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?

Tech Titans Flex Anti-Surveillance Muscle With… a Website?

SurvReform Tech Titans Flex Anti Surveillance Muscle With... a Website?

The PR Verdict: “C” (Distinctly OK) for Big Tech’s anti-snooping website.

The tech sector’s biggest names – Google, Yahoo, Microsoft, Facebook, LinkedIn, and others – have taken a hit this year for their complicity with government surveillance programs. With each new creepy disclosure on the depth and scope of the spying, the tech firms have found more courage to fight back  for the freedom of the Internet and the privacy rights of their users. Hence this week we have their boldest move to date…um, a new website?

Well, a feckless-looking Silicon Valley had to do something. Eight firms with a combined value of $1.4 trillion have signed on to an effort to reform “global” government surveillance – though clearly the main bogey is the US. Taking the time-honored but largely symbolic tack of an “open letter to Washington,” the tech firms cite the “urgent need to reform government surveillance practices worldwide” and implore the US to take the lead. “For our part, we are focused on keeping users’ data secure,” they add. Not to mention their business models.

What’s missing? How about telecom companies, network equipment makers, financial interests like credit card companies? Again, it’s a start. As a skeptic notes, the effort is driven more by economic than good-government interest, as the firms continue to face backlash for cooperating with the surveillance effort in the first place.

THE PR VERDICT: “C” (Distinctly OK) for the tech sector backers of surveillance reform.

THE PR TAKEAWAY: Give your cause higher purpose. You’ll win more friends, allies and better headlines. The Tech sector backers of the surveillance reform effort have a clear economic interest in protecting their users from prying government eyes. But “Don’t spy on our users – we might lose money” is hardly a rallying cry. Silicon Valley is imbued with a libertarian spirit that abhors government intrusion, if not always for the noblest reasons. Whether the website is just a PR move, or a lead-in to real political action backed by the sector’s considerable economic might, will be monitored closely. And not just by government snoops.

For AOL’s Armstrong, It’s “Ready, Fire, Aim”

tim armstrong For AOLs Armstrong, Its Ready, Fire, Aim

THE PR VERDICT: “F” (Full FIasco) for AOL’s Tim Armstrong.

The pressure is on AOL chief executive Tim Armstrong to turn things around at Patch, the micro-local news site that has been a money loser for the giant media company. Unfortunately for Armstrong, he let the pressure show in an embarrassing way last week, prompting observers to question his management.

On Friday, a day after telling Wall Street that Patch would close down one-third of its 900 sites to cut costs, Armstrong held a conference call with 1,000 Patch employees to lay out the reorganization plan and rally the faithful to the task at hand. To his credit, he took full responsibility for the current wobbly state of affairs. But he also handed out a tough-talking, slightly derisive admonishment to employees: work harder, or work elsewhere. If you are “not invested in Patch, you owe it to everybody else at Patch to leave,” he said, as can be heard in the widely-circulated tape of the call.

The harangue got worse. Two minutes in, Armstrong called out Patch’s creative director who, as is his custom, was taking pictures in the meeting room where the call originated. “Put that camera down. You’re fired. Out,” Armstrong said, scarcely pausing before continuing his “motivational” talk. Given the audience size, it was only a matter of time before the story at the local news site went national. Ironically, Armstrong later said he fired the creative head because he was tired of media leaks.

THE PR VERDICT: “F” (Full Fiasco) for AOL’s Tim Armstrong, for a tyrannical tirade that sullied not only his personal brand but spoke poorly of how the business is run.

THE PR TAKEAWAY: Mind your message, your medium, and your manners. Chief executives, whether by temperament or for effect, will occasionally turn to the tantrum to motivate the troops. But Armstrong’s erratic histrionics missed the mark, even if he hadn’t made things worse with an “Off with his head!” fit of pique. And in front of 1,000 people, no less. Remember: Unless you’re talking to yourself, what you say privately can always go public. Airing dirty laundry can result in losing your shirt.