A Time to Sell, to Buy Back, or Neither?

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About once a month, I read about one PR firm after another buying itself back from an acquirer.  The latest is Brodeur buying itself back from Omnicom.  A few weeks back, MWW bought itself back from IPG.

What’s behind all of this? I know my friend Rick Gould makes a number of compelling arguments about selling one’s firm, but, in order to convince me, I’d need to meet an agency principal who’s happy they sold several years later.

I know that doesn’t mean they don’t exist, but its hard to envision retaining your culture and approach if someone else is controlling the purse strings.

I’m aware of firms such as MDC Partners that take a slight majority position and let the agency principals “keep doing what they’re doing.”   Count me among the skeptical.

One of the things that motivated me to start my own firm was being able to get out from under people who told me what I could and couldn’t do.  If you sell your firm (or even a minority stake), you’re undoubtedly giving (at least some of) that up.

I try “never to say never,” but as long as I still see a long flight plan ahead and can continue to use ongoing cash flow and, if necessary, a line of credit to fund and grow my business, flying solo is the way to go — at least for me.

Labor Pains — Are Private Union Tactics Becoming More Extreme?

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While much of the country’s attention has been focused on Wisconsin, Indiana and New Jersey’s attempts to rein in pensions and other benefits afforded public union members, the activities of private unions and their attempts to reverse their decades-long decline in membership continues.

Those of us who make our livings helping companies communicate with their unionized and/or hourly employees are well versed in union tactics and methods.  But, occasionally, we get an unusually-deep view of some of their thinking.

A presentation this past weekend by a former SEIU official is particularly illustrative.  In it, Stephen Lerner talks about causing a stock market crash, bringing JP Morgan to its knees and redistributing wealth.

Shocking, to be sure, but with the economic turmoil of the past few years, this could resonate with some — even many — members of the public, including your employees.

Yes, he’s no longer affiliated with the SEIU, but this kind of thinking, statement and approach (rallies, civil disobedience, attempts to embarrass and vilify corporate leaders) can be seen in many of the unions’ “corporate campaign” rhetoric — except in this case, they’re certainly being taken to an extreme.

What’s the lesson here for corporate leaders?  If you have a large hourly workforce that’s non-union, it’s a good idea to take a look at the areas of vulnerability that unions exploit – pay, benefits, working conditions, how people get hired and promoted, how employees with seniority are treated, etc.

If you already have a union on the property, whether you are in the midst of a contract negotiation or that’s years away, it makes sense to look at productivity, absenteeism, safety, etc.

And, whether you’re union or non-union, it’s always a good idea to use employee communications to reinforce the compact and benefits your company offers — and give your employees an opportunity to share their views and opinions.

Either that — or you might end up thinking a governor’s job is easy by comparison.

Beware the Corporate Sting

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A great deal of attention has focused recently on the hidden camera video of executives from ACORN and Planned Parenthood saying, well, things they’d rather not be caught on hidden camera saying.  In addition, a blogger recently pretended to be David Koch, the billionaire businessman, and called Wisconsin Governor Scott Walker during the protracted legislative battle over collective bargaining for public unions.

It’s not just politicians and activist groups that should view these developments as cautionary tales.  Any public-facing company concerned about corporate reputation management should take these lessons to heart.

What would stop someone from walking into, say, a bank branch, investment company, hotel,  homebuilder, food retailer or other business and find a way to “trap” the company’s employees into saying something illegal, unethical or troubling.  It’s not just the likes of “Dateline NBC” or ABC’s “What Would You Do?” who can use a hidden camera and a website.

Who would do this?  A plaintiff’s attorney looking to gather data for a potential class action or to provoke a quick settlement; a union seeking support or probing a company’s weaknesses; an activist group looking to energize an existing campaign; a disgruntled former employee or customer; even an unethical competitor.  The list is nearly endless.

So what’s a company to do?  First, before something like this happens to you, take a look at your company’s products, services and approach to customer interaction.  Would everything pass the “smell” test?  Are there some things you do or sell today that, regardless of how profitable they are, should be eliminated or phased out before your company comes into such scrutiny?  Are you getting a lot of customer complaints directly or are people venting about your company on social media? It’s much easier (and “cleaner”) to do away with these things before it appears you’re being “forced” to do so.

Next, you should focus on effective employee communications and training.  How much does your company focus on ethics and ethical behavior?   Is there a communications channel to allow employees to surface concerns to management?  Are you monitoring what’s being said about your company on social media?  Some enlightened companies use “secret shoppers” to ensure — and test — the consumers’ experience is what the company intends.

The lesson here, as is often the case, is not to wait until a problem occurs before you plan for it to happen.  Or just wait until Phil in your Des Moines office is the latest star of YouTube.

Northwestern’s Lesson on Crisis Management

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You have to feel badly for Northwestern University.  They have a richly-deserved history for academic excellence, a resurgent football program, and even an improved reputation as a neighbor in our shared city of Evanston.

But, given their mishandling of the recent scandal involving a  live “demonstration” following a Human Sexuality class, they should probably cancel their curriculum on crisis management.

With a lot of tenured faculty on campus, and the attendant academic freedom, there’s probably a lot of things that go on in the name of education that might not stand up well to broad (outside) scrutiny.  Maybe that’s why the University’s spokesman said the following about the demonstration:

“Northwestern University faculty members engage in teaching and research on a wide variety of topics, some of them controversial and at the leading edge of their respective disciplines. The university supports the efforts of its faculty to further the advancement of knowledge.”

If the University had even a small sense of the outrage that was bound to ensue, they probably wouldn’t have gone with such a staunch defense of such a questionable display.

If they had simply made a statement indicating “concern” and promising an “investigation” as their first response, it might have tamped down the outrage.

But, instead, they waited a day and then let their president express his displeasure.  That effectively served to turn what could have been a one-day, largely local news story into one that is now in its third day – and showing few signs of abating.

The lesson here is: first responses count.  A lot.  And, when in doubt, assume that people will take offense and, be darn sure that something like this is worth defending.

A similar, recent case involved Amazon.com defending its sale of books promoting pedophilia.  Is that really something you want to defend?

 
 
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