Does Microsoft Need to Think Different?

Ballmer MSFT tablet Does Microsoft Need to Think Different?

The PR Verdict: “D” (PR Problematic) for Steve Ballmer’s Microsoft.

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.”

PRISM, Through the PR Looking Glass

 PRISM, Through the PR Looking Glass

THE PR VERDICT: “A” (PR Perfect) for Silicon Valley’s tech giants, for keeping it short but not mincing words in response to PRISM allegations.

PRISM, news outlets reported last week, is a clandestine program under which the US National Security Agency obtained “direct” access to the servers of Microsoft, Apple, Google, AOL, and Facebook, all of whom signed on to the program. The disclosure came on the heels of similar revelations about the government obtaining call logs of Verizon customers and spying on journalists. As described by the media, PRISM, an acronym for “Planning Tool for Resource Integration, Synchronization, and Management,” appears to be far more obtrusive and Orwellian than previously thought. One anonymous source said it enabled the NSA to “literally watch you as you type.”

Or does it? Faster than a trending tweet, the companies mentioned as being complicit in the citizen spying issued unambiguous denials. “Outrageous,” said Facebook’s Mark Zuckerberg. “Never heard of PRISM,” said Apple. Those denials, plus the government’s declassification and disclosure of some PRISM details, cast doubt on the story, which drew surprisingly muted public outrage anyway. Verizon’s response, in contrast, seemed contrived and concerned more with containing PR damage. The Washington Post, one of the outlets that broke the story, appeared later to walk back its initial reporting as other media outlets found experts to assert that the leaked PRISM documents had been misread.

THE PR VERDICT: “A” (PR Perfect) for Silicon Valley’s tech giants, for keeping it short.

THE PR TAKEAWAY: Keep it simple. When the story is misleading or just plain wrong, don’t waste a second in responding. Don’t get bogged down in ambiguous language that produces the infamous non-denial denial. Sometimes PR is not just about PR; it’s about setting the record straight, and doing so before a story long on accusations but short on facts spins wildly out of control. Journalists can make mistakes and some – gasp! – have agendas. When the press bites, reach out to your journalism friends (you have made some friends, haven’t you?) to set the story straight. And remember; bonus points for acting aggrieved, not angry.