Jul 09

McKinsey & The Mob

How’s that for a headline? Did it stop you in your tracks? Good. That’s the job of any writer, no matter how mediocre.

Now, allow me to explain why I linked these strange bedfellows in the same headline.

Kevin Sneader, the “newly appointed” CEO of McKinsey, the most respected, management consulting firm in  the world, will be in Johannesburg, South Africa, today to apologize for his outfit’s shameful behavior.

You can read the gist of it in the embedded link but, in essence, McKinsey knowingly got in bed with unscrupulous characters who had direct ties to the country’s corrupt government and bled the South African coffers dry with obscenely high fees.

Why did McKinsey knowingly hike its fees to stratospheric levels?

The semi-apologetic CEO explained it away as a relatively new office management wanting to establish a thriving practice in the shortest amount of time. So I guess their thinking was: Let’s bill the hell out of the South Africans. They’ll never know, and we’ll earn huge bonuses from the guys back in the home office.

Now, back to Sneader, who was named CEO in February and is FINALLY getting around to apologizing today, July 9. Talk about a day late and a dollar short. This is more akin to 150 days late and about $50 million short.

So where’s the connection between McKinsey & the Mob? It’s fundamental (minus the fun):

1) McKinsey saw corrupt South African pigeons as being ripe for the plucking (that’s La Cosa Nostra-speak, btw). So in the EXACT same way the Mob offers “protection services” for small merchants and shakes them down for exorbitant fees, McKinsey bled South Africa dry.

2) The New York Times ran a lengthy expose on McKinsey’s wrongdoings last week. Trust me, the two things McKinsey and the Mob do NOT want is high-profile publicity that will damage their business models.

So in McKinsey’s case, the heads of the South African office were fired (although the firm continues to deny any illegal deeds), the CEO issues his apology today and will no doubt speak broadly about new policies and procedures put in place to assure no such price-gouging EVER occurs again (and then hope the whole sordid affair will disappear in another news cycle or two).

The Mob, meanwhile, takes a number of slightly different approaches to solve their high-level and, unwanted, publicity problems: They whack the egomaniacal dons a la Bugsy Siegel, Carlos Gambino, Sam Giancana and Carmine Galante.

Whatever option they choose, McKinsey & the Mob always ensure they quickly recede back into the shadowy, murky worlds of high finance and racketeering (which some might say are one and the the same) and immediately revert to rewarding their highest earners (thereby setting the stage for a future crisis or the rise of another flamboyant publicity hound).

I don’t expect The Mob to know any better. They’ve been born and bred into a world of violence.

But if I were McKinsey’s chief human resources officer, I’d worry about the loss of key partners. And if I were McKinsey’s chief communications officer, I never would have allowed my CEO to wait for a major Times expose before apologizing. Finally, if I were Kevin Sneader, I’d be paying personal visits to the firm’s largest clients to ensure them this sort of behavior will never happen again on his watch.

 

Jun 27

The prototypical CEO of the Future

Delta CEO Ed Bastian is a man I would follow into battle. Why? Because he has the courage of his convictions.

He stands up, speaks out and says what’s needed to be said in the aftermath of one of our all-too-frequent societal crises.

And, as he told Fortune CEO Daily, he does so WITHOUT his board’s prior approval. I’d like to believe that if Ernest Hemingway were alive today he’d define Bastian’s decisiveness as “grace under pressure.”

To jog the uninformed reader’s memory, I will remind you that Bastian’s comments came after he had discontinued passenger discounts to NRA members in the aftermath of the horrible Parkland, Florida, Middle School mass shooting.

When the fine folks who comprise the Georgia State Legislature heard about Bastian’s decision, they immediately threatened to yank a $40 million tax break for the Atlanta-headquartered airline. Bastian immediately responded with the now memorable words, “Delta’s values are not for sale.” That’s positively Nathan Hale-like.

And, I’d like to believe Bastion isn’t a lone wolf; rather, I believe he’s the prototypical CEO of the future.

That’s because he is one of an increasing number of CEOs who have discovered a spine and a voice in these divisive times of ours.

So, when the president responds to the shooting by saying, “We’ve got to do something” then chides GOP Congressional members for being afraid of the NRA, but immediately changes the subject and moves on to something new, we’re left with business and industry executives to fill the leadership vacuum (and remind us of the moral and ethical code upon which this country was built). And, that’s just what Bastian did.

Others have as well. But, many more need to lose the “This, too, shall pass” mentality. Because it won’t.

And, their silence will most assuredly come back to haunt them with Millennial customers and employees who are increasingly demanding employers not only state their higher purpose for existing, but are led by CEOs willing to put a stake in the ground.

These are perilous times for our democracy, and every American worker deserves the right to know exactly what type of organization they’ve joined. Delta’s employees sure do. Do yours?

May 30

Lowering the Barr

Today’s guest post is brought to you by Deb Brown, Partner and Managing Director at Peppercomm.  

Kudos to ABC and Disney for taking a courageous stand against the star and executive producer of its highest rated show “Roseanne,” canceling the series due to an outrageous racist tweet from Roseanne Barr yesterday. The highly insensitive tweet was an attack on Valerie Jarrett, a former senior advisor to President Barack Obama.

Although Barr apologized, others involved in the show and ABC still did the right thing and distanced themselves from Barr, underscoring that apologies are just not enough. Some words have serious consequences and hollow apologies just don’t cut it. ABC Entertainment president Channing Dungy was quoted as saying, “Roseanne’s Twitter statement is abhorrent, repugnant and inconsistent with our values, and we have decided to cancel her show.”

Inconsistent with our values. Four powerful words that speak volumes.

Recently, Peppercomm and the Institute for Public Relations interviewed 50 different CCOs/CMOs to ask them about the new normal we now live in, the frequent societal crises they now face, and whether or not they have a purpose that guides them in making tough decisions, such as taking a stand for or against an issue. The study, which is the third in the series, is called Taking a Stand: How CMOs and CCOs are Redefining Their Roles in Today’s Highly Charged Social, Cultural and Political Climate,” and is being released today. And born from the study is a new service offering from Peppercomm that helps corporations prepare for and handle a societal crisis as well as develop its purpose, if needed.

Roseanne became her own societal crisis, lowering the Barr even further on horrific tweets. ABC and Disney, on the other hand, are the latest corporations that continue to raise the bar on doing the right thing, speaking up and taking a stand.

May 21

Spot On

Richard Edelman’s Linkedin essay posits powerful and accurate views on the rapidly emerging role of the chief communications officer AND her/his PR counselors in this new, dark era of school shootings, a president who changes his mind more often than the wind shifts direction in Chicago and the disturbing rise of fake news or, False News, as we board members of The Institute for Public Relations (IPR) prefer to call it.

Peppercomm and the IPR are about to release the results of our third, in-depth series of interviews with 25 Fortune 500 CCOs and a smattering of senior marketing executives who direct crisis response for their organizations.

The vast majority have already created, or are in the process of developing brand new “societal” crisis plans that anticipate future events, develop responses pre-approved by the CEO, CHRO and CLO, and scenario plan the expectations and reactions of a public comment from their CEO by everyone from an activist board member and colossal customer to employees and local communities in which the organization maintains a presence.

The corporate communications function is uniquely qualified (and prepared) to guide the C-Suite through the uncharted waters of a highly-divisive, and hugely uncertain, global environment.

It’s no longer acceptable for CEO’s to mimic an ostrich, listen to a lawyer’s advice or hope that, this, too, shall pass. Just ask Kasper Rorsted, the CEO of Adidas, who badly bungled his responses to Kanye West’s lamentable statements about slavery.

I have huge admiration for our peers in digital, data analytics, advertising and other marketing disciples but we, in PR, have ALWAYS fulfilled the role of the corporation’s conscience.

And, the need for smart, carefully-crafted, ethically and morally responsible commentary has never been more important. No offense intended, but marketing types simply don’t possess the DNA to lead the charge.

It’s a great time to be a strategic PR counselor. And, here’s my version of a Richard Edelman plug: Keep your eyes peeled for sneak previews of our CCO research in the days to come.

May 09

Bad Advice

I just returned from the superb PRSA Counselors Academy’s Spring Conference, a MUST attend for ANY PR entrepreneur.

I had the privilege to address the 200 or so attendees on the subject of Fake News which, as my three faithful Repman readers will recall, I addressed in a previous blog.

Anyway, one of the attendees provided the single worst piece of advice re: responding to a Trump attack Tweet I’ve yet to hear.

An obvious POTUS supporter, this particular counselor had the following advice for ANY corporation that finds itself on the receiving end of a mean-spirited, factually incorrect Trump Tweet:

“Love him or hate him, he’s the president. And, what’s the one thing he adores more than anything else? A person or organization that praises one of his initiatives. So, forget about the attack and, instead, find something your organization is doing that aligns with Trump’s agenda and Tweet about that. Guarantee he will love it, re-Tweet it and you’ll gain millions of new followers.”

Wow. That is so far beyond wrong that it redefines the word.

The right way to respond to a Trump attack (which we verified with 25 CCOs in our soon-to-be-released, co-branded research report with IPR) is to gather the facts, reach out to a trusted reporter and allow him or her to publish a balanced article.

That’s exactly what Nordstrom’s did when Trump attacked them for dumping Ivanka’s fashion line.

Nordstrom’s shared their business policy with a trusted reporter who said, in effect, that Nordstrom’s had the right to discontinue any underperforming SKU. And Ivanka’s sales were dismal (despite KellyAnne Conway’s attempt to endorse them on Fox & Friends).

Any corporation that has created its higher purpose should use that purpose to guide its response to any sort of Trump attack or societal crisis.

You should NOT attempt to find something you’re doing that Trump will like. You should follow the lead of Ed Bastian, Delta’s CEO who, in the aftermath of the Parkland High School shootings, severed all ties with the NRA.

When the state of Georgia took away a significant sales tax exemption from Delta, its CEO stood his ground. In a memo to employees, he wrote the now famous rallying cry for taking a stand: Our values are not for sale.

That, my friends, is how best-in-class organizations respond to a Trump attack or societal crisis. They use their corporate purpose as the North Star and leverage it to guide their messaging.

May 07

The Sounds of Silence

I must say I was surprised, and disappointed, to read that Adidas CEO Kasper Rorsted felt a bit aggravated last week when asked to comment on Pop Star Kanye West’s highly controversial comments about slavery.

To refresh your memory, West Tweeted the following, “When you hear about slavery for 400 years…for 400 years…. that sounds like a choice.”

It was at that moment the Adidas CEO had a very clear choice as to whether to stand up, speak out and, if not condemn West’s comments, to at least say they didn’t reflect the views or corporate purpose of his company.

Instead, he sounded quite miffed when was quoted as having said: “I’m not going to comment on every comment he (meaning West) or somebody else makes.”

Well, in Kanye’s case, he is most certainly NOT just somebody else when it comes to Adidas. He is both a paid designer and brand ambassador.

Rorsted’s non-comment was, in fact, a very strong comment. It told me, and millions of others, that an incendiary, racist statement made by a representative of his company is acceptable. And, that’s unacceptable.

I don’t wear Adidas sneakers, so I can’t boycott the brand, but I’d be willing to bet my treasured Asics running shoes that many people have or will boycott Adidas as much for West’s hateful statement as for Rorsted’s tacit endorsement (that’s how I read silence). Consumers are currently signing a petition for Adidas to drop the rapper.

Long ago and far away, then-BP CEO Tony Hayward was absolutely eviscerated by media everywhere when, after visiting the site of the massive oil spill his company had caused in the Gulf of Mexico, Hayward said, “I’d like my life back.”

Brutal comment. Just brutal. And the subsequent outrage would end up costing the BP CEO his job.

I doubt Rorsted will lose his job, but his refusal to comment in a time of crisis will most assuredly cost him sales and employees, while stepping all over the brand’s image and reputation.

To paraphrase Thomas Paine, “These are the days that try men’s (and women’s) souls.” These are also the days when it’s no longer acceptable for CEOs to remain silent.

Shame on you, Mr. Rorsted, for not standing up and doing the right thing. It may not end your career, but it will forever tarnish it.

Note: I will be addressing societal crises, fake news and the pressing need for CEOs everywhere to stand up, speak out and double down on their organization’s corporate purpose at the PRSA Counselors Academy’s Spring Conference later today.

Silence is no longer golden, especially in the aftermath of a societal crisis such as a mass shooting, a controversial piece of legislation such as tariffs or an incendiary statement uttered by a high-profile figure.

Silence is shameful.

Apr 30

If you like me, you’ll be more willing to believe my outright lie just might happen at some point in the future

A fascinating new study undertaken by an associate professor of organizational behavior at the London Business School has shed new light on why the Trump base simply doesn’t care about his documented lying.

Regardless of your political views, it’s a fascinating, new look at the fake news being disseminated by the West Wing.

In short, the research shows that, for example, Trump’s inauguration did NOT come remotely close to attracting the largest crowd ever. Regardless, the base  were more than content to believe KellyAnne Conway’s comment that it WOULD have been the best attended inauguration if inclement weather hadn’t interfered.

That’s balderdash but, in the minds of the base, it COULD be true. As a result, they give The White House a pass on what Ms. Conway likes to call “alternative facts.”

Check out the article. It explains the phenomenon in far greater detail and makes for a fascinating read: read here.

Two other quick plugs: one for me and one for the Museum of Public Relations:

1.) I have the honor of participating in a panel at the upcoming PRSA Counselors Academy’s Spring Conference. The subject: “Best practices for dealing with fake news.”

2.) Separately, the Museum of Public Relations will be hosting a very interesting discussion on the same subject, entitled: “Truth Decay.”

A distinguished panel that includes two of my BFFs, Pat Ford of Burson Cohn & Wolfe and Tina McCorkindale, president of the Institute for Public Relations, will be addressing the findings of a new report issued by the RAND Corporation.

I will attend and I hope you do as well. As far as my remarks at the Spring Conference, I’m hopeful the attendees will believe what I have to say if for no other reason than they like me. 😎

Apr 17

Neither Jail Time, Stiff Fines Nor a One-Way Ticket to Mars will Stop Silicon Valley Leakers from Leaking

Ever read something and experience an immediate flashback to another period in your life? No? Well, I just did.

And this is the article that triggered my business version of PTSD. It’s a piece from CNN.com reporting that Apple’s senior management has threatened dire consequences to ANY employee who is caught leaking internal information.

Unfortunately the threatening memo was, well, leaked to CNN.

And, here’s the personal flashback it triggered.

Along with my Peppercomm peers, I enjoyed a front-row seat as the newly-minted CEO of the now moribund Yahoo addressed a worldwide audience of employees. She was there to deliver her state-of-the-company address.

By way of quick background, Yahoo had been plagued by internal civil wars that were being played out daily in Silicon Valley rags thanks to, you guessed it, workers leaking sensitive information.

Back to the CEO and her inaugural address. After acknowledging the thunderous applause from hopeful employees who were desperately praying this latest CEO could right the good ship Yahoo and return the tech dinosaur to its glory days, she barked out the following message:

“Let me begin by addressing the leaks. The leaks will stop immediately. Do you know why? Because if I ever catch one of you leaking a confidential memo to Kara Swisher or any other reporter, I will personally drop-kick your sorry ass to Mars! Got it?”

She then proceeded to share her strategic vision for fixing the foundering has-been and then invited questions from the audience.

A meek, mild engineering type stood and asked, “Since some of us like me have cultivated relationships with reporters who cover the highly technical aspects of our products, is it still OK if I speak with those types of reporters?”

If looks could kill, that poor engineer would be pushing up daisies as we speak.

She glared at the unassuming engineer and screamed, “Are you a complete moron? Were you not listening to what I just said? Leak one word or one sentence and you will be a dead man walking. Got it?”

Based upon the deafening silence, the whole room (and worldwide viewing audience) GOT it.

Alas, the leaks continued. She was fired after less than a year and replaced by the equally inept Marissa Meyer, whose first official act was to terminate thousands of Yahoo flex-time workers while building a state-of-the-art child care center adjacent to her office at corporate headquarters. In other words, she could bring her kiddies to work (but the moms, dads, caregivers who tried doing the same from their homes and apartments were given the heave-ho). Very deft touch, no?

I am in no way equating Apple’s future with the demise of Yahoo, but I will say that when management feels the need to threaten leakers with jail time, a company’s best years may very well be in the past.

Mar 27

Sometimes smarter is better than lighter (or stupidity)

Just when I thought yet another tone-deaf advertising agency creative or in-house marketing executive couldn’t possibly produce yet another insensitive, racially-charged TV spot, along comes Heineken to prove me wrong.

If you haven’t seen “Lighter is better” and, odds are you won’t since Heineken yanked it off the air almost immediately, take a gander: Heineken pulls ‘Sometimes lighter is better’ ad after racism claims

Now, take a guess who was morally outraged by the commercial? Bingo! People of color.

Why? Well, because the white bartender in the spot takes careful aim and hurtles a Heineken bottle of beer underneath, around and past bar patrons of color before it reaches its final destination: the hand of an attractive light skinned woman.

These are the types of unexplainable and egregious gaffes that, in 30 seconds, can undo years of community goodwill, corporate social responsibility AND the morale of an entire workforce. Then of course, there will be boycotts from patrons of liquor stores and food markets who will no longer buy Heineken beer at all.

God knows what the eventual impact from a financial and reputational standpoint will be, but I’m betting the internal marketing team was either put on 30-days notice or asked to leave the building faster than a speeding bottle of Heineken.

As far as the ad agency creatives, all I can say is, “Let’s lift a bottle of beer (other than Heineken) in their memory.” The next gig for the entire team will probably be washing dishes in the bar where the commercial was filmed.

Btw, on a related note, I will be joined by JP Laqueur of Brand Foundations on a PRSA webinar at 3pm today to discuss the new types of societal crises facing corporate America (as well as self-inflicted wounds such as Heineken’s).

Here’s the link to today’s webinar: http://apps.prsa.org/Learning/Calendar/display/9155/Reputation_Management_in_a_Polarized_Age#.WrpLY4jwaUn

Mar 14

United Airlines Continues to Be Dogged by Self-Inflicted Image Problems. But Do We Care?

Today’s guest blog was penned by Peppercomm’s Ann Barlow who weighs in a yet another atrocious crisis courtesy of the airline with the least friendly skies imaginable….

On Tuesday, we learned about the poor dog that died onboard one United flight when it was consigned to the overhead bin, and then the next day about another that went to Japan instead of Kansas (anyone could make that mistake). Like many of you, we at Peppercomm shook our heads at the level of callousness that CEO Oscar Munoz seems content to foster, and wondered at the tatters that United’s reputation has been left in following yet another set of senseless actions.

Then my colleague Matt Purdue asked the question: Does it really matter? He pointed out that United’s stock has not suffered despite all of the well-publicized treatment the airline has visited on its paying passengers. And, maybe worse, when we spot a $30 savings on Kayak with United over another carrier, how many of us blithely put our principles aside to save a few bucks?

The notion that bad behavior comes with no consequences horrifies me. Are we really in an age where we are so weary of, so numbed by, people treating one another with such contempt or compromising any ethics in the name of financial gain, that we shake our heads and move on? My colleagues and friends talk about feeling angry but frustrated by a sense of powerless to do anything. Understandable to be sure. For me, it’s more that stories of scandals and misconduct are coming at us so rapidly that it’s hard to remember who’s done what, when.

But I have hope. At Peppercomm, we’ve actually created an updated version of our crisis program because like never before, employees are calling on their company leadership to take a stand on the day’s most important issues. No longer are they content to let their employers remain neutral on things like DACA and #MeToo and gun control and the environment. And no longer are they willing to stand by and watch their leadership consistently put profit above principles. Like never before, companies will need to operate with purpose and walk away from actions and policies that don’t fit that purpose.

Matt is probably right in the short term. But based on what we are seeing, not only at Peppercomm but on social media and on our streets, as weary and busy as people are, we are only willing to take so much.

Mr. Munoz, perhaps you’re safe for now. But sooner or later, your employees and your customers are going to say: enough.