. There have been endless articles about it. There's not much more to say.

While I periodically disagreed with his managerial moves, I continue to wonder how much was Willie's fault - and the tone he set - and how much was the poor chemistry among the players which produced all the errors, poor pitching, lack of hitting, etc. Without being in the locker room, I will never know.

What I do know is that in photographs and interviews, this is a team (and I mean each and every one of them) that rarely smiles. It hit me about a week or so ago in the midst of all the "Willie tumult" when Carlos Beltrán hit a home run and broke out in a big grin as he cleared the bases. Previously, I never saw him do that. "Wow." I said to myself, "what a great smile!" And we know that David Wright and Jose Reyes have poster boy smiles. But poster boy or not, this generalization about not smiling applies to almost all of these guys. You rarely see them smiling when the camera is focusing on them during games (okay, I can understand that) - but not even in still photos in the print press - even when they win.

One can conclude that they may not be happy, that they are a downbeat bunch. Think of the impact an occasional smile would have on the fans and perhaps on the players themselves. It's an image advantage. It stimulates attendance. It's contagious. It changes attitudes toward oneself and each other. It possibly could have an effect on the team's won-loss record. The Mets need a shot in the arm ... or maybe a tickle!

After all, despite the ho-hum first half, the Mets are only 3 ½ games out of first place. They could turn it around in no time.

But I bet it's not going to happen without smiles.

Most of us believe that happiness is the result of a lot of things: good health, happy home life, a fat wallet, a World Series championship. But according to a study spearheaded by Sonja Lyubomirsky, a professor of psychology at the University of California, people aren't happy because they are successful. They're successful because they are happy.

I've personally found that smiling forces optimism and confidence and that the latter two breed success. So how about it, guys?

Technorati Tags: New York Mets, Willie Randolph, Carlos Beltrán, David Wright, Jose Reyes, smile, happiness, Sonja Lyubomirsky, University of California, success, business, communications, public relations