Dec 10

Peppercomm/Directors & Boards Survey Shows Societal Crises are Keeping Nearly ALL Board Directors Up at Night

Eight-in-10 admitted their companies aren’t prepared. 

A recent survey of 43 directors of public and private boards revealed that nearly 90 percent are extremely or somewhat concerned about a societal crisis striking the company of which they are a director. An additional 84 percent of the directors said their company wasn’t prepared for crises ranging from mass shootings and trade wars to #MeToo and Twitter attacks from President Trump.

The survey was fielded immediately following a day-long simulation of a fictitious societal crisis created by Peppercomm, in partnership with Directors & Boards Magazine.

Other key findings included:

  • 77 percent of the participating directors were worried about their personal exposure and reputation as a result of the crisis.
  • 14 percent were EXTREMELY worried about their personal exposure.

The directors’ biggest concerns about a societal crisis impacting their company included:

  • Reputational damage (86 percent)
  • Business disruption (58 percent)
  • A drop in stock price (44 percent)

NOTHING NICE ABOUT I.C.E.

The simulated societal crisis (created by Peppercomm) concerned a publicly-traded company that had historically taken strong stances on human rights, but had just been “found” by employees to be providing I.C.E. with sensitive data about undocumented immigrants entering the country. Many employees were threatening to go on strike, BUT the CEO refused to cancel the I.C.E. contract.

After presenting the simulated crisis scenario to the directors, Peppercomm executives asked the group to answer such questions as:

1.) What’s the first step you would take?

2.) Would you issue a statement? If so, what would the wording be?

3.) If you decide not to issue a statement, explain the reasons why you’d remain quiet.

4.) What questions would you ask of the CEO (and her/his C-Suite)?

5) If you do decide to issue a statement, who would make it? The CEO? A board director? The CCO? Someone else? Why?

6.) Which stakeholder audience would take priority? Shareholders? Customers? Employees? Another group entirely?

7.) Would you engage outside counsel? If so, which ones?

8.) How would you define post-crisis success?

The simulation, which was held at New York’s Harvard Club on December 5th, will further inform Peppercomm’s already considerable knowledge of societal crises.

The firm has conducted three co-branded research studies with The Institute for Public Relations and recently launched the PR industry’s first societal crisis service offering called StandSmartTM.

Every director surveyed agreed on one thing: the worst time to test a company’s societal crisis readiness is in the midst of an actual mega incident.

Nov 28

Mega problems for mega industries

I never thought I’d be writing a blog that included the NFL and Big Tobacco at the same time but, hey, social media makes for strange bedfellows.

Both obscenely rich businesses find themselves in a world of hurt due to denial, deception and delay.  

Let’s kick-off with the NFL.

Did you know there are 72,000 FEWER high school students playing the sport today than just four years ago? Would you believe that outdoor track has overtaken football as the most popular high school sport?

Somewhere Jesse Owens must be smiling.

The reason why is obvious. Parents simply won’t let their sons play the vicious sport which, despite a few superficial changes to the rules by the NCAA and NFL, remains the ultimate end zone for players suffering from CTE and other debilitating brain injuries.

By the way, here’s an interesting stat that was buried in the articles I read about the slow, but steady, death of high school football: The number of girls in 11-player high school football has nearly DOUBLED in the same time frame!

The rate at which football is losing future generations of players is so acute the game may disappear completely by the year 2050 (Note: I hope the Jets can win another Super Bowl before the Lombardi Trophy ends up being sold for scrap).

Enough with football.

Let’s turn to an even deadlier pastime: smoking.

Recently the Food and Drug Administration finally stepped in to restrict all flavored e-cigarettes (also known as vapes) and is in the process of banning menthol cigarettes.  

And high schoolers are once again at the heart (and, sadly, lungs) of the controversy.

The FDA’s move was driven by a just-released study from the Centers for Disease Control and Prevention showing a 78 percent increase in vaping by high school students, with 3.6 million high school and middle school students now using e-cigarettes.

Try inhaling this statistic: current e-cigarette use among high school students increased from 1.5 percent in 2011 to 20.8 percent this year! Holy smoke!

In addition to cracking down on vaping, the FDA plans to ban menthol in ALL combustible cigarettes and cigars which it says is a gateway sweetener used to entrap otherwise unsuspecting teens into  a lifelong nicotine addiction.

The NAACP welcomed the ban, saying: “For decades, data have shown that the tobacco industry has successfully and intentionally marketed mentholated cigarettes to African-Americans and particularly African-American women.”

Not surprisingly, Big Tobacco is in complete denial. An Altria spokesperson said, “We continue to believe that a total ban on menthol cigarettes or flavored cigars would be an extreme measure not supported by the science and evidence.” Unreal.

The NFL and Big Tobacco can continue to deny their products lead to serious illness and death but time is slowly running out on each (at least in this country).

I can’t speak for football’s prospects in other continents, but tobacco will continue to thrive in those areas where poorly educated people of all ages are oblivious to its dangers and highly susceptible to glossy advertising.

If Big Tobacco was the name of an NFL player I’d ban him for life (for the sake of millions of future lives).

Nov 27

How Does a Beloved Brand Apologize to Billions?

Today’s guest blog is authored by Melissa Vigue who suggests a few things Dolce & Gabbana might consider doing if they ever want to sell another product in China….

This weekend, we observed as one the world’s iconic luxury brands took a lashing following a huge cultural misstep in China.

ICYMI, Dolce & Gabbana released eating with chopsticks, a series of videos, in the lead up to what was billed as one on China’s biggest fashion events ever, expected to draw not only the fashion elite but China’s most revered cultural icons.

In an effort to grab attention by being humorous (?), the brand and its patriarchs have deeply offended those of Chinese descent worldwide and the rest of us who don’t think using race or cultural practices as fodder for marketing is acceptable. The situation was further exacerbated by supposedly racist Instagram posts by Gabanna. He and the company have since said his account was hacked but the excuse rings hollow to this communicator.

The issue at hand today is how damaged is D&G’s reputation and can they win back the hearts of the market that buys more than 30% of the world’s luxury goods to shore up its bottom line? In the case of D&G, this goes far beyond perception and has immediately impacted the brand’s value with retailers and e-commerce sites dumping thousands of SKUs and multiple brand spokespeople vocally jumping ship.

The outcry began immediately and was not muted by the founders’ somewhat unusual yet well-intentioned video apology. The brand was forced to postpone its major fashion show in Shanghai, dubbed the country’s “biggest fashion gathering of its kind” amid models and guests announcing a boycott of the event.

The reasons for this swift response are twofold:

  • This isn’t the first time D&G has poked the bear. Last year, the brand released DG Loves China, a campaign depicting D&G clad models alongside what the culture viewed as “low class” and “old” China. The perception was that it was intentional behavior by a western brand looking to minimize China’s reputation and growth as a global power.
  • The pride in country, as indicated by this quote, is strong in China and cannot be understated. “The motherland is above everything,” stated D&G’s China ambassador and singer Karry Wang Junkai while renouncing the campaign and her relationship with the brand. What’s most fascinating is the fact that China is known for the use of stereotypical and sometimes downright racist depictions in its own material.

With this debacle fresh in our minds, we wanted to share a couple of parting thoughts for brands when architecting campaigns outside their home country:

  • Don’t rely on the creative “genius” behind the brand for what will resonate globally and culturally. It can gravely impact your brand value.
  • Learn A LOT about the markets you are entering and always socialize input from cultural experts.

It remains to be seen if this iconic fashion house’s rep can be repaired in the eyes of the market that makes up over 30% of the world’s luxury good sales but you can be sure we’ll be watching.

Nov 16

Ho. Ho. Whoa!

Some organizations throw lavish holiday parties to celebrate the season. Others set aside a full day to help a local charity.

And then there’s a Wisconsin company that is, hold for it, giving every employee a handgun for Christmas.

I do my best to stay apolitical in blogs, but there are so many reasons why CEO Ben Wolfgram (pretty cool name, no? Fits his gift-giving idea like a gun to a holster) really shouldn’t be adding to the proliferation of firearms AND tying it to the season of peace, joy and glad tidings to all.

Wolfgram, whose business, BenShot, sells beer mugs, wine glasses and shot glasses with BULLETS planted into their sides, says he had NO concerns about providing employees with firearms.

“We wanted to give something nice and memorable to our employees,” said Wolfgram (who could be Instagram’s evil twin for all we know). “There were two aspects for us. One was for employee safety, and the other was we wanted something that’s kind of fun and exciting.”

Fun and exciting, eh? I wonder how he’ll top this year’s employee gift when Christmas 2019 rolls around? How about:

– Sidewinder missiles

– Body armor

– Nuclear warheads?

My problem with giving guns to employees includes, but is not limited to:

– The very real possibility a disgruntled employee might use the weapon after receiving an unfavorable review, pay cut or termination.

– The very real possibility an employee brings the gun home, one of the kids stumble across it and, well, you know the rest.

– The very real possibility other pro-gun entrepreneurs will think a 9mm Glock is an awesome holiday present for their employees and play copy cat.

I respect the Second Amendment and certainly understand the passion hunters have for their “sport”, but gifting employees with handguns is akin to waving a red cape in front of a bull. It only takes one of those employees to go off the rails and create a very different type of news story for BenShot. And when that story runs the “shot” will truly hit the fan.

Nov 08

All Things Must Pass

I’ve always likened agencies to baseball managers and football coaches. We are hired to be fired.

Make no mistake. The termination clock starts ticking as soon as the letter of agreement is signed. The relationship may last a month, a year, a decade or, in the case of Ogilvy, 75 years. But it will end.

In Ogilvy’s case, the “Dear Agency” letter came from Ford when the latter decided it was time to seek a divorce from WPP (Ogilvy’s owner).

The reasons for the break-up included: “….Ford’s slumping sales, weak demand in Europe and trade tariffs with China.” Mix that toxic potion with the reality that “….clients are increasingly taking work in-house and using the giant online platforms of Google and Facebook” and you have the perfect storm for any freshly-minted CMO whose most logical first move would be to blame the incumbent agency and hire fresh thinking. It happens all the time.

Simultaneously, Ford is filling 100 new in-house global marketing positions (while Ogilvy probably laid off just as many employees who had worked on the account).

Expanding in-house marketing teams is a trend and Reuters says “….has stripped the big advertising groups of some of their income in recent years.” No question about it.

That’s why I’m so happy to be positioned as a mid-sized firm led by public relations but offering an array of strategic integrated services ranging from web design and employee engagement to societal crisis management and all forms of content creation.

The most vulnerable firms right now are in the digital and advertising spaces. That’s because those service offerings can easily be duplicated by an in-house team.

PR is a relationship-based business in which long-standing personal relationships with influencers, reporters, producers and editors are owned by individuals at the agencies. Those expansive and valuable relationships are difficult to replace.

Even if PR is slightly more strategic and less tactical than its sister disciplines, I know the clock is ticking with every single Peppercomm client (and we have terrific clients at the moment). I know the clock is ticking because I’ve experienced longstanding relationships end in a heartbeat due to:

  • A new CCO or CMO deciding they wanted their own team.
  • A major retailer deciding it made more sense to allocate the PR/social spend to upgrading their IT.
  • A clueless PR manager who believed that “….every relationship has a five-year window before things get old and tired.”

Having seen and experienced it all I totally empathize with the fine people at Ogilvy. And, I also know I need to double down on feeding the new business pipeline at my shop. What’s here today may be gone tomorrow. Or 75 years from tomorrow.

Nov 05

Ready for another walkout or two?

Get ready for another global organization to experience what went down at Google last week when employees around the world staged a walkout in protest of the company’s response to a widespread #MeToo scandal.

This time, though, I predict the spotlight will be on three of the world’s best known and most highly admired strategic management consulting firms: Booz-Allen, McKinsey and Boston Consulting Group.

That’s because The Sunday New York Times chose to devote front page coverage to the trio’s extensive (and incredibly lucrative) contracts with Crown Prince Mohammed bin Salman of Saudi Arabia, who was recently fired for his role in the murder of journalist Jamal Khashoggi.

Not only are the firms reaping ungodly amounts of money from the repressive Saudi regime but, critically, NONE withdrew from participating in last month’s Future Investment Initiative conference in Riyadh (at a time when virtually every other company, journalist and executive universally bailed in protest).

Making matters worse, the Big Three doubled down on their participation at the event:

  • McKinsey led panels on money and energy (One would think the Saudis don’t need much advice on either).
  • BCG focused on “unspecified intelligence” (Boy, does that ever sound shady).
  • Booz-Allen held meetings with representatives of Saudi’s army and navy to whom they provide counsel (I never knew white shoe consulting firms did Black Ops).

When pressed for comments, firm representatives either provided a weak, evasive response or no comment whatsoever. And therein lies the problem.

As was the case with Deloitte last month (see my blog), I don’t think the rank-and-file employees of these global powerhouses will “permit” their executives to keep padding their wallets with moola paid by sleazy, if not murderous, regimes. Employee activism has become a force to reckon with (and no longer ignored).

And if I were sitting in the corner office of Booz, BCG or McKinsey, I’d also worry about losing key clients whose corporate values and ethics won’t permit them to engage consultants with highly controversial contracts.

Now is the time for the Big Three to step up and speak out. They need to either terminate their contracts with the Saudi government or provide a very transparent reason why they will continue to bill, bill, bill.

It’s tough to walk away from billions of dollars, but more and more employees expect their organizations to possess a higher purpose and do their part to make the world a better place. They want to feel comfortable that their personal values are in alignment with their employers’ words and actions.

I hope all three consulting firms are taking this reputational crisis as seriously as they should. If they aren’t, watch for Google-like walkouts and Deloitte-like picketing.

Nov 02

Your Walkout is Coming

Today’s timely guest post is from Ann Barlow, the leader of our West Cost office and the current Board Chair for Watermark. 

Too many companies are caught by surprise when fed up people take action. It’s time for them to know where they’re vulnerable, where they need to do better, and step up.

Including Google.

In a year of so many #MeToo incidents laid bare, I wondered if I was becoming as numbed by reports of sexual harassment and discrimination as I am by the other outrageous behavior reported each day. So I was surprised, but also a little pleased when the New York Times piece and yesterday’s walkout by Google employees stirred up so much anger and frustration within me. Anger that company leaders over and over and over again look the other way when a rainmaker mistreats others. Frustration that even those companies that pledge to do better have so much trouble making real change happen.

But I also feel hope, because even beyond calling their leadership to account through yesterday’s walkout, the organizers put together a thoughtful, practical and actionable list of demands for change. The degree to which Google follows them will show just how serious it is about eradicating sexual discrimination, harassment and assault.  Nothing less will do.

As for other employers, no one should be foolish enough to assume that their environment is a place where women – and all employees — feel safe and equal because they espouse values, promote employee resource groups and win workplace awards. Unless employers dig in deep to truly listen to employees and understand their daily experiences, AND have the fortitude to toss out even the most powerful, their walkout is coming.

And it may not be just employees who walk away. People on both sides of ‘take a knee,’ gun control, transgender rights – and #MeToo – have shown a willingness to vote with their voices and their wallets.

What about your brand? Is your walkout coming?

 

Nov 02

Work Hard, Play Hard, Vote Hard

Today’s guest blog comes from our two U.S. office leads, Jackie Kolek of New York and Ann Barlow of San Francisco, ahead of next Tuesday’s election day. Go vote!

Peppercomm has always fostered a work hard, play hard culture.  We are constantly looking around the corner to see what’s next, creating new solutions and capabilities to prepare our clients for the new world of social activism and enabling them to address these challenges head-on and leverage the opportunities.

On November 6th we’ll temporarily put aside our relentless dedication to client service and put our employee’s civic duty at the top of our to-do lists.  While the past two years have delivered a seemingly never-ending cycle of negative news, personal attacks and arguing across party (and sometimes family and friend) lines, the upside has been the growing passion about, and attention to, the critical issues that matter to us as Americans and individuals. This Election Day we want to ensure our employees can exercise their right to have their voices heard and encourage them to do just that.  We’ve designated Election Day as a “Flex Day,” which means employees can work from anywhere, come in late, leave early, extend their lunch, or make any arrangement they need to make voting as easy as possible.  We’ve also marked it a “meeting-free day,” rescheduling all internal meetings to free up more time.  Since not all states make it as easy as it should be to vote, and we know some employees will face long lines or challenges voting by mail, it is our duty as an employer to help our team exercise their right to vote – regardless of the challenges.

In addition to ensuring our employees can vote, we want make sure we encourage them to vote and celebrate them for doing so.  We value diversity within our firm (our executive leadership team is 80 percent female) and believe that diversity can take place in many forms, including diversity of thought and values.  Therefore, we urge our employees to make their individual voices count on Election Day. We’re asking each of our team members to snap a selfie of themselves with their “I voted” sticker.  To celebrate these voices being heard, we’ll be hosting a free lunch for employees later in the week where employees will use their “I voted” sticker as their entry ticket (and in the spirit of inclusiveness, our non-US citizen employees get in for free).

Oct 22

The Last Laugh

One of the things that sets Peppercomm apart is our embedding stand-up and improvisational comedy training into our management development programs.

There isn’t another firm I know of that has embraced comedy to the extent we have.

The benefits have been enormous and range from improving employees’ presentation skills, to knocking down silos and bringing our people together in new and unique ways. Another benefit is having been named NYC’s top workplace by Crain’s New York Business.

We’ve also tied-in comedy to raise money for a whole host of charities over the years. And, in those fundraisers, the Peppercomm employees have performed five-minute sets at major NYC comedy clubs. How many professionals in our industry can add that accomplishment to their C.V.’s?

It’s a beautiful thing, especially when you can hold a charity comedy fundraiser in honor of a fallen comrade.

That’s exactly what we did last Thursday night.

As many of you know, Dandy Stevenson, my longtime executive assistant, lost her battle with lung cancer in August. See my tribute to Dandy here.

Her family asked that any donations in Dandy’s memory be made to the ASPCA.

So, what did we at Peppercomm do? We took it to the next level and staged a Dandy Stevenson Memorial Comedy Show, invited four or five ASPCA executives to perform with our troops AND ended up raising more than $1,500 in Dandy’s name. Oh, and btw, we had a blast doing it.

Before I continue, I’d appreciate any, and all, friends of Dandy who have not yet done so, to make a donation to the ASPCA in her name. Here’s the link.

If you’d like to get a sneak peek at what the experience was like, click on this link and check out our very own Deb Brown impersonating Donald Trump. It’s great. The greatest ever. Beyond great. And if you don’t like it, it’s not Deb’s fault. Blame the Democrats.

Other firms might remember a fallen comrade with a one-off luncheon or a cocktail reception. Not us. We do it the right way. We raise money for our late colleague’s favorite charity, enlist our own employees to perform stand-up and turn what could have been a wake into a laugh out loud tribute to a woman who laughed out loud more often and far louder than anyone I’ve ever known.

Dandy: We miss you and will never forget you. Hope you enjoyed watching the show from whatever celestial cloud you may be currently inhabiting.

Oct 11

Did you hear the one about the executive assistant we’ll never forget?

The Peppercomm team will be coming together next Thursday night to salute our late, great colleague, Dandy Stevenson. We’ll be holding one of our patented stand-up and improvisational comedy fundraisers in her name. All proceeds will be donated directly to the ASPCA (like me, Dandy had a soft spot for four-legged creatures).

This blogger will be serving as emcee, and seven or eight current and former Peppercommers will be performing seven to eight minute sets. We’ll also be joined by sereval professional comedians as well as Peppercomm’s Chief Comedy Officer Clayton Fletcher.

Having held countless fundraisers in the past I must tell you this one will be very special indeed. I hope you (and your BFFs) can be there to experience it with us.

For information, how to purchase tickets and to reserve your seat, visit the event page here.