Bottom Line? It’s Not Always About the Bottom Line

 Bottom Line? Its Not Always About the Bottom Line

THE PR VERDICT: “B” (Good Show) to Mozilla.

When Brendan Eich stepped down from his position as chief executive of software company Mozilla last week, the general assumption was that his personal stance against same-sex marriage was to blame. But was morality the reason for Eich’s resignation from Mozilla after being appointed a mere two weeks ago? No, opines Farhad Manjoo in the international edition of Sunday’s New York Times. Manjoo instead points out a key factor about Mozilla that companies need to heed. For Mozilla, the bottom line isn’t the only bottom line.

Mozilla is a company with a mission, to promote “the development of the Internet as a public resource.” In other words, it’s not all about the money for Mozilla. In a highly competitive industry, Manjoo writes, corporate culture becomes as important as salary. Apple and Microsoft may be able to offer buckets of money to talented coders and software designers, but those people might go for the company offering something they believe in.

Mozillians spoke online of how Eich divided their community. One said, “He is actively harming Mozilla by not making a proper statement on these issues and making things right.” Eich’s probable forced resignation is yet another example of the importance of keeping one’s personal opinions out of business.

THE PR VERDICT: “B” (Good Show) to Mozilla, for distancing themselves from a debate that causes damage to their corporate culture and their brand.

THE PR TAKEAWAY: Remember the refrain from The Godfather: It’s business, not personal. Whether you’re in business purely for profit or you have a mission, personal opinions can cost a company more than money. PR people exist for this purpose; had a few been consulted on this matter, Eich might not have a two-week position on his resume, and Mozilla wouldn’t have a new reputation of axing those it deems wrong.

PRV Report Card: This Week’s Winners & Losers

obamacare logo  PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to the Affordable Care Act, a.k.a. Obamacare, whose supporters, including its namesake, had reason to celebrate Monday when enrollments pushed slightly past the original sign-up target of 7 million. The nonpartisan Congressional Budget Office projected that target for initial sign-up period through March 31. Despite a horribly marred start and with withering opposition at every turn, the mandated healthcare program saw sign-ups somehow make their numbers. And while public opinion is still hardly enthusiastic, one poll did find for the first time that public support for the healthcare law surpassed opposition. Perhaps the rally will prompt lukewarm supporters to stop apologizing and start cheering.

  PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (FULL FIASCO) to General Motors’ chief executive Mary Barra, for a defense statement best summed up by “I don’t know.” As the head of GM faced a House subcommittee investigating what the car company knew and when regarding flaws that led to numerous deaths and injuries, Barra’s responses infuriated senators and the families of the deceased alike. PR is in freefall, and GM is still recalling millions of cars and facing possible criminal charges. In leaving Barra to claim ignorance or hang herself and her company, GM’s legal and PR teams register a complete fail.

  PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to Britain’s Daily Mail and Daily Telegraph, whose editorial boards told a parliamentary science committee they believe humans are negatively impacting global climate conditions. Really? That’s rather confusing considering, as the committee chairman put it, “some papers regularly give a platform to lobby groups or indeed conspiracy theorists – many not even qualified scientists – who pooh-pooh the evidence and attack UK climate scientists.” We are shocked, shocked, to find out that publications, looking to increase readership, might take one view in their papers while believing the exact opposite. Yawn.

Shadow Over GM Recall Grows Longer

 Shadow Over GM Recall Grows Longer

THE PR VERDICT: “D” (PR Problematic) for GM.

The news from General Motors continues to get worse. Last month the carmaker began a worldwide recall of over one million of its vehicles, including the Chevrolet Cobalt and Saturn Ions, due to faulty ignition switches that resulted in 12 deaths. Then, a federal review of those GM vehicles dating from 2003 to 2012 found that faulty airbags were responsible for an astonishing 303 deaths.

Lawmakers are pressing for answers as to how long GM knew about the issues and what they did about them. GM’s answer has been to launch what chief executive Mary T. Barra calls an “unvarnished” investigation. Leading this investigation will be the law firm of King & Spalding – the same firm that had been defending GM in wrongful death lawsuits.

Conflict of interest? Whether it will be in reality or not isn’t really the question. The firm will have to do enough digging to preserve their reputation while still being able to call GM one of their main clients. But if anyone asked internal PR what this move would look like to the outside world, GM apparently ignored that information as well.

THE PR VERDICT: “D” (PR Problematic) for GM.

THE PR TAKEAWAY: Even in times of triage – perhaps especially so – appearances matter. When faced with a product issue that has resulted in death, companies must quickly go into damage control. The smartest take immediate measures to prevent further injury or loss of life, own up, and set their PR firms to work on image rebuild. In GM’s case that time is over. And ironically, the company’s goal – preserve the bottom line by presenting the image of taking action – can shoot itself in the foot with the implication of more coverups, this time by the company’s trusted law firm. It’s an action, but it’s hardly a strategy, and it may cause more damage than it controls.

Comcast Sells Mega-merger, Though Few Buy It

ComcastRoberts Comcast Sells Mega merger, Though Few Buy It

THE PR Verdict: “C” (Distinctly OK) for Comcast and CEO Brian Roberts.

Comcast CEO Brian Roberts had his work cut out for him last week trying to convince anyone that his company’s $45 billion purchase of cable rival Time Warner was a boon to anyone other than Comcast. Yet gamely he tried, and for that he and Comcast earn points for consistency.

The two parties spun the purchase as a “merger,” when in fact Comcast would be absorbing all of Time Warner – that is, if the transaction is approved by shareholders and regulators. Roberts called the deal “pro-consumer, pro-competitive, and strongly in the public interest.” Another Comcast exec took up the anti-monopoly argument by emphasizing that the two companies currently “do not compete in a single zip code in America.” Comcast also claimed the deal would benefit net neutrality, at least until current protections expire in 2018, and predicted regulatory approval.

Not surprisingly, few bought any of Comcast’s claims. A former FCC commissioner said the deal would “run roughshod over consumers.” One industry expert spelled out why the “pro-consumer” argument was “nonsense,” while another shot through the claim that cost-saving “synergies” Comcast predicted would ever make their way into consumers’ bills. And public advocacy groups called on the FCC and anti-trust authorities to block the purchase. Amid the pile-on, however, Comcast kept cool and did not stray from its script.

THE PR VERDICT: “C” (Distinctly OK) for Comcast and CEO Brian Roberts, for keeping their emperor fully clothed – appearances to the contrary.

THE PR TAKEAWAY: Stick to your story. The script Comcast used in announcing their deal stressed the same talking points over and over. Questions implying the contrary were deflected or ignored. With a controversial merger such as this, coming so soon after the apparent defeat of net neutrality, Comcast needs to win in the court of public opinion as much as that of the regulators. It’s hard to predict which will be the tougher fight, but the same arguments will carry in both theaters.

 

Jeffries Out of Style at Abercrombie?

 Jeffries Out of Style at Abercrombie?

THE PR VERDICT: “D” (PR Problematic) for Mike Jeffries and Abercrombie & Fitch.

Fashion trends rarely live beyond a season. The shelf life of those who create the trends may last longer, but an article in the spring fashion issue of New York Magazine may herald the end of one long-running reign: that of Mike Jeffries, CEO and former chairman of the board at Abercrombie & Fitch.

The piece could easily have made more of Jeffries’ pecadillos, such as his extensive cosmetic surgery and draconian regulations about male model staff aboard the corporate jet. Instead, it focused instead on a familiar story: a steady rise, and a precipitous fall. Jeffries created a multi-billion dollar brand with iconic merchandising that teenagers could not get enough of; now, in the wake of $15.6 million losses last quarter, Jeffries is no longer chairman of the board, and there are rumors of replacement.

A&F did not make Jeffries available to contribute to the story. Quotes about his micromanagement style came from former employees and associates, who theorize that brand exclusivity, created by Jeffries, was behind A&F’s success in the 1990s, and its downfall in the inclusive aughts. “What we’ll remember Jeffries for now is for failing to change, for all the store closures, for the way employees were treated,” says Brian Sozzi, head of Belus Capital Advisors. “That’s unfortunate.”

THE PR VERDICT: “D” (PR Problematic) for Mike Jeffries and Abercrombie & Fitch.

THE PR TAKEAWAY: Step to the side, then make a re-entrance.  New York Magazine’s article is the kind that causes damaging chatter within its industry. First defense? Say nothing, as A&F did by not contributing quotes. Second: Pause, so that the next action taken isn’t viewed as defensive. Third, return with bold news – a new line and a new initiative. A&F could still make a comeback. After all, every fashion trend gets another strut down the catwalk.

AOL CEO’s Remarks on Benefits a Detriment

tim armstrong aol AOL CEOs Remarks on Benefits a Detriment

THE PR VERDICT: “D” (PR Problematic) for AOL CEO Tim Armstrong.

AOL CEO Tim Armstrong is back with another PR blunder that contributed to, if not prompted outright, an embarrassing corporate about-face. His latest gaffe came last week after AOL made a change to its 401(k) matching policy for employees, revealing that it would only match employee contributions at year’s end instead of throughout the year, and only for employees who are “active” through December 31.

Bad enough to adopt a miserly policy that robs employees of potential stock market gains in their retirement portfolio, but Armstrong added to the firestorm by blaming the change on Obamacare and on two “distressed” pregnancies that cost the company $1 million each in healthcare expenses. “We had to decide, do we pass the $7.1 million of Obamacare costs to our employees? Or do we try to eat as much of that as possible and cut other benefits?” Armstrong said, digging a deeper hole by going on to discuss the expensive pregnancies.

Too bad for Armstrong that AOL announced, at virtually the same time, a 13 percent increase in quarterly revenues, its best growth in a decade. The next day, he announced that AOL would reverse its 401k decision and apologized for singling out the two new mothers, but not before one observer recalculated his salary in terms of distressed babies per year.

THE PR VERDICT: “D” (PR Problematic) for Tim Armstrong and AOL for bad timing, bad policy, and bad employee relations.

THE PR TAKEAWAY: Avoid scapegoating. Armstrong, like so many other CEOs, looked stingy in blaming Obamacare for forcing cuts elsewhere  – especially with AOL’s simultaneous rosy earnings announcement. (Is anyone managing communications flow at the company?) He doubled down by essentially blaming two specific employees for having the audacity to need expensive health care – pregnant women at that. Why not blame black rhinos for being hunted to near-extinction for their careless habit of having horns that poachers will kill for?

As Facebook Turns 10, Zuckerberg Comes of Age

 

 As Facebook Turns 10, Zuckerberg Comes of Age

THE PR VERDICT: “A” (PR Perfect) to Facebook’s Mark Zuckerberg.

Facebook turned 10 years old this week, and Mark Zuckerberg, Facebook founder and CEO of the world’s most successful social networking platform, used that milestone to come of age.

Zuckerberg, the 29-year-old entrepreneur who started Facebook in 2004, has never been much of a media fan. For Facebook’s birthday, however, he participated in several interviews, including NBC’s Today Show and Bloomberg Businessweek. Though he briefly alluded to the early days, he spent the bulk of the interviews speaking about the network’s massive cultural impact and detailing current and future business plans (three-, five-, and ten-year plans, to be exact). The result? He came off as a successful and confident executive at the helm, adroitly steering Facebook into its next decade.

This evolution of his persona is significant both for Zuckerberg, and for Facebook. In the past, he’s been depicted as a brilliant but arrogant smart aleck whose tech prowess eclipsed his business acumen. In recent months, too, media coverage has focused on how Facebook may be losing traction with teenagers, the base on which it was built. These interviews gave Zuckerberg a broad platform to speak directly to multiple stakeholders at what may be a turning point in the company’s young history.

THE PR VERDICT: “A” (PR Perfect) to Facebook’s Mark Zuckerberg. Maturity looks good on him.

THE PR TAKEAWAY: The media can offer redemption as well as criticism. Several things conspired to make this a PR success. Zuckerberg’s reluctance to do media has worked in his favor. When he does have something to say, the media listens. He pinned his interviews to Facebook’s 10th birthday, a built-in news hook. And he was clever about the venues he chose: the Today Show speaks to millions of (older) users and potential users, while Bloomberg Businessweek took care of the business side of the Facebook story. It’s a winning combination that artfully conveyed his message: Mark Zuckerberg is a big boy now.

BOfA and Bono Team Up for Charity

 BOfA and Bono Team Up for Charity

THE PR VERDICT: “A” (PR Perfect) for BofA’s brand-building philanthropy.

When was the last time an activist rock star gave a standing ovation to a “too-big-to-fail” bank? That’s just what happened last week when U2 front man Bono extolled the generosity of Bank of America and joined CEO Brian Moynihan at the World Economic Forum in Davos.

Moynihan and U2 frontman Bono announced a $10 million BofA commitment to RED, the AIDS charity co-founded by Bono. In a clever promotional twist, the bank will tie its donation to U2′s newest album release during the upcoming Superbowl. BofA agreed to pay for every download of the album’s song “Invisible” for 24 hours, an investment they will back with expensive Superbowl advertising.

Rarely have Moynihan and his bank basked in such a warm reception. Under the bright Davos sunshine, CNBC and The Financial Times (among other news media) took turns interviewing the Boston-based banker and his rock activist partner. The visual contrast was nearly as noteworthy as Bono complimenting the bank for its “game-changing influence.”

THE PR VERDICT: “A” (PR Perfect) for BofA’s brand-building philanthropy.

THE PR TAKEAWAY: Regain trust by carefully picking your allies. Despite continuing efforts to engage in a public dialogue and foster good will, progress has been incremental over the past five years. In Davos last week, BofA wisely avoided interviews about its business. Instead, it joined a unique global health initiative and happily played back up to a true superstar. Well done, BoFA.

The PRV Report Card: This Week’s Winners & Losers

 The PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to H&M, the sole clothing retailer set to advertise during the Superbowl. They’re going against heavyweights in the automotive, fast food and alcohol groups, but their $4 million gamble will likely pay off thanks to advance buzz on their commercial. In it, soccer star David Beckham, who has a line of underwear with H&M, will appear either in his briefs or naked (by TV standards) according to fan votes of #covered or #uncovered. This could be the first Superbowl in history with higher female than male ratings.

dimon The PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (Full Fiasco) to Jamie Dimon, CEO of JP Morgan, for telling CNBC that the expensive government legal cases against his bank were “unfair.” In swanky Davos, Switzerland for the World Economic Forum, Dimon said the bank, which paid $13 billion to settle claims over mortgage securities dealings and $7 billion more over hinky derivatives, power trading and overselling of credit card products, faced “two really bad options” between settling or fighting the cases. Going to court “would really hurt this company and that would have been criminal for me to subject our company to those kinds of issues.” Criminal as in, say, fraud? Better not to have picked up this gauntlet.

george zimmerman painting 300x235 The PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD to George Zimmerman, acquitted of murder and now trying his hand at  “art.” Last July, Zimmerman was found not guilty of the 2012 murder of Florida teenager Trayvon Martin. With a stack of hefty legal bills and job prospects presumably thin, Zimmerman has miraculously found his inner painter. His first piece, a blue flag with a patriotic verse painted on an 18 x 24-inch canvas, sold for more than $100,000 on eBay. His second work depicts prosecutor Angela Corey holding finger and thumb slightly apart with the caption “I have this much respect for the American judicial system – Angie C.” We fervently hope the art-buying world has even less than that for George.

 

Martha Stewart’s Bad PR Continues with Holiday Layoffs

 Martha Stewarts Bad PR Continues with Holiday Layoffs

THE PR VERDICT: “D” (PR Problematic) for Martha Stewart Omnimedia

An unwritten rule in publishing used to be no layoffs between November and January. No company wanted to appear either heartless or desperate and ruin employees’ holidays. But just as print gives way to digital, so the old rules are broken in favor of the first law of business: survival of the fittest. And so last Thursday, Martha Stewart Omnimedia terminated 100 employees, roughly a quarter of its staff, two weeks before Christmas.

The move itself isn’t that big a surprise for a company that has been losing money steadily in recent years. Ad pages in MSO magazines are down, and the company ceased publication of two titles, Everyday Food and Whole Living, earlier this year. Television productions have also lost revenue.

While the terminations may save some money, the timing of them does nothing to stanch the flow of negative publicity for MSO including the recent court case with Macy’s. Now come terminations at the behest of new MSO CEO Daniel Dienst, described as a “veteran turnaround expert” by the Wall Street Journal. Stewart released the quote, “Dan has specific expertise helping companies run efficiently and productively.” This season Martha’s holiday cheer gives rise to nothing but scorn for the 100 employees whose got a gift wrapped pink slip for Christmas.

PR VERDICT: “D” (PR Problematic) for Martha Stewart Omnimedia.

THE PR TAKEAWAY: Appearances can be aggrieving. When taking a company’s bottom line into consideration, factor in customer reaction. Martha Stewart caters to female consumers – specifically, homemakers. Really specifically, women who wouldn’t want their joyous holidays turned lean after being fired by a Scrooge. The timing for this could not have been worse. Tough decisions need to be made, no doubt, but timing in cases like this really is everything.