Every so often I get asked about what it’s like to found and own a PR firm and how it differs from my years working for large multinational corporations and PR firms.  Well, on the occasion of our firm’s 10^th anniversary, here are a few observations:

• Faster decision making.  At the big PR firms, we had to respond to nearly every RFP that came through the door.  We couldn’t argue that we didn’t have a specific capability or didn’t have a legitimate “shot.”  After all, RFPs were (and are) the source of most of big agency new business.  As a boutique firm, we don’t receive a large volume of RFPs.  When we do, we quickly dismiss the ones we don’t feel we have at least a 75-80% chance of winning.  Otherwise, too much time is wasted responding to them.  We’d rather spend it serving our clients or creating our own new business opportunities. We’re also able to make decisions a lot more quickly about clients we’ll agree to serve and people we’ll decide to hire.  No “checking with New York.”  If we want to do something, after considering it thoughtfully, we just do it.
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  Nick Kalm, Jane Devron and Megan Hakes started Reputation Partners in 2002.

  Talent that’s equal or better.  In my 29 years in this business on the client and agency side, I’ve been privileged to work with and learn from a lot of talented people.  I’m struck by the fact that the kinds of people we’re able to attract to our firm are as good as and often even better than the caliber of talent I worked with previously.  And there’s a little something “extra” in finding an employee who’s more attracted by the quality of the opportunity rather than the “prestige” of a big company/PR firm name.

• No “dead weight.”  One of the unfortunate realities of many large employers is the fact that not everyone pulls their weight.  Given the economic downturn, this happens less than it used to, but it still occurs.  “Why are they there?” or “What are they doing?” are two refrains we never hear at Reputation Partners.  Here, we make sure everyone is productive; everybody’s working.
• Great, big clients.  When we left the world of big agencies, some speculated that we might be too small to serve some of the biggest companies in the world.  Given that our first three clients were FedEx, GE and IBM, that notion was quickly put to rest.  In the ten years since, we’ve worked with numerous blue chip companies.  But, we’ve also worked with many smaller and mid-sized organizations – and have done some of our most interesting work for them.
• Financial controls equal better results.  Running a PR firm well from a financial standpoint really isn’t hard.  Budget engagements appropriately.  Don’t overservice.  Get written agreements from clients before starting work and at every step.  Follow-up and collect on past due receivables.  Don’t allow one client to become too big a percentage of your business.  Having seen what to do and not do at the big shops, it was relatively easy to set Reputation Partners on a better path.

So, do I have any regrets?  Well, as the old song goes, I’ve had a few.  But, ten years in, I’m as ready for the next ten as I was for the first.  Being an entrepreneur, having a great team, and the opportunities I see ahead are what get me up at 5:00 a.m. every day.

What motivates you?

Despite years of declining membership and some very public drubbings, the union movement continues to show signs of life. The currently-unfolding Chicago Teachers Union (CTU) strike is the most recent example.

There are a few important labor communications lessons from the current CTU labor dispute and my own experience in providing counsel regarding labor union communications:

• Strike votes are usually symbolic. But, as the parents of nearly 400,000 Chicago students now painfully know, strikes do occur. The first thing the Chicago Public Schools (CPS) Board could have done was show the union (and public) they were ready, willing and able to operate completely without their members. In a very public way, run ads to spread the word that you’re lining up replacement workers, all while urging the striking employees not to strike/return to work. With unemployment hovering above 8 percent for years, plenty of people would jump at the chance. This was common (and effective) practice in the New York area when teacher strikes were frequent as well as in numerous private sector settings.
• Chicago Public Schools Board President David Vitale was quoted as saying the Board agreed not to negotiate through the media. That’s another missed opportunity. If you have a union workforce whose absence is going to affect lots of customers, suppliers or the community, you better make sure your key audiences know what’s at stake and why the strike is occurring – before it happens. A scan of my Facebook and Twitter feeds and media comments show many people seem confused by the CTU strike. The CPS Board could have clearly defined what they had put into their various offers, thereby forcing the CTU to explain what the issues are that are “forcing” them to strike.
• Union/management conflicts are, by definition, a battle for “hearts and minds.” Management needs to do the best job possible of showing the bargaining unit, salaried employees and others not only the logic of what they’re doing, but the emotional reasons for doing so.  “Hearts and minds” are what unions “do” beautifully. Management needs to embrace this as well.

The Chicago Teachers Union Strike in Downtown Chicago

It’s not too late for CPS management to consider some of these steps, as thousands of parents are counting on this strike to be over soon. But, if you work at an organization with unionized employees, you’d be wise to consider these and other steps before your own contracts expire.

On a Chicago stage, where the current production is “Enron,” the company’s Board of Directors are portrayed as three blind mice.  Certainly, the Enron Board’s epic failure is well documented, but more recent failures by various organization’s Boards of Directors (from Olympus to HP to Penn State to the Susan G. Komen Foundation) reveal an ongoing Achilles’ Heel that goes way beyond effective corporate governance.

Over my career, I’ve worked with countless CEOs — many of whom have correctly involved their Boards of Directors on matters of strategic importance.  And, to be sure, when large organizations face serious reputational issues, they often involve in-house corporate communications people and bring in external PR counsel.

But, I think a strong argument can be made that many serious issues could have been avoided or mitigated at the Board level before they rose to a crisis.  Corporate communications people have their fingers on the public’s pulse, so we can and do anticipate issues well and provide valuable insights into taking advantage of market opportunities.  The problem is: very few company Boards of Directors include executives with corporate communications backgrounds or expertise. This is a surprising and noteworthy omission.

Certainly, Boards benefit from the presence of executives with diverse corporate, financial and academic backgrounds.  And, many executives have solid instincts and experience dealing with communications/perception issues.  But, few of them are experienced in and attuned to identifying and addressing public perception issues at the early stages — when they are invariably easier and less costly to fix.

It’s difficult to find any public companies with communications executives currently on their boards of trustees (Yum Brands is a notable exception, but one wonders how active its board was in its Taco Bell subsidiary’s 2011 bruising battle with the plaintiffs’ bar).   Notably, among CEOs, only two — Brian Tierney (of Philadelphia Media Holdings) and David D’Alessandro (of John Hancock Financial Services) — immediately come to mind as having a PR background (vs. overseeing PR).

Would a PR person on HP’s Board have encouraged a more disciplined and thoughtful approach to  selecting CEO Mark Hurd’s successor?  Likewise, if a communications professional were on the Board at Olympus, what would they have recommended when’ CEO Michael Woodford asked the Board to investigate a series of acquisitions led by the company’s chairman?  Finally, though they eventually brought in outside PR counsel, how different would the recent fiascoes with Penn State and others have turned out if they’d had PR at the decision-making table?  I guess we’ll never know, but there are thousands of companies out there who would be advised to think more broadly when filling their next open Board seat.

There’s a story rocketing around the PR agency world this week about a PR firm that finds itself in a very ugly and avoidable fight with a prominent blogger. (NSFW) It’s a great and timeless cautionary tale.

There’s an old saying about not picking a fight with someone who buys ink by the barrel.  Of course, this is meant to suggest caution about doing battle with a member of the media.

But with most newspapers, radio and TV news in decline, along with the rapid ascent of bloggers, I think the saying should be updated to the headline of this post.

In this case, the PR firm sent a pitch to a blogger who didn’t care to receive it.  Blogger said so (in typical blogger way) and got a snarky reply from the pitcher at the PR firm.  Blogger (who, by the way, had over 160,000 followers — compare that to the readership of your average daily newspaper!) sent back another typical blogger reply (a bit flip and edgy).

This was followed by a foolish “reply all” from the PR firm (that included said blogger).  Well, after this bonehead maneuver (which nearly anyone could have done), the blogger apparently gave the PR firm VP a chance to walk his NSFW comment back, but, no, instead, he decided to double down on snark.

And, gee, what do you think the blogger decided to do about this whole exchange?  Publish it!

Sigh….

Setting aside how this reflects on the whole PR agency world, it was just plain dumb to think that this firm could do (inept) battle with a blogger and come out a winner.

So, what are the lessons here:

Lesson #1 — Treat respectable bloggers (especially those with six-figures worth of followers!) with at least as much respect as you’d treat a reporter from The New York Times.  If you have an issue with something they said, or wouldn’t include in their coverage, etc., sure you can address it with them, but….

Lesson #2 — Assume that anything and everything that you put in writing to/about a blogger will find its way to said blogger (and everyone who follows him/her…and so on….and so on).

Lesson #3 — Once you’ve done your damage, the only thing left to do is give an unqualified apology to the blogger (and the world), and give your staff some remedial training.

A couple of news stories caught my eye recently. Left unaddressed, the issues they cover spell danger for many companies.

The first is from today’s Wall Street Journal.  The story focuses on a Corporate Executive Board Co. (CEB) study of 4,300 employees exiting 80 companies, most with more than $2 billion in annual revenues. The study indicated that more than 75% of these employees wouldn’t recommend their employer to others — an astonishing number — and, according to the CEB, the highest percentage in at least five years.

The other seemingly-unrelated development is a proposal by the National Labor Relations Board (NLRB) that would have the effect of dramatically accelerating the speed with which labor unions could hold elections.  The U.S. Chamber of Commerce and other business groups have expressed concern (and initiated legal action), stating that this change tilts the labor-management dynamic too far in labor’s direction.

So, why should companies be concerned?  Even though support for and membership in labor unions is at historic lows, and many industries have historically been poor or non-existent targets for labor unions, the fact that more and more corporate employees are disgruntled makes them an incredibly-attractive target now.  Couple this with the possibility that the unions may be able to launch an accelerated run on a companies’ workforce, it’s probably only a handful of companies on Fortune’s “Best Place to Work,” “Best Companies for Working Mothers,” and similar lists that can afford to be complacent.

To be sure, during the downturn, many companies had little choice but to put in such steps as pay freezes, hiring freezes, benefits cuts and staff reductions.  But with many companies now sitting on records amounts of cash, the unions can and likely will exploit the dichotomy of “employees who’ve had to sacrifice” with “companies sitting on millions.”

What can prudent companies do?  Of course, it begins with communications — outlining for employees what the company’s business and financial prospects look like and dealing head-on with any cost cutting measures in which employees bore the brunt.  Why did you do what you did and how long do you anticipate leaving these changes in place?  What other expenses (esp. those that didn’t directly affect employees) did you cut?

Do you still communicate top-down only or do you allow for upward and omnidirectional communication?  Are your front-line supervisors adept at communicating? Are you listening to what your employees (and ex-employees) are saying about you on social media?

Beyond that, a prudent review of HR practices is called for.  Are you still benchmarking with competitors to make sure your compensation and benefits practices are in line?  Did you allow your managers to forgo performance reviews?  Do you provide for 360 reviews?

Given the ongoing uncertainty in the economy, some of these steps may seem like luxuries to some companies.  But, with the alternative being the departure of more of your best and brightest, along with the specter of unionization, can you afford not to?

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.

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.

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.

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?

Recently, American Airlines decided to pull its flight listings from Orbitz, citing the desire to retain the fees associated with booking flights. A short time later, Expedia joined the fray, first burying and then blocking American Airlines’ flights from its site, citing what it called the airline’s “anti-consumer, anti-choice” business strategy. American responded by encouraging people to go to its own site (“featuring our ‘Best Fare Guarantee!’”), another travel site like Kayak.com or Priceline.com, or a travel agent.

The problem with commercial disputes like this one (there have been a growing number of others, including Cablevision vs. Fox, a brewing (sorry) one between Kraft and Starbucks, and, of course, the “granddaddy” of them all: Ford vs. Firestone ) is that when they play out in the public, they implicitly or explicitly ask consumers to pick sides. That’s risky. Sure, a company can frame up – in short copy – a nice ad that says why the other company is wrong, but these disputes – especially if they’re not resolved quickly — end up hurting both companies’ reputations.

Added to the mix is when one or the other of the companies already has a difficult reputation (something that’s quite common in the airline and cable industries). Then, not only is it more difficult for the companies to get consumers to “take their side, ” but they are effectively reminding people why they didn’t like them in the first place.

The better course of action is for companies that have a likelihood of a commercial dispute a sustained, long-term corporate reputation program. It’s only when that broad-based understanding and reservoir of goodwill are built can you take a shot at another corporate player and expect to win the court of public opinion.