Crisis Musings

I'm Sorry I am Writing (AGAIN) About Apologies....

Chris Gidez — Tue, 04 Nov 2008 17:27:00 GMT

Main Entry:

apol•o•gy

Pronunciation:

\ə-ˈpä-lə-jē\

Function:

noun

Inflected Form(s):

plural apol•o•gies

Etymology:

Middle French or Late Latin; Middle French apologie, from Late Latin apologia, from Greek, from apo- + logos speech — more at LEGEND

Date:

1533

1 a: a formal justification : DEFENSE b: EXCUSE 2a2: an admission of error or discourtesy accompanied by an expression of regret <a public apology>3: a poor substitute : MAKESHIFT

That’s the definition of “apology” from Merriam-Webster.

So what? You ask.

The topic of corporate apologies is something I wrote about earlier in the year, but I feel compelled to revisit the matter, after reading a piece in the October 21 issue of USA Today entitled, “Why 'sorry' isn't in many CEOs' vocabularies anymore.”

The take-away of the story was as follows: “As the world comes to grips with the biggest financial crisis in seven decades, the mea culpa machine has ground to a halt. Apologies, encouraged in recent years by the crisis-management industry, have dried up — even apologies deployed as a business or political strategy.”

First, I am not so sure I agree with this. I have seen no quantitative data to support such a conclusion.

But the following passage is what caught my attention:

Companies have found that heart-felt apologies can decrease the likelihood of lawsuits if they're well crafted and don't come off as "Sorry I got caught," but express regret, assume responsibility and map out a plan to avoid repeating the offense, says Leslie Gaines-Ross, chief reputation strategist at public relations firm Weber Shandwick and a longtime student of apologies in crisis management.

I have two problems with this.

First, to suggest that a company can reduce or eliminate its litigation risk by simply apologizing is a pretty bold claim to make, and rather implausible, if you ask me. If indeed this were true, wouldn’t every general counsel simply tell the CEO to apologize? That would certainly save the companies millions of dollars, and ease the strain on our courts.

I fear that people are drawing conclusions about the power (or danger) of apologies with little or no quantitative data to support those conclusions. I have been in this business for more than 20 years, and have worked with any number of companies involved in litigation, and I don’t recall an instance where a plaintiffs’ lawyer has been able to convince a judge that a letter of “apology” published in a newspaper is alone tantamount to acknowledging liability.

Nor have I seen an instance where such a communication enabled a company to prevent the filing of litigation.

The second problem I have with this assertion is the notion that a company should “assume responsibility.” If the company believes it is responsible for a problem, then it should say so. But I would never counsel a company to make such an assertion unless it was certain of its responsibility. That’s bad PR advice, and even worse legal advice.

According to Merriam-Webster, an apology is an admission of error. I have seen lots of letters from CEOs and companies where they express sympathy or regret or understand for a situation, without saying “it’s our fault.” Does that make the communication any less effective?

In many cases, the fault is not the company’s. So why SHOULD it say, “I’m sorry” if the implication is, “it was my fault”?

A colleague told me about a piece of legislation being considered in Canada, The Uniform Apology Act.

The provisions of the proposed law make the protection accorded to apologies clear by providing, first, that an apology is not an admission of legal fault or liability, express or implied; second, that an apology is not relevant in determining fault or liability; and third, that an apology is not admissible in evidence to establish liability.

That we have come to the point where we need legislation to protect a company that offers an apology is a sad statement about the condition of our society.

But as I said in my earlier posting on this topic, way too much is made of apologies. Yes – companies should communicate empathy and concern. And when a company is responsible for a problem, it should say so, and apologize if appropriate.

But a company need not fall on the sword simply because it is seen as being the right thing to do.

Companies successfully work their way out of a problem because they address the problem, and not just the perception of the problem. In other words, a business problem requires a business fix. A letter of apology or regret published in a newspaper solves nothing. And the fact that such a tactic is now seen as “required” in the PR tool kit diminishes its value even more, precisely because it is seen as required and thus not genuine.

Don’t get me wrong. I am not suggesting that such communications are unnecessary. I simply believe they have very limited value, and alone they won’t lift any burden off a company in crisis.

In my view, the entire discussion of apologies is overblown. If people fixate too much with the tactic of apology (or expression of regret), then they are ignoring the far more important issue of root cause of the problem, and its solution.

# # #

Code Blue! We Need An Answer Stat! Do Shareholders and Media Have a right to know about a CEO's Health?

Chris Gidez — Fri, 01 Aug 2008 15:58:00 GMT

The recent hubbub about Steve Jobs and rumors of his health exposes a considerable chasm between what companies feel obliged to reveal, and what some investors and media believe is their right to know.

And given that the media have nothing better to do than to chatter about how Steve Jobs looks (never mind the growing recession, the crisis in the banking sector, collapsing financial markets, skyrocketing energy prices, collapsing housing prices and a war or two), there has been no shortage of chatter in the press and the blogosphere on the topic. The following are just some of the chatterboxes on the topic.

http://blogs.wsj.com/health/2008/07/28/do-apple-investors-have-right-to-steve-jobss-health-info/

http://news.cnet.com/8301-13579_3-9996676-37.html

http://www.alleyinsider.com/2008/7/sorry-apple-steve-jobs-health-is-not-just-a-private-matter

Given the average age of Fortune 500 CEOs, and knowing the stresses a CEO faces, I will venture a guess that there are any number of companies, and boards of directors, that are facing the question of how to address the health of the CEO.

So for communications managers, this is a fair issue to ponder, as all of us may have to deal with it at some point.

So here's my POV.

If we assert - as we do - that a CEO represents an important element of an organization's reputation (and, hence, perceived value in the marketplace), then it only follows that the condition and performance of that CEO will weigh heavily on the company's reputation. This would suggest that the condition of a CEO's health is fair game and companies should anticipate that investors and media will expect a degree of openness and substance from a company in this regard.

Does this mean that companies must feel obliged to include the results of the CEO's annual check-up in their SEC filings, just as Presidential candidates are expected to disclose their medical records? Of course not.

However, it is a matter of political reality that we live in an age where transparency is seen as an obligation, not just something to be rewarded. That expectation of transparency extends to the public face of the company -- the CEO.

This expectation is even greater when the CEO assumes a high public profile, such as Steve Jobs, Warren Buffett, Michael Dell, etc. And when the CEO chooses to become a blogger, he/she is further inviting the investing public, customers and the media to view him/her as an open book.

Claiming "it's a private matter" may be seen as antiquated and unsatisfactory as "we don't comment on litigation," and as self-incriminating as pleading the 5th Amendment.

As we are seeing with Apple, uncertainty about the CEO creates anxiety among investors, and the chatter simply compounds the anxiety.

So the situation presents some difficult questions for the company (or any company in a similar situation), and it suggests the need to address the ambiguity that exists as to a company's obligations to disclose.

When is a CEO's health the business of the investor?

Certainly, if any health issues impede the CEO's ability to do his/her job, that would seem to be a matter warranting a company comment or announcement.

But what if the CEO is doing fine, but had prior problems with cancer, heart trouble or other such maladies. Should the company feel obliged to keep the public alerted every time the CEO sneezes, or has an MRI?

Both Joe Nocera of the New York Times and John Boudreau of the San Jose Mercury News have written thoughtful pieces on this issue, and they are worth a read.

There are two angles to the Steve Jobs/Apple story that make this issue more complicated for the company. First, Jobs has spoken in the past about his bout with cancer. And it’s a truism that once a company or an executive starts to speak on a topic, they are expected to continue to speak. Second, the company made differing and ambiguous statements in response to questions about Jobs' health. Perhaps the most troublesome is the separate statements from the company that Jobs' health "is a private matter" and that he is simply suffering from "a common bug."

Understanding that it is our inalienable right to read tea leaves, the former may be interpreted as an acknowledgement that Jobs does have a health issue, but it is no one's business but his own. The second statement seems to imply that whatever Jobs is suffering from is no different than what all of us suffer from over time.

But is the "common bug" response potentially misleading?

Joe Nocera, in his column in Saturday's Times, reports that Jobs called him and shared with him -- on an off-the-record basis -- information on his health. All Nocera reported was, "While his health problems amounted to a good deal more than 'a common bug,' they weren’t life-threatening and he doesn’t have a recurrence of cancer."

Frankly, this is no less ambiguous than "a common bug." But what I take away from this is that Jobs has some serious health issues, but nothing that will kill him. However, it doesn't answer the question, "Does his health situation impede his ability to carry out his job?"

At the end of the day, perhaps that is the test that companies should apply.

(If, down the line, Jobs' health takes a turn for the worse, and it is determined that it is somehow related to his existing condition, get ready for those shareholder lawsuits claiming the company mislead investors.)

In short, companies need to understand the landscape of the "CEO Health" question. Right now, Apple and Steve Jobs are garnering the attention. But the first company that chooses to be fully transparent on such an issue will set the benchmark for all other companies to emulate. And once a company chooses to be fully transparent, every other company that chooses to be less so ought to be prepared for the question, "Why aren't you as forthcoming as the other company?

Does the FDA Need an "Instant Replay" Rule?

Chris Gidez — Mon, 07 Jul 2008 19:00:00 GMT

According to the rules of the National Football League, if a coach believes that a referee has erred in making a ruling on a play, the coach may throw a red handkerchief on the ground, signaling his desire to exercise his right for an instant replay.

Perhaps the U.S. Food and Drug Administration should consider handing out red handkerchiefs.

The recent media frenzy over the salmonella scare (allegedly) associated with tomatoes got me to start thinking about a conversation I had with a senior executive of a major consumer products company. Some of the points we discussed then -- the growing power of the internet, consumer uncertainty about the concepts of safety and risk, the hyper-sensitive nature of regulators, the uncertainty of science, the hovering presence of trial lawyers, etc. -- all seem to be at play here.

And even for communications managers whose companies are not in the business of selling fruits and vegetables, this is a cautionary tale for anybody involved in the messy business of managing communication and reputation.

As everyone in the Western Hemisphere surely knows by now, an outbreak of salmonella in the U.S. prompted food safety experts (including the FDA and the Centers for Disease Control) to issue a warning in June to consumers about eating certain types of tomatoes. The issue quickly became a national news story.

Saturday's (July 5) Wall Street Journal caught my attention. "Jalapenos Probed in Outbreak --- Tomatoes No Longer Seen as Prime Suspect for Salmonella," said the headline of the top story, above the fold, on page 1.

After reading this report, I went back to the transcript of the joint FDA/CDC conference call with media on July 1, when the agencies conceded that the source may not be tomatoes at all. Specifically the comments of Dr. Robert Tauxe, CDC's Deputy Director, Division of Foodborne, Bacterial and Mycotic Diseases:

I'd like to say that the process of investigation is complex and often difficult and when CDC and the states conduct a foodborne outbreak investigation, it's like a - a detective trying to solve a case. We often have to rely on peoples' memory about things that are not very memorable such as what they ate last week or the week before or the week before that. People may remember many things but they may not remember everything they ate and they may not realize or remember that many of the things that they ate have many different ingredients. So our information is gathered through interviews with people who got sick as well as other people who did not get sick. It might be family members or neighbors or other people that are in the area. And then we compare that information....

Hardly what one would consider a sound scientific investigation. Now contrast that to what the FDA said in its June 7 news release (emphasis added):

The Food and Drug Administration (FDA) is expanding its warning to consumers nationwide that a salmonellosis outbreak has been linked to consumption of certain raw red plum, raw red Roma, raw red round tomatoes, and products containing these tomatoes.

Certainly no sense of uncertainty in this declaration.

If there is one thing crystal clear as I write this blog entry, is that there is absolutely no clarity as to the source of the salmonella outbreak. Yet almost a month ago the FDA and CDC were speaking as if they had every confidence that the source of the salmonella was tomatoes. The response provided by Dr. David Acheson, the FDA's Associate Commissioner for Foods to a question from CNN's Amy Burkholder during the June 16 FDA/CDC media conference call is telling, particularly in light of the new revelations about a possible alternative source of the outbreak:

Amy Burkholder: We had one other quick question. We are getting a lot of questions about salsa. Can you help us give the proper message regarding fresh salsa or even jarred salsa?

David Acheson: I think with regarding the question to ask is what kind of tomatoes was the salsa made from and where did they come from? And if the place that's selling the salsa can - has information to say that they come from one of the areas where we don't have concern, then fine. If they - if they're from an area where we still have concern, then that's not fine and it shouldn't be consumed. The salsa shouldn't be consumed. If the salsa obviously made with grape, cherry, or tomatoes that are still on the vine, which is probably unlikely, then that's okay too. But it's the usual message that if a consumer is in doubt, it's better to play on the side of safety and not eat the salsa. I - but that's one of the reasons why we're emphasizing to retailers and restaurateurs -- know where your tomatoes are coming from and tell your consumers. Tell your customers, because you're' right -- it's about an information flow and how's a customer going to know.

Dr. Acheson's response focused solely on the tomatoes in the salsa. Never once was there discussion about the potential that other ingredients may be the culprit.

In fact, in a review of the FDA's special website (which includes the title, "Salmonella Saintpaul Outbreak" over a photo of tomatoes) I was hard pressed to find any discussion of alternatives to tomatoes as a possible or likely source of the contamination. Bottom line: If one were to solely rely on the FDA website, one would draw the conclusion that tomatoes were the definitive culprit.

So, in light of the growing uncertainty and confusion, one has to wonder...

Were the regulators acting solely based on scientific evidence and investigation, or did the politics of fear (including the fear of Congressional and media criticism) creep into their decision process?
Did the FDA move too fast without solid conclusions because it feared criticism that it was moving too slow?
Did the media know enough to ask the right questions, or were they willing (if not enthusiastic) participants in the hype?
Was the speed and breadth of the internet a force for good or not?
How does industry expect to keep the conversation focused around reason and facts in the face of this strong headwind?

I excerpt two passages from a NY Times article from April 25 that tell us a lot about the mood of the consumer and the dogma of NGOs and consumer activists. While these individuals were speaking specifically on the bisphenol-A controversy, these comments have equal relevance to the tomato commotion, or any similar episodes of market reaction (or overreaction):

"...There is a an extraordinary fear level right now, whether or not it is justified on the scientific side," said Carol Schreitmueller, director of research and development for Pacific Market International, the maker of Aladdin food containers and water bottles, based in Seattle. "It is going to change what happens to materials. We have to decide if people will trust this material anymore."

"...This may be a completely safe product, but we don't have the information we need to make that assessment," said Aaron Freeman, the policy director at Environmental Defense..."

In short, fear trumps reason, and industry is guilty until proven innocent.

A July 6 column from the Tulsa World points to a Deloitte study which captures the potential consequence of such fear:

"After more than 300 food recalls last year is it any wonder that a recent survey by the consultancy arm of Deloitte showed that three-quarters of those polled were more concerned about the food they eat than five years ago, and 57 percent said they had stopped eating certain foods following a food scare. Fear creates harm in the marketplace. Consumers avoiding certain foods can put producers out of business and that can affect state economies."

Perhaps when all is said and done, scientists and regulators will conclude that tomatoes were the source of the salmonella outbreak. But for the time being, confusion reigns supreme, and the reputation of both industry and regulators suffers.

Where are those red handkerchiefs?

# # #

When Faced with a Political Crisis, Stick it to Big Oil

Chris Gidez — Mon, 05 May 2008 20:42:00 GMT

(OK, so maybe you think it is a stretch for me to write about the presidential campaign in a blog focused on corporate crisis management. But since the prolonged reputation crisis facing the oil and gas industry is addressed here, that's my rationale for the following.)

Hillary Clinton has been in a prolonged crisis. Try as she might, she simply cannot knock Barack Obama off his pedestal of delegates.

So what does she do?

She carries on in the long tradition of politicians. When the going gets rough, blame the oil companies.

This time Sen. Clinton has called for a "holiday" for the federal gasoline tax, ostensibly to give drivers (particularly those in Indiana) some relief from skyrocketing prices at the pump. To offset the tax revenue losses she would hit the oil companies with a windfall profits tax.

There are so many problems with this idea, I wouldn't know where to begin.

To start, a not-so-minor problem with the idea is that there really wouldn't be much relief for drivers. I read one economist's estimate that the savings per vehicle might be a couple of bucks per week. But even that might not last, as economists and energy experts predict the scheme would simply encourage drivers to drive - thus increasing demand and driving prices back up.

Then there's the issue of the lost tax revenues, which would otherwise be spent on improving our transportation infrastructure.

Well, Senator Santa Claus suggests that a windfall profits tax be imposed on "big oil." She says the revenues from the windfall profits tax would be directed toward encouraging investment in green energy technologies. So here we have a blue state liberal on the one hand challenging oil companies to invest more in cleaner and renewable energy technologies, and at the same time wanting to take away their means to do it. (And, by the way, I defy anyone to show me one of the "big oil" companies that ISN'T investment in renewable and other green energy technologies.) In short, Hillary will take money from the energy companies (who are already investment in green technology) and give it to someone else (Al Gore?) to do the same. As Maxwell Smart would say, "Very Interesting."

And on the back end of this "holiday," with Congress being what it is, there would be significant political pressure to extend the holiday indefinitely, which would in turn lead to a significant crisis for many urban areas which rely on the gasoline tax revenues to support mass transit and other transportation infrastructure projects.

Sen. Clinton dismisses criticism of her idea, labeling as "elites" those economists who have voiced disapproval. I guess being an "elite" in this land is no longer admirable. Well, I don't know if these economists are elite, but it would be foolish to dismiss their point of view. (By the way, with degrees from Wellesley College and Yale Law School, Hillary would qualify as an "elite" where I come from.)

Of course there is also the practical side of this.

If Sen. Clinton believes her plan is actually achievable, then she's either A) totally out of touch, or B) sniffing too many gasoline vapors.

There's not a snowball's chance in the Saudi desert of this plan becoming reality.

She and Sen. McCain seem to be the only supporters of it in the Senate (and thus are 49 votes short), and not a single member of the House leadership has stepped forward with an endorsement.

I suspect that Sen. Clinton actually knows this idea will never see the light of day, but also believes it can win her votes. (Which tells you something about the state of Big Oil's reputation.)

So she's not stupid or delusional, she's just shameless.

That's not leadership. It's cynical pandering.

With Candidate Clinton, it's not the 3am calls we need to worry about. Rather, it's the lack of midday wisdom that frightens me.

Journalism Needs to "Smart It Up"

Chris Gidez — Tue, 22 Apr 2008 16:55:00 GMT

I took a call last week from a Newsweek reporter who was doing a piece on the opening of the "Newseum," the new Washington, D.C.-based museum dedicated to promoting the high points of journalism, of which there are many.

His question to me was essentially, “Do you think this will help rehabilitate the reputation of journalism, which has taken a severe beating over the past decade?"

I guess I wasn't clever enough in my response, since my comments never made it into the article which was published in this week's issue.

But here's what I said:

Not a chance.

To think a museum will turn around the reputation of journalism is as likely as the idea that a museum on the history of oil will improve the reputation of that tortured industry.

First of all, very few Americans will actually visit the museum (particularly at the ridiculous admission fees being charged).

But more important, this museum is but a drop in the ocean compared to the current of negative attitudes about journalism caused, for the most part, by the journalism industry itself.

Who can blame Americans' diminished view of the news media when everyday we are bombarded with journalists' obsession with the trivial (as we saw in last week's Democratic candidates debate hosted by ABC News), the inane (as evidenced by the 24/7 coverage of Britney, Paris and Lindsay), and the downright mean (as we hear and see every day and night on Air America, Fox News and countless syndicated talk radio programs).

And the cherry on top is the very real bias exhibited by too many media organizations.

Journalism used to be a noble profession. No more. Why should it be, when journalists themselves diminish its credibility by promoting "citizen journalism" where anyone with a cell phone camera or e-mail address can get equal billing alongside seasoned journalists who have honed their craft through years of experience and gobs of education and intellect?

Just as I say to any other corporate client who asks for help in turning around a bad reputation, I would tell the titans of journalism, if you want to improve your reputation, then you need to first address the performance issues that precipitated that reputation.

That means, stop dumbing it down, and start to "smart it up."

I probably will take my children to the Newseum at some point. But not to encourage them to pursue journalism careers. No, I will take them to the Newseum for the same reason I will take them to the. Museum of American History... So they can learn "how it used to be."

Bill Keller vs. John McCain. And the Winner Is????

Chris Gidez — Mon, 25 Feb 2008 21:17:00 GMT

So what lessons does the New York Times vs. John McCain battle have for us corporate crisis folks?

Lesson #1 -- Preparation. Obviously the McCain camp knew this was coming, and they made use of that time to prepare -- creating key messages, developing proof points, lining up third party advocates, etc. Companies facing a crisis typically have some advance warning -- sometimes just a few days, but often weeks if not months. The McCain camp couldn't control when -- or even if -- the story would break, but they were prepared to move on a moment's notice, and they did.

Lesson #2 -- Regain Control of the Agenda. The McCain camp was brilliant in its execution of a strategy to reframe this story and thus capture the high ground and controlling the agenda around it. The story rapidly moved from one about questions over the Senator's judgement to questions about the newspaper's judgement. When media are more interested in what Bill Keller has to say in defense of the story than in what John McCain has to say in defense of his character and his actions, that says something about who is the winner in this battle.

Lesson #3 -- The Goodwill game. Senator McCain had built a reserve of goodwill amonst key audiences that could make or break him. So when he had to call on that reserve, it was there for him. By and large, he enjoyed the benefit of the doubt.

Lesson #4 -- The Trust Factor. Perhaps the public don't hold politicians (or corporate America) in very high regard. But what this exercise taught us is that they have even less regard for the media. People were generally disinclined to trust the New York Times, and thus were prepared to discount the story, regardless of the merit of the assertions the story made.

Lesson #5 -- The Impact of Unrelated Events. Often, unrelated events can either worsen a crisis situation or at least affect the manner which that crisis is viewed. In this case, in the weeks prior to the McCain story being published, there were a number of instances where the media's conduct relative to the Presidential campaign was called into question. That recent criticism of the media gave greater legitimacy to the "The Times stepped over the line" theme.

Lesson #6 -- The Blogosphere makes noise. And lots of it. This story immediately became the beauty queen of blog topics; everyone's favorite. And today's blog noise can become tomorrow's main headlines in the traditional press. Again, the McCain camp was ready to exploit this.

All of these lessons have practical application for corporate crisis planning.

So who's the winner? No brainer. McCain on a TKO. But he better watch out, the media need to publish something new every day, and this story line is sure to return.

"The Only Thing We Have to Fear Is..... The Unknown"

Chris Gidez — Thu, 21 Feb 2008 22:22:00 GMT

There was a piece in today's Wall Street Journal about an opinion survey sponsored by Public Strategies on Americans' attitudes toward sovereign wealth funds.

To no surprise, Americans are generally wary of them. But what was interesting about the suvey was the finding that most Americans don't know much at all about SWFs. In short, the less they know, the more fearful they are of it.

Americans have a long history of fearing the unknown, and politicians love to exploit this.

Take, for instance, the concept of genetically altered crops -- the use of science to make crop yields greater, and to make crops more resistant to bugs or disease. In short, more food for an ever-expanding population. Who could possibly be against this? But even in the absence of any credible evidence to suggest a public health risk, politicians and activists exploit consumer ignorance and dub this "frankenfood," and throw up all sorts of obstacles to prevent the commercialization of such biotechnology.

A more recent example is the subprime debacle and the rapidly decelerating economy.

Heck -- most reporters don't understand the complexities of the financial markets, so why should we expect anything different from politicians and Joe Six-Pack? But into this vacuum of understanding politicians have jumped in, suggesting some really hair-brained fixes that may attract votes and headlines, but won't necessarily solve any of the underlying problems.

There are any number of similar examples of politicians exploiting the public's ignorance to advance an agenda that is not necessarily in the public's interest. But back to the issue of SWFs.

What I find both amusing and troubling is that some politicians have been quick to seize on SWFs as the latest threat to our economy, our national interest and, if you believe the rhetoric, the very foundation of the Republic. But at the same time, no one can point to a single instance where a SWF has been used as a political tool or has otherwise been a threat to our economy or our nation. Ironically, there was a recent issue of the Financial Times where on one page there was an article about U.S. politicians' concern over the political threat posed by SWFs, while another article in the same issue included views of some financial analysts that SWFs were too passive as investors.

Which is it?

This hullabaloo reminds me of the hand-wringing of politicians and pundits during the late 1980s when Japanese investors were snapping up real estate in the U.S., including Rockefeller Center. You would have thought at the time that the enemy was on our shores and it was only a matter of time before the White House was again burned to the ground.

I would posit that most politicians are as ignorant as their constituents on many issues, but that doesn't prevent them from betraying their ignorance through silly statements and senseless legislation, or by fanning the flames of fear and ignorance amongst the voting public.

So what does this have to do with the practice of crisis communications?

SWFs need to recognize the lessons learned by the agriculture sector, by the energy sector and by other sectors where fear of the unknown has been exploited by politicians to advance bad policy. Educating the masses is critical to neutralizing this fear-factor.

Not only is education necessary, though, but so is trust-building. Not only do Americans not know what a SWF is, but equally important, they don't know -- and therefore cannot trust -- who is behind the SWF.

Addressing the trust factor, and building goodwill, is necessary as well.

I'm Sorry I am Writing About Apologies....

Chris Gidez — Tue, 19 Feb 2008 16:17:00 GMT

What is it with CEO apologies? The media are fixated on them.

Last week I took a call from a reporter who wanted my opinion as to whether Bob Eckert, Mattel's CEO, did a good job apologizing following his company's troubles with toys and lead.

And I open this morning's Financial Times and read a column entitled, "Say Sorry and Mean It -- Or Don't Say Anything At All." Again, Eckert is rolled out as the poster child of CEO apologizers.

Hanging on one wall in my office are examples -- literally ripped from newspapers -- of various ads from companies apologizing or otherwise expressing regret over assorted crises and controversies in which they were involved. I collect these published ads (and I am running out of wall space) so that I have a handy reference point of effective and not-so-effective communications. To be sure, some appear to have been written by lawyers more interested in avoiding liability, rather than by CEO's wishing to rebuild trust with their customers or shareholders.

But while it is almost de rigueur that companies in crisis must publish an apology ad, way too much is made of the tactic and the sentiment.

Media tend to dissect and over-analyze the words and intent of a corporate apology. Are they accepting blame for the problem or simply expressing regret that the situation occurred?

I am reminded of something my mother used to say to me and my brothers when we were caught (or confessed to) doing something wrong. We naturally apologized. And my mother's response to every apology was the same -- "I'm glad you apologized, but don't let it happen again!"

And that's really the lesson for companies who somehow failed their customers, their shareholders, their employees or other constituents... "Don't let it happen again."

Don't get me wrong. A key step for any company in crisis is for it to recognize the problem that has been created for assorted stakeholder groups, and to make an expression of concern, empathy, regret or -- yes -- apology. Whatever is appropriate and honest. Such expressions are important because they are attempts to establish an emotional connection between the company and the respective audiences. That emotional connection is critical if a company hopes to regain the bond of trust.

But at the end of the day, such an expression is nothing more than a Band-Aid. It doesn't cure the ill.

What I told that reporter is that companies ultimately will be judged more by their post-crisis performance, not by their apologies other crisis communications. JetBlue needs to avoid operational meltdowns during storms. Mattel needs better quality control. No matter how eloquent the apology, the response from media, investors and the public will be brutal if a company suffers a repeat of the problem that put it in "time out" in the first place.

crg

Fell the Giants

Chris Gidez — Tue, 08 Jan 2008 16:50:00 GMT

The late British politician Alan Clark once said, "There's nothing so improves the mood of the Party as the imminent execution of a senior colleague."

Alan Clark would certainly get a kick out of 2008.

We're barely a week into the new year, and if this first week is any indication, the theme for the news media for the year will be "fell the giants, and rejoice in their fall."

Already we have seen the execution (or at least the media's verdict of execution) of numerous high-profile names in business, politics, the arts (if we can call it that) and sports.

On the business front, In just one day we saw the demise of Bear-Stearns CEO James Cayne, Starbucks CEO Jim Donald and Krispy Kreme CEO Daryl G. Brewster. And of course the media have all but buried Hillary Clinton, Mitt Romney and Rudy Giuliani on the campaign trail. In Hollywood, the media can't get enough of the slow death spiral of Britney Spears. And just in time to fill the gap between the end of football and Opening Day of baseball, the media are rushing to judgment on Roger Clemens and the steroid saga.

"So what?" you ask.

The lesson for those of us in the crisis management business is that it is an unavoidable truth that the media will not declare the end to a story until they have their sacrificial lamb, their pound of flesh, their scapegoat.

And its not sufficient for the media to have the head delivered on the platter. Rather, they want to prolong the execution itself, because it sells papers, and boosts ratings.

More important, it's easier to report on death spirals than to do a deeper intellectual dive into the underlying causes of the collapse of the subprime and real estate markets; into the pressures that compel athletes to push the legal and medical envelopes; into the policy differences between political candidates.

So we're more interested in a CEO's golf habits, a celebrity's personal demons, an athlete's body language at a news conference, and whether Hillary Clinton actually shed a tear, or just got watery eyes.

Is it any surprise that the two newest entries into the business reporting side of the media are from Fox and Conde Nast?

To be sure, there is a great deal of good business reporting out there. But there's also way too much focus on "whose head will roll?" vs. "what is the problem and how should it be fixed?"

In his "Global View" column in today's Wall Street Journal, Bret Stephens writes,

There is great virtue in the American way, which expects CEOs to perform on a quarterly basis, presidents and Congresses to reinvent politics in 100 days, generals to wipe out opponents in 100 hours without taking significant casualties, doctors to save life and limb every time, search engines to yield a million results in less than a second, and so on. There is also great virtue in the belief that what is bad can be made good, and that what is good can be made great, and that what is fractionally less than great is downright awful.

But these virtues can spawn vices. One is impatience. Another is a culture of chronic complaint. A third is the belief that every problem has a solution, that trial is possible without error, that risks must always be zero, that every inconvenience is an outrage, every setback a disaster and every mishap a plausible basis for a lawsuit.

If only I were so eloquent. Our media is simply a manifestation of our society, and our society sometimes seems capable of passing judgment only in absolutes: Success or failure, right or wrong, winner or loser. And for some reason we seem to rejoice the failure of others than their success. So is it any wonder that we love nothing more than when the media play the role of executioner?

Is It Any Wonder that FEMA Was Confused Over Who Gets to Play the Part of the Reporter??

Chris Gidez — Mon, 29 Oct 2007 21:02:00 GMT

OK, so has anyone by now NOT read of the news conference held last week by FEMA featuring FEMA employees pretending to be journalists?

The Bush Administration has certainly had its share of questionable judgements when it comes to news management. Until now, the benchmark for "on second thought, perhaps we shouldn't have done that" moments was the now infamous "Mission Accomplished" speech/photo op by President Bush aboard the U.S.S. Abraham Lincoln in May, 2003 (Try googling those two words and see what you get).

In defense of the poor PR-eaucrats @ FEMA, an argument could be made that the rules are not quite as clear as they may have been in the past.

Before addressing that, however, I need to make a confession, in the interest of full disclosure.

Back in the early 1980s, during my first tour of duty in PR consulting (and when I was quite low on the food chain), my firm was organizing a news conference on behalf of a client. Who that client was, and what the issue was, I have no recollection. But because the news conference was scheduled for the morning, and because there was lots of competition on the AP Daybook that day, we were quite concerned about media attendance. So I called a friend of my who happened to be both a freelance photographer and an AP stringer, and "hired" him to attend the news conference as a photojournalist. He took some pictures, and actually got one of the photos of the AP wire. He did not ask any questions. So I don't want anyone accusing me of throwing stones in a glass house.

Now, back to the topic at hand.

I think we all agree that FEMA crossed the line here. Did they NOT think that someone was going to call them on this ruse?

While I do not for a moment condone the tactic (A friend of mine has a saying for such boneheaded behavior -- "it's like waking up in the morning and having a big bowl of stupid for breakfast."), and it is hard to imagine how anyone could have thought it was acceptable, nevertheless the episode does serve as a warning that we need be a bit more alert to the growing confusion over the definition of legitimate journalism.

With the number of blogs growing faster than bacteria in a petri dish under a warm light, everyone gets to play the role of "journalist" these days. This burgeoning legion of citizen-journalists is causing a rapid erosion of the previously understood rules for what constitutes "legitimate" or professional journalism. And while accountability has always been fuzzy in the fourth estate, it is becoming fuzzier still.

Even the mainstream media -- who we would expect to be the most stalwart of defenders of the institution and all its rules and traditions -- are compounding the problem. Today there is a myriad of newspapers, radio and television outlets that invite readers/listeners/viewers to play the role of journalist.

So much for professionals standards.

I know an argument could be made that this growing citizen-journalist trend is simply a response to a growing dissatisfaction with the mainstream media.

I'm not convinced, though, that the "cure" is any better than the symptom.

To steal from my prior blog entry, does this serve the public interest?

What's next? Citizen-lawyers? Citizen-accountants? Citizen-doctors?