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The Power of Apologies

posted by Boyd Neil
Anyone who has followed my posts on apologies will know how important I feel they are as a way to manage reputation in a crisis. (Forgive the self-reference, but two of the most recent posts can be found here and here.) A colleague in my firm's Seattle office, Drew Arnold, sent me an article from the Oregon Business Journal referencing a June 2009 discussion paper called 'The Power of Apology' from the University of Nottingham's Centre for Decision Research and Experimental Economics. Here is the paper's abstract:

After an unsatisfactory purchase, many firms are quick to apologize to customers. It is, however, not clear why they should do that. As the apology is costless, it should be regarded as cheap talk and thus ignored by the customer. In this paper, we test in a controlled field experiment whether apologizing influences customers' subsequent behaviour. We find that apologizing yields much better outcomes for the firm than offering monetary compensation."

Based on a study of customers using eBay in Germany, the study found among other results:
  1. "Customers who receive an apology instead of a monetary compensation are more than twice as likely to withdraw a (negative) evaluation."
  2. "When money is offered, a higher purchase price makes it less likely that a customer withdraws his (negative) evaluation. An apology works independent of the level of the purchase price."
Why then can't we assume that the propensity to consider legal action when harm has been caused by an accidental event, even if negligence is involved, just might be mitigated by a genuine (and the key here is the word 'genuine') apology?
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Why ‘Media’ with ‘Social’

posted by Boyd Neil

A post by a colleague got me thinking about the phrase 'social media' as the lexeme to describe the technologies of web-based self-publishing that have led to unprecedented connection, conversation, engagement and community.

The provenance of the phrase is evidently to contrast user-generated news and comment with mainstream or industrial media in which the 'means of production' to use the Marxist description (also favoured by cultural commentator Andrew Keen) are owned by corporations not the individuals who create the content. The debate about whether 'social media' is the right term has been going on for at least two years.

The problem I have is less with the 'social' element of the lexeme than with 'media' to describe the interface, although a colleague did comment the other day that it would make it easier to sell social media as a communications strategy to companies if it didn't contain the word 'social' which smacks of people-driven rather than business-driven decision making . . . which is the point of course.

Let's do a little academic geekery here. Dictionary.com defines media as "the means of communication, as radio and television, newspapers, and magazines, that reach or influence people widely." (The 'reach' is becoming questionable and the 'influence' declining. But that's the subject of a future post.) The Online Etymology Dictionary suggest a derivation from the "notion of 'intermediate agency,' a sense first found around 1605." According to Spiritus Temporis, media refers to "those organized means of dissemination of fact, opinion, entertainment, and other information."

You see the trend: The word 'media' has about it the notion of a channel by which you deliver something to people, not interconnect with them. Some, well many, communications and marketing people have a hard time switching mental models when it comes to assessing social tools for online interaction. They fixate on the term 'media' and apply old public relations patterns and benchmarks to social media strategies.

Doc Searls (co-author of the groundbreaking book The Cluetrain Manifesto), for one, objects strenuously to the limitations and misdirection prompted by the 'media' terminology. I do to . . . but the battle for a new conceptual model may already be lost as usage soon drives definition. Even though the conceits of social computing tools, social interaction software or social engagement strategies seem to collocate better the important elements of the digitally-driven cultural revolution, they still aren't really there yet.

So, can we revive the two-year-old or longer debate? Or has it been resolved and I am just out of the loop?

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Twitter . . . One More Entry

posted by Boyd Neil

Okay, just one more post on Twitter. Hat tip to Meghan Warby for directing me to this:

Dilbert.com

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Twitter . . . Why Bother?

posted by Boyd Neil

Maybe it isn't enough to denounce silly sniping at Twitter - as I did in the previous post - without making a case for why bother exchanging 140 characters with some friends and many more people I've never met.

How about because:

  1. You can use Twitter to reinforce the legitimate personal need to provide value through your comments, links, humor and polemic . . . I do.
  2. Twitter, as Andrew Keen said last Friday at a panel discussion with Clay Shirky, is pure, by which I think he means it is direct and surprisingly transparent.
  3. Twitter posts expose personality, your own and that of others, better than dinner party conversation. You learn a lot about people by what they contribute and how they participate.
  4. Twitter has some many political and social uses as evidenced by last June's elections in Iran. Jim Gilliam, creator of the Twitter petition tool called act.ly says his 'tweet change' tool makes it possible 'for anyone to pounce on an opportunity, no matter how small, without the run-up and vetting and committee meetings that traditional advocacy groups might have to churn through before they act.'
  5. It can be, says web strategist Jermiah Oywang, a shared feed reader, chat room, listening tool, traffic driving tool, and note space.
  6. People direct me to great stories, edgy ideas and very occasionally products (usually wine) that I would not find otherwise.

In other words, assuming you choose the right people to follow (and by "right" I mean those who you want as part of a community of interest) Twitter helps build fruitful, lively, and perspicacious reciprocal relationships.

If you have an extra six minutes, watch this video about why others like Twitter.

 

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Twitter . . . Seriously

posted by Boyd Neil

If I were to make a list of the number of snarky articles in the mainstream press about Twitter (or social media in general) it would stretch the bandwidth available on this website. Journalists have the hardest time examining cultural phenomena without trying too hard to be 'smart'. Their preferred tone is cynical; the effect, however, canting and fallacious.

The latest foolishness is in a piece by Lisan Jutra about Twitter published yesterday in Canada's The Globe and Mail, the first in planned bi-weekly series on social media. The first column, announced above the masthead, is so silly as to be inconsequential except that it may augur how this column goes. And that presages a real waste of time (unlike Twitter).

A few 'mastersrtokes':

  1. "Instead, every other tweet (the cringe-inducing name for Twitter posts) turns out to include a link to some honking online tome." Mmmmh . . . does the journalist have a problem with reading?
  2. "At the time, I was following 50 people (the vast majority of Twitter users follow fewer than 50 people)." Mmmmh . . . where does that number come from? And I am at about 670 and have no problem with the flow of information, selecting what I need, parking the rest - if of interest - in my delicious account.
  3. "In the end, I followed up on 44 links between 9 a.m. and 11 p.m. In total, this equalled three hours of power reading." Mmmmh . . . couldn't she tell within the first sentence whether the link was something worth reading?

I guess the answers to my questions are self-evident. The column is meant to entertain not take its subject seriously.

The next question, then, is Why bother? To whom are these scornful writers speaking when they belittle a means of connection, exchange, engagement, community creation?

They have nothing to say to me and the thousands of others interested in cultural memes and their impact on communications, messaging, reputation and issues. They have nothing to say to the millions of Twitter users who enjoy the quick news hit, the intimate although brief connection, the chance to offer an idea, service or product. They speak only to each other and the many hacks who have curled their lips at every social and business rupture that social media have occasioned  (perhaps at the expense of their own industry).

One more point. . . My tweet about the column yesterday led to this response on Facebook from someone who I have never met:

"I don't know if you noticed but in the Globe they announced that this column is the launch of a bi-weekly column on "social media", and the column was promo'd above the fold on page one. Shouldn't there be a test or something that would screen out this kind of nonsense from someone who is supposed to be writing about the subject? It is kind of like a reporter for the ROB (Report on Business . . . my note), in their first column, announcing that analysts who use charts and graphs are annoying and wasting our time, 'cause markets are so volatile you'd be silly to invest in them. Very strange and silly."

Amen.

 

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What Wall Street Can Learn From Distance Runners

posted by Boyd Neil

by Chad Tragakis, Senior Vice President, Hill & Knowlton, Washington

Anyone who has ever run a 10K or 10 mile race (or longer) knows that you can’t start by going all out.  You have to work up to cruising speed.  And you need to leave something in the tank for the last part of the run.  This is seemingly common sense, but for many “running” on Wall Street and within the business community generally, it is a lesson that bears repeating.  Long runs require a sustainable pace.  And if a business or an investment is to enjoy long-term success, it must create sustainable value.

This is the subject of a new report prepared by the Aspen Institute Business & Society Program   – Overcoming Short-termism: A Call for a More Responsible Approach to Investment and Business Management.

The CFA Institute defines short-termism as: the excessive focus of some corporate leaders, investors, and analysts on short-term earnings guidance, coupled with a lack of attention to the strategy, fundamentals, and conventional approaches to long-term value creation.

That pretty much nails it, but as the Aspen report states, short-termism is not limited to Wall Street.  It pervades the entire web of business – corporate leaders, company boards, investment advisers, providers of capital and even government.  Therefore, the report concludes, meaningful reform will only come from comprehensive, system-wide change.

Built to Last remains the business world’s classic tome on the strength, success and longevity of visionary companies.  In its wake, there have been a number of notable books on the value of taking a longer-term and more holistic approach to business – the works of Christine Arena, Stuart Hart, Marc Gunther and Jeffrey Hollender come to mind.  And plenty of CEOs can be found espousing the merits of “taking a long-term approach to the way we do business” in speeches at CSR forums and in the letters that introduce corporate responsibility reports.

But under the current system, the current pressures, I wonder how well a CEO can truly serve two masters?

Take, for instance, a genuinely well-meaning (and in this case, fictitious) CEO who gives a speech to his employees on the importance of creating sustainable value for all stakeholders.  But then two hours later, this same CEO tells his sales managers that they need to hit their quarterly numbers… or else.  And then later that day, he tells his plant managers that they need to increase productivity… or else.  When interests compete, which ones win?  His conflicting messages may well contribute to poor decisions by managers and cutting corners that can irreparably harm a company – workplace accidents, questionable deals, not following established procedures.

Is abandoning short-termism expecting too much for today’s companies?  Is capitalism, or at least capitalism in its current form, diametrically opposed to thinking and acting in the long term?

I hope not.  There are many examples of companies who are trying very hard to strike that delicate balance between competing and often conflicting short and long-term interests.  Logic would dictate that these firms, the ones who do it best anyway, will be rewarded in the marketplace.  I hope that bears out.  The suggested solutions outlined in the Aspen Institute report, namely market incentives that encourage patient capital, seem very reasonable. They would be a great start.

The best expression of sustainable value that I have ever heard comes from the ancient Greeks.  And although they were speaking about the importance of taking a generational view of society, it applies equally well to business.

“A society grows great when its people plant trees in whose shade they know they shall never sit.”

One could easily substitute the word “company” for “society.”  And if you look at the companies that have been around for 50, 60, 70 years or more, and others that are seemingly built to last, I suspect you would find this attitude to be prevalent… planning, thinking and decision-making with the next generation of employees, customers and stakeholders in mind.  It would be a fitting slogan to see posted in board rooms, in the C-suite and of course, all over Wall Street.

International Public Relations SUMMIT

posted by Boyd Neil

Unfortunately, it is unlikely that I will be able to attend the International Public Relations Association (IPRA) Summit in London this October. It takes place Friday, 30 October 2009 at Merchant Taylor's Hall, Threadneedle Street, London and the theme is PR in times of crisis – From austerity to opportunity. You can register here if you can spring for a thousand or so British pounds, plus travel.

This is one of the few international conferences I get to, having been to three IPRA Summits in London over the past 2 1/2 years. (Disclosure . . . I am a member of the IPRA's governing council.) Having not been offered a speaking platform (which I have in the past), and running up against the restrictions on business travel common to many agencies these days, the chances of getting to the U.K. for October 30th are slim.

I'll miss it.

The number of North American public relations and social media conferences is overwhelming. However, at them seldom do you hear the perspectives of French, British, Israeli, Norwegian, Russia, Irish, Indonesian, Indian, Nigerian, and Singaporean public relations professionals, for  example, as I have at the London meetings. Their experiences can be sharper than in North America; their stakeholders more aggressive; their governments over-intrusive; their cultures less - or more - flexible; their political sensibilities acute; and their use of mobile technologies extravagant.

The speakers at this year's conference include Nick Sharples, Sony Europe (who has tweeted all of once at @SharplesN); Fernando Rizo, Ketchum UK; Robin O’Kelly, T-Mobile; Rob Brown, author of Public Relations and the Social Web; Elizabeth Goenawan Ananto(Indonesia); Tim Weber - BBC Interactive (who tweets at @tim_weber); and Maria Gergova - IPRA.

Less cosmopolitan than usual, but still a strong cast.

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Tesco’s Brilliant Response

posted by Boyd Neil

Hat tip to my colleagues Dominic Pannell and Brendan Hodgson for highlighting this story from The Guardian about Tesco's response to a complaint from Daniel Jones founder of the Church of Jediism:

Tesco said: "He hasn't been banned. Jedis are very welcome to shop in our stores although we would ask them to remove their hoods.

"Obi-Wan Kenobi, Yoda and Luke Skywalker all appeared hoodless without ever going over to the Dark Side and we are only aware of the Emperor as one who never removed his hood.

"If Jedi walk around our stores with their hoods on, they'll miss lots of special offers."

Amazing what a little humour will do for corporate reputation.

 

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A Friend’s Take on Transparency

posted by Boyd Neil

I recently re-tweeted something from Todd Defren about a stark example of a lack of transparency in the use of Twitter by a public relations agency.

[RT @TDefren: Shouldn't "Seth the Blogger Guy" have *disclosed* that he worked at Fleishman? http://tinyurl.com/narrze http://myloc.me/DGYQ

A friend of mine who works in a senior corporate communications role for a large company felt the tweet deserved a reaction. He sent me an email I thought was worth sharing largely because it takes a contrarian view to received ideas about transparency. He said he was okay with me posting it here (unedited) anonymously. So here are the thoughts of one experienced corporate communications practitioner who, I must say, does delight in the role of iconoclast.

In my view, "transparency" in corporate communication, while a noble ideal, is just that, an ideal.  It's like democracy or green living, the reality is much thornier and more complex in practise (or is it practice?)  

Having kicked around the net for awhile now, personally and professionally, I have come to the conclusion that an unrealistic definition of transparency is placed on most companies.  In my view it is rooted in a stereotypical belief that corporate entities are essentially run by very bad people and a company is always guilty until proven innocent.   There is this odd double standard attached to companies participating in net-based communications, that somehow they are required to always declare the name behind the username, whereas virtually nobody else is. Who exactly is canuck1975 and who cares? -- unless he works for the man.  Activists and critics and trolls run about the internet with relative impunity, because the David and Goliath narrative always favours David, even if he's stretching the facts, ignoring those that don't suit him, and generally whooping it up with no constraints.  Sure it's exciting, but it doesn't make for valuable information.    

I was thinking about transparency in the context of your tweet and perhaps they did make a mistake, but then I got wondering:  did they choose to make it?  No one's that naive anymore... more than one corporate representative has been unmasked at this late date.  It's not like the risk was was unknown.  Although if an SVP at an agency didn't know about it, tough luck, Charlie, and enjoy the account review.

In this instance perhaps it was a phased approach, getting the message out in phase one trumping concerns about the means by which it was done and the revelation of that means, if it even ever was revealed.   If the information was factual, valuable and verifiable, I suggest the how and who are less important.  The net is a rough and tumble place, a reality often considered in passing, if at all.  Declaring "I am the company" or "I work for the company" runs the risk of shifting the focus from the message to the messenger.  Immediately teeth are gnashed and cries of "Spin!" et al displace reaction to the content and a big old flame war erupts where everybody can have some fun.   

Consider it this way.  You're in a meeting with your worst enemy, who is presenting an idea, that is, in fact, a damn good idea.  How many of us, in all honesty, aren't spending at least a little time looking to poke holes in that  and bring the worst enemy's house of cards tumbling down?  Now imagine the same idea is presented by a respected colleague and the consensus view is it's an excellent idea.   Then the respected colleague acknowledges your worst enemy as the brains behind the presentation.  Well, you might be a bit rueful, but there'll be no denying the quality of the thought, even if it surprisingly did come from that bloviating idiot. 

 Let the content be judged, I say.  So if that requires flying beneath the radar, that may be a choice that needs to be made in an environment where hyperbole and flame wars are often the best show in town.  There's no point executing a brilliant ground strategy if the battle's being fought on the bounding main.   Perhaps they actually made a wise decision to divide the process into two parts by getting the information they wanted out there and then, in the second part, dealing with the fall out from the revelation of who provided it. 

Which brings me to my second point:  web 'management', the new inside baseball.  Sure, as practitioners, we have an interest in the drama and the strategy, and certainly an activists or critics of the organization in question could feast on this revelation like it's steak.  But does the target audience for the information really care about the who and how of how it got there?  I suspect if you ranked the criteria for credibility, using the 80-10-10 rule to divide the audience, the factuality, verifiability and value of the information would trump who wrote it.  That's not to say strategies don't shape perceptions, they do.  But I don't believe it's a given that the outcome in this specific case means anybody's going to wear an indelible stain in the view of the audiences that count.   Then 10 and the 10 may remember, but the focus of the 80 is very likely elsewhere. 

I wouldn't recommend it in every instance, nor am I counselling the same recklessness and subterfuge that often accompanies the online antics of the loudest voices on the message board.  But on the other hand, lets get real:  the shock of finding a company or its consultant behind a web mask isn't what it used to be.    If the information is factual, valuable and verifiable, and the climate irrationally dismissive of certain sources, sometimes perhaps a case can be made for taking your lumps if you get caught doing what almost every other demographic on the web is doing from time to time as well.   If you've got the defence of substance, versus spin, it could be an imperfect strategy worth executing.  The dogs bark, but the caravan passes by.  The question that has to answered is whether anyone will remembering the barking or what caused it. 

I'd like to know your thoughts because it's a weird thing to take such a contrary view to the easy, perhaps reflexive, mantra of transparency and what that means.  If you ask me the web is translucent at best and that goes for the lot of us, spinmeister, client, activist, geek and basement dweller.

I'll discuss this over lunch with my friend . . . but I would love to bring him your comments through the comment thread below. (No Facebook wall posts please . . . aggregate comments here so others can see.)

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Integrity – Surviving a Crisis

posted by Boyd Neil

It is a commonplace of communications that for an organization and its senior management to survive a crisis, at least with its reputation relatively intact, it should act with integrity. But what does integrity mean in these circumstances?

There are a multitude of complex compliance models of integrity such as the one appended here and used by the pharmaceutical company Novartis at "Citizenship@Novartis" to guide its corporate responsiblity program.

Impressive, yes, but impractical as a guide to behaviour when an organization and a CEO's back are to the wall and decisions about what to say and when to say it have to be made in a moment.

Michael Jensen, founder and co-chairman of the Social Science Research Network and a professor emeritus at Harvard Business School, thinks of integrity ("what it takes for a person to be whole and complete") as honouring your word:

We can honour our word in one of two ways: first, by keeping our word, and on time as promised; or second, as soon as we know we can't keep our word, we inform all parties involved and clean up any mess that we've caused in their lives. When we do this, we are honouring our word despite having not kept it, and we have maintained our integrity.

(Note the reference is from an article in the Fall 2009 issue of the Rotman School of Management magazine which is not available online.)

Not bad advice for an organization or CEO troubled by a crisis of reputation: Inform everyone affected about what's going on: Recognize the mess you've caused; Clean it up.

 

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