Pity poor Microsoft – no, really. Tech’s original 800 lb. gorilla may have shed a few pounds since its heyday, but it continues to punch well below its weight. And its PR strategy, such as it is, doesn’t seem to be helping much.
Consider this: While its Q4 2013 earnings, announced last week, showed enviable revenue and income gains year over year, they also included a $900 million writedown on unsold inventory of its Surface RT tablet computer, a hoped-for iPad killer. In response, it announced a management shake-up of its hardware division. Its stock tanked anyway, dropping 11 percent and erasing $30 billion in value.
From a PR standpoint, Microsoft continues to fare the worst among seven tech giants caught up in an ongoing debacle over the US government’s Internet eavesdropping program known as PRISM. It ill-advisedly sought to use the breach to stoke competition, going after Google in a PR campaign promoting online privacy. That proved embarrassing after new disclosures surfaced that Microsoft helped the government circumvent its own encryption methods.
Institutional investors, dismayed by the company’s strategy and execution, want a seat on the board and a say in management. Of particular concern is succession planning for CEO Steve Ballmer, who has led the company since 2000. Microsoft says it has a plan but won’t disclose it.
THE PR VERDICT: “D” (PR Problematic) for Microsoft. Its half-measures, hubris and haughtiness suggest the need for a full-on PR intervention.
THE PR TAKEAWAY: Take a hard look within. A periodic full-scale review of PR strategy is essential, and best conducted by an outside consultant free from corporate groupthink, before a crisis. Microsoft is fumbling on basic issues management. It could have given investors succor with a mea culpa on its product writedown. It could allay the longer-term management concerns with greater transparency. It should have seen the folly in trying to capitalize on the privacy issue while damaging disclosures were potentially in the wind. Long-time archrival Apple has maintained goodwill in the past with public acknowledgments and apologies for its missteps. To quote its rival, Microsoft needs to “Think different.”