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

hijabs The PRV Report Card: This Weeks Winners & LosersPR WINNER OF THE WEEK: “A” (PR PERFECT) to the Overland High School girls soccer team in Aurora, CO, for a stirring show of solidarity. Last week, referees barred one Muslim player on the team, Samah Aidah, from playing with a hijab on her head, calling it “dangerous.” Never mind that FIFA, soccer’s international governing body, officially permits the practice – not to mention the US Constitution. For the next game, all of Samah’s teammates and coaches wore the traditional Islamic headscarf in support. A tweet by one of the girls with a picture of team, all in headscarves, sent the matter viral. Young people leading by example, again.

 The PRV Report Card: This Weeks Winners & LosersPR LOSER OF THE WEEK: “F” (FULL FIASCO) TO Lady Gaga, who continues to have a bad hair year. She fired her longtime manager, and her latest album, ARTPOP, hasn’t sold nearly as well as her previous collection, Born This Way. Now, her Born This Way Foundation, which seeks to “foster a more accepting society,” is under fire. Tax reports for 2012 show that BTWF spent $1.85 million in legal fees, salaries, travel, philanthropic consulting, and $808,661 in “other” expenses. Actual donations? A mere $5000. An example of how celebrity foundations aren’t born bad, they’re made that way.

 The PRV Report Card: This Weeks Winners & LosersTHE PRV “THERE’S NO ‘THERE’ THERE” AWARD TO newly annointed Federal Reserve Chief Janet Yellen, who tried (and failed) to avoid rattling financial markets by couching her comments at her first press conference. Oh Janet, have you not studied your predecessors’ previous faux pas? After saying “We will try as hard as we can not to be a source of instability here (regarding communications)”, Yellen promptly gave what investors interpreted as a potential timeframe for interest rate increases, and one earlier than they had expected. Was that the message Yellen meant to convey? Who knows — and it doesn’t matter. Stock markets fell, bond yields rose, and the world carries on. PR tip to the head of the Fed:  When it comes to interest rates, “no comment” is the best comment.

Twitter CEO Won’t Duck Challenge (But Should)

costolo11 Twitter CEO Wont Duck Challenge (But Should)

THE PR VERDICT: “D” (PR Problematic) for Twitter CEO Dick Costolo.

Feisty Twitter CEO Dick Costolo never shies away from a flame war, slugging it out in 140 characters or less with all comers. His firm’s forthcoming IPO was apparently no occasion for him to consider toning it down. This time, he’s taken to task critics of Twitter’s virtually all-white, all-male leadership.

Going into its IPO, Twitter, as the New York Timenoted last week, has no female investors, no female board members, and only one woman among its top executives. And she was hired just five weeks ago. Those numbers aren’t rare in Silicon Valley, but that’s hardly cause to forgive the oversight, as Twitter’s critics noted. “The fact that they went to the IPO without a single woman on the board, how dare they?” said Vivek Wadhwa, a Stanford professor.

Twitter declined comment on the matter, but not Costolo. In a tweet, he reverted to name-calling, comparing Wadhwa to Carrot Top, an outlandish, hyperbolic comic. The battle was quickly joined, and while Costolo might have a point, is this really the story his company needs right now as its IPO filing comes under scrutiny?

THE PR VERDICT: “D” (PR Problematic) for Twitter’s Dick Costolo, for letting his ego get the better of him at a critical time for his company.

THE PR TAKEAWAY: Choose your battles, and your timing. For one, Twitter’s corporate demurral on the subject looks a little silly next to Costolo’s tweeted tirade. For two, why create needless distraction right now? Sure it’s not likely the kerfluffle will adversely affect the IPO share price, but what was gained? A more mature response might have given the opportunity to engage constructively on an important tech industry issue – the dearth of women in leadership roles. More generally, though Costolo has won praise for corralling an unfocused, wayward company, shouldn’t a CEO be striving consistently to raise the bar on level of discourse instead of knocking it down a few notches? One hundred and forty characters can be used for good, but it’s surprising how much damage can be done by one character’s bad attitude.

AIG CEO’s Comment Goes (Deep) South

 AIG CEOs Comment Goes (Deep) South

THE PR VERDICT: “F” (Full Fiasco) for AIG’s Robert Benmosche.

Five years ago, when AIG was rescued by the US government, the insurer became the poster child for everything that had gone wrong in the financial services industry – inflated balance sheets, insufficient controls, and corruptive bonuses. The company then embarked on the steep path to restore its financial health and reputation. Led by Robert Benmosche, appointed CEO in 2009, AIG underwent a drastic turnaround, with uncompromising cuts to its balance sheet and work force. As a result, the US government was able to exit its investment with a profit of $22.7 billion and, in August this year, the company announced higher profits as well as its first dividend payment and share buy-back since 2008.

All’s well that ends well? Not quite. Benmosche managed to turn his interview with The Wall Street Journal from a PR opportunity to a disaster by comparing the 2009 outrage over AIG bonuses to racism in the Deep South. The uproar, he said, “was intended to stir public anger, to get everybody out there with the pitchforks and their hangman nooses, and all that – sort of like what we did in the Deep South…and I think it was just as bad and just as wrong.”

AIG’s staff undoubtedly worked hard; without them, the government bailout would have ended in tears for shareholders and tax payers alike. Nevertheless, the public cannot be expected to offer sympathy or gratitude. If Benmosche wanted to make employees feel better, he achieved the opposite. After a long crisis, all they wanted was to get on with their jobs, without battling constant controversy around their employer. Hard luck.

THE PR VERDICT: “F” (Full Fiasco) for AIG’s Robert Benmosche.

THE PR TAKEAWAY: Some fights can never be won. Executive interviews have some absolute “don’ts.” The most important is to never – ever! – compare anything that happened in an industry or in a company to a historic event rife with human suffering. The comparison will always sound deluded and bring out debate that widens the issue not narrows it. Compensation is also better left untouched, especially if it has already been under fire in the past. Executive pay was a PR battle AIG lost years ago. When coming back from a crisis, remember no headline is always preferable over a bad one.

Crashing BlackBerry Grounds its Corporate Fleet

bombardierblackberry Crashing BlackBerry Grounds its Corporate Fleet

THE PR VERDICT: “C” (Distinctly OK) for BlackBerry, looking business-classier for flying coach.

Running a struggling business? Talk to BlackBerry.  The once-dominant Canadian firm that missed the smartphone revolution has slid into a long, painful decline. Friday, the teetering handset maker announed a $1 billion quarterly loss and a huge restructuring including the elimination of 4,500 jobs, or about 40 percent of its workforce. Yesterday, it announced plans to be taken private by one of its largest investors.

Its latest miss was remarkable only for the size of the loss. A more eyebrow-raising revelation came to light in the media over the weekend: BlackBerry acquired a third corporate jet, estimated at over $20 million.

B lackBerry responded not only with a plausible explanation, but also a plan of action.  The jet had been purchased to replace the other two and in light of its current business condition, a company spokesman said, BlackBerry would sell all three of its corporate jets and “no longer own any planes.” This, of course, is the logical, prudent thing to do, and Blackberry wins points for it. In the age of corporate excess hubris can be fatal.

THE PR VERDICT: “C” (Distinctly OK) to BlackBerry, for a quick response that defused an immaterial but nonetheless embarrassing story.

THE PR TAKEAWAY: Symbolic actions count. A global firm that, though troubled, is still worth billions arguably has a need for its own jet, and BlackBerry could have rested on that claim. But doing so would hardly have engendered goodwill for a company axing nearly half  its workers. The logic might not have figured directly in BlackBerry’s decision to ground its fleet, but at least the company, already with plenty to regret, has one less bad decision to answer for.

For New Fed Chairman, the Message is the Medium

 For New Fed Chairman, the Message is the Medium

THE PR VERDICT: “B” (Good Show) to Janet Yellen (right; with Larry Summers) for her methodical approach and realistic expectations.

As President Obama prepares to name a new Fed Chairman, he may be well advised to look closely at the communications skills of the candidates. Ben Bernanke dragged the Fed into the modern age of communications and institutionalized commonplace PR strategies to the Fed’s tool kit.

A comparison of the two leading candidates, Larry Summers and Janet Yellen, suggests that both have communications know-how. No doubt Summers is a more practiced communicator, but Yellen has fully embraced today’s communications/transparency paradigm. Under Bernanke, she led a subcommittee on communications and presumably developed the playbook for publicly releasing FOMC minutes, issuing monetary policy “guidance,” as well as establishing a schedule of post-FOMC-meeting press conferences.

But despite Yellen’s studious approach to communications, Bernanke has had trouble staying on message. Bernanke suggested accelerating QE “tapering.” Markets reacted badly, and at his next press conference, Bernanke pushed back. The Fed would “continue to support the recovery,”  but his message was lost in the media glare. One live blogger wrote: “Bernanke seems frustrated that markets and pundits don’t understand the point of policy guidance.”

THE PR VERDICT: “B” (Good Show) to Janet Yellen’s methodical approach and realistic expectations.

THE PR TAKEAWAY: The best communicators focus on long-term objectives. While she has had some bad breaks managing her Chairman’s PR with the financial markets, Yellen believes good communications can support monetary policy and reinforce the Fed’s leadership. As she told journalists in April, “I believe further improvements in the FOMC’s communication are possible, and I expect they will continue.” No PR plan can work flawlessly. The institution you speak for is the message, not how aggressively you handle the media or how articulately a spokesperson expresses a viewpoint.

Royal Bank of Scotland’s Hester No Fool

 Royal Bank of Scotlands Hester No Fool

THE PR VERDICT: “D” (PR Problematic) for the UK government. (Pictured: Royal Bank of Scotland’s Stephen Hester)

Government, it seems, is no match for bankers and executives who run the world’s most powerful financial institutions. The world got another reminder of this on Wednesday when Stephen Hester, Chief Executive of Royal Bank of Scotland, abruptly tendered his resignation. The news might have slammed Hester as another wealthy banker too arrogant to work under government supervision. Instead, Hester left his post like a hero, with lavish praise from the folks who fired him and the admiration of shareholders.

News of his departure sent the stock down, triggered headlines about bereft employee morale, and prompted a Treasury minister to address the UK’s House of Commons with a statement full of hyperbole about Hester’s success at getting the job done.

The reason for the departure? Apparently the government wants to “turn the page” on RBS and divest itself of the business it bailed out. Investors in a privatization deal will not view Hester’s leadership favorably, reckoned the bureaucrats. Instead, so their thinking goes, the market wants to see a leader who represents the future, not the past. Fair enough but for the unanswered questions: Who is Hester’s replacement? And if he’s as good as you say, why show your most capable leader the door? Why not let him help you through the “transition?”

THE PR VERDICT: “D” (PR Problematic) for the UK government for badly mishandling an announcement with a communications strategy that begs many questions.

THE PR TAKEAWAY: Before firing, have a replacement lined up, or suffer the consequences. The RBS privatization has a chance to succeed, but the government just raised its cost of capital unnecessarily by showing the current CEO the door, with no apparent plan for replacement. Once the press statements were finalized and the polite, politic resignation letter released, Hester told the truth that he’d wanted to stay after all. While he got to appear as though he’d orchestrated an effective career transition, Chancellor of the Exchequer George Osborne et al were left holding a bag of empty words. Next time, think before you pink slip.

 Royal Bank of Scotlands Hester No FoolPRV Contributor Pen Pendleton is a communications professional with 20 years experience in business and financial public relations. He began his career as a newspaper reporter and now works as a consultant in New York. 

Austere Today, Gone Tomorrow?

 Austere Today, Gone Tomorrow?

THE PR VERDICT: “F” (Full Fiasco) for the proponents of austerity, who continue to lose a losing battle.

What now for the proponents of austerity? Up until last month it seemed they had won the policy and PR debate. With disciples across Europe and the US, and with Angela Merkel as its high priestess, fiscal restraint was positioned as a dose of much needed tough medicine. The mantra was clear; no pain, no gain. Politically unassailable, this was one helluva PR launch with some influential backers. Over the last month, however, things have become a little more complicated: austerity may have lost its PR claim as a cure all.

Last week, economists at the University of Massachusetts reviewed calculations cited in Growth In a Time of Austerity, the bible for those justifying tightened fiscal policy, as flawed. The claim? The research published in January 2010 by Harvard University included “selective exclusion of available data and unconventional weighting of summary statistics.” The case for austerity is now not so clear.

Since then, austerity seems to be losing more and more PR steam. EU nations are sliding deeper into recession, with unemployment in Spain and Greece topping 30 percent. In Britain, austerity is responsible for a limp 0.3 percent growth, while Germany, the champion of austerity, is teetering on the edge of recession. Has austerity fallen out of fashion? The headlines would seem to suggest that less has not added up to more.

THE PR VERDICT: “F” (Full Fiasco) for the proponents of austerity, who continue to lose  a losing battle.

THE PR TAKEAWAY: Product launches can teach us something about ideological launches. If austerity was a consumer product, it would now be sitting on the supermarket shelves unloved and unwanted. Why? Because not one of its proponents have been able to demonstrate tangible benefits. Despite a big and loud launch, its advocates seem to be retreating into the shadows. Where are the business leaders confirming they are hiring in the face of cutbacks? Without some simple proof points and enthusiastic advocates, this is one launch that might have seen its brief vogue run right out of steam and into the dustbins of economic history.

 

Is Apple’s PR Bruised?

 Is Apples PR Bruised?What to think of Apple? To hear stock analysts and business anchors talk, one would think Goliath had just taken a severe hit to the head. Apple has been the undisputed giant of tech for so long that the slightest waver on its feet has everyone talking about how the mighty may soon be falling.

True, profits are down – about 18 percent this quarter, and the first decline for Apple in a decade. Speculation that the company might slope downward following the demise of leader Steve Jobs didn’t come to pass immediately, but the birth of competitive, and cheaper, products are starting to pose a threat. And there are no new products coming from Apple, which is bad news for a company that caters to consumers mad for the latest in tech devices.

Another first for Apple is having to borrow money. The explanation? Rather than face taxes on bringing in offshore assets, Apple will take a loan to pay $100 billion to shareholders by 2015, which pleases some, but perplexes others. Bottom line: should Apple be in crisis mode or business as usual?

THE PR VERDICT: “C” (Distinctly OK) for Apple. The news isn’t good, but then again it isn’t all rotten.

THE PR TAKEAWAY: A company’s reputation can precede, and quiet, speculation. Apple may be wavering in its long-held number one slot, but one of the company’s priorities has been building a brand. People don’t speak of phones; they talk about iPhones and lead iLives. Consumers still see Apple products as cool and a cut above the rest despite their ubiquity.  While cheaper products may come around, it will take far more than that to put a dent in Apple’s brand loyalty. Apple’s PR should continue to polish its image and brand and let the stock price see-saw of its own accord. Apple’s upward unrelating share price climb had to come to an end at some point. Best thing is to pause and catch a PR breath.

The 5 Toughest PR Assignments of 2013

This week, we’ve been looking back over some of the more challenging moments in public relations, yet they seem simple in comparison to the PR assignments for 2013. We invite our readers to pitch strategies for the following assignments; any takers?

 The 5 Toughest PR Assignments of 2013DEFENDING THE NRA: With the Newtown killings, American public opinion appears to have reached the proverbial tipping point. Public discourse now is less about freedom and the constitutional right to bear arms and more about child safety and the appalling level of gun deaths in the world’s largest and most modern society. With over 10,000 gun-related deaths a year, this PR brief is going to need some very creative thinking. The well-worn PR positioning that an armed society is a polite society won’t cut it – nor will the old saw that “guns don’t kill people.”

 

 

 The 5 Toughest PR Assignments of 2013REBEKAH BROOKS’S IMAGE REHAB: With Rebekah Brooks standing trial along with a number of other Murdoch employees in 2013, on multiple charges including attempting to pervert the course of justice, getting her image right will be job for Super PR. Continuing to claim that she was blissfully unaware of phone hacking won’t work, as her employer has already compensated numerous victims; her previous protests of innocence will come unstuck if the jury fails to be won over. If that happens, many other questions will be raised about what has been said previously by Murdoch management. Some elegant backtracking may be required; just saying.

 

 

 The 5 Toughest PR Assignments of 2013MAKE WALL STREET LOVEABLE: Liborgate, money laundering, financial fraud, trading losses… Making the public like, or even tolerate, the world’s leading investment banks is a constant uphill battle. Just as Wall Street thought it was over the worst, it has been newly dragged into fresh cesspools of scandal and vice. A PR offensive will be needed to fight its corner, resisting calls for reduced bonuses and reining in a risk-taking culture. Given the latest scandals, this is one campaign likely to fall on deaf ears. Good luck.

 

 

 The 5 Toughest PR Assignments of 2013AUSTERITY IS GOOD FOR YOU: No one likes being poor, whether government or private citizens. Europe has been told repeatedly that swallowing the equivalent of castor oil is for the greater good, but national patience with “slash and burn” economics is thin to nil. The stagnant economy and economic hardships look set to continue; four years after the financial crisis, European countries are still languishing. If the prescribed medicine continues, it will need some better PR sugar.

 

 

 The 5 Toughest PR Assignments of 2013ANNA WINTOUR FOR SECRETARY OF STATE:  The current editor of US Vogue is rumored to be a potential US ambassador to France, or her home country, the UK. A powerful Democratic fund-raiser, the appointment of Wintour, not a politician, would not be without precedent – just look at Pamela Harriman. Wintour’s supporters say she’d find the job “dull”; pal Oscar de la Renta suggested the ONLY official office that would suit Wintour would be Secretary of State. If that’s the case, Anna will need some clever PR to get through the rigorous approval hearings. Our humble PR tip?  Start by removing the sunglasses when indoors.

 

We at the PRV wish our readers a happy holiday season.

We will be back on 7 January 2013. Happy New Year!

 

 

 

SAC Capital and the Art of Halting an Investor Stampede

 SAC Capital and the Art of Halting an Investor Stampede

The PR Verdict: “A” (PR Perfect) for SAC Capital. (Pictured: Steven Cohen)

The clock is ticking for SAC Capital Advisors, the hedge fund run by Steven Cohen, now linked to an insider trading case that the government is touting as one the largest of its kind. As regulators are said to be “closing in” on the fund, SAC clients, whose money is managed by the firm, now have 90 days to decide if they’ve had enough and want their money back. Should they redeem, or keep their money there?

SAC, which manages over $14 billion, recently confirmed to investors that the firm might face civil charges over the alleged insider trading scheme that has already led to the arrest of a former employee. Normally, news like this would have investors rushing for the exits, provoking a disastrous run on the fund. But if the firm intends to emerge from its latest legal worries with an ongoing business, reassuring investors while being transparent about its legal woes is the immediate PR challenge.

Not all investors are happy; some have indicated they want to redeem. One French bank has reportedly cashed in its chips already. But other large investors are on the record as saying they will reserve judgment and keep their money with SAC, reiterating their faith in the firm and its management. To SAC investors wavering about what to do, public confirmation from co-investors that their money is staying put is just the sort of signal they’re looking for. At the moment, some clever PR is calming a situation that could otherwise become very risky.

The PR Verdict: “A” (PR Perfect) for SAC Capital. Endorsement from others is always better than tooting your own horn.

The PR Takeaway: If you want the message about you to be heard, let your friends say it. SAC ‘s recent coverage contains a surprising number of reputable and well-known investors confirming that they are sticking with the firm – at least, for the moment. For SAC management seeking to reassure investors, it’s the best sort of message, and one that it couldn’t deliver itself.

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