Each month, Reputation Partners’ Corporate Reputation Blog summarizes news related to some of the key trends and events that captured headlines. Below are some of the stories that had us talking during the month of April.

• In a ruling on how companies communicate with investors, the SEC is allowing companies to post financial information on sites such as Facebook and Twitter as long as investors have been informed about which vehicles the company intends to use. While several large companies, including Dell and eBay, already use Twitter to announce financial and other material  information to investors, a 2012 study by the Conference Board and Stanford University found only 14.4 percent of companies communicate with shareholders via social media.

• In other social media news, Northern Trust Company, the conservatively run, 123-year-old Chicago financial services provider, updated its 2013 ethics policy to further address employee participation in external social media sites. Filed mid-April with the SEC, the policy prohibits employees from accessing social media sites during the work day.
  

  Airports filled with American Airlines passengers nationwide amid thousands of flight cancellations and delays.

• The only thing that took ‘flight’ for American Airlines earlier in April was a national PR crisis. Company-wide operational problems caused the airliner to cancel more than 1,000 flights and delay countless others. While flights resumed the following day, American Airlines continued to deal with customer backlash on Twitter and other social media platforms. The Company’s crisis management efforts included sending out a half-dozen updates on its official Twitter account and Facebook page, along with sharing a video of Chairman and CEO Tom Horton issuing an apology for the inconvenience caused by the system failure.

• In an effort to increase revenue, Facebook is deploying a new strategy to cull personal information from outside the social network and match it with data submitted by its billion-plus users. The Company plans to roll out a new tool to help companies directly target Facebook users based on their offline spending history. With more information on a broader range of Facebook members, companies can deliver targeted communications to help drive sales and influence potential customer’s attitudes and behaviors.

What recent news headlines caught your attention? Leave us a comment and let us know.

Reputation Partners’ Corporate Reputation Blog continues to summarize news related to some of the key trends and events that captured headlines. Below are some of the major stories that had us talking this fall.

• In the last week of October, all eyes were on the Northeast as residents and municipalities prepared for Superstorm Sandy. As the storm ravaged through New York, New Jersey and other surrounding states, millions were left without power, forcing affected residents to use social media instead of traditional media for pertinent updates. Many relied on networks such as Twitter, Facebook and Instagram to remain updated on the weather and the well-being of loved ones. But as the frenzy of information grew with the storm, some disinformation leaked into mainstream outlets causing rumors to spread.

Former Citigroup CEO Vikram Pandit addresses the media

• Citigroup showed that the timing and positioning of a CEO exit is key when communicating a leadership change.  The announcement that ex-CEO Vikram Pandit would be succeeded by Michael Corbat, a longtime Citigroup executive, was made only one day after Citigroup reported its third-quarter earnings, which stunned the market and raised questions. The Wall Street Journal recapped some of the lessons learned from the company’s leadership shakeup.

• October saw a double dosage of accidental earnings releases by two Fortune 250 companies, Google and Dow Chemical. Google was the first to jump into crisis mode after alleging R.R. Donnelley filed the company’s draft earnings statement early. Shortly after, Dow Chemical was forced to release its third-quarter earnings report early after accidentally sending a draft press release to Bloomberg News outlining a restructuring program that would lay off more than 2,000 employees.

•  The 2012 Presidential Election took place on Nov. 6, and  social media played a critical role throughout the election. Both campaigns used Twitter to highlight their key messages during the debates, and about 10 million tweets were posted during the first presidential debate. Twitter’s election coverage feed, @gov, noted 20 million tweets were posted on Election Day using the #election2012 hashtag, making it the most tweeted political event in U.S. history. As the television networks called the race for President Obama, @gov reported a stunning 327,453 election-related tweets per minute. Shortly thereafter, the most retweeted tweet ever came from the @barackobama Twitter feed, saying simply “four more years.”

• This November, we saw one of the most recognized brands in America, Hostess, file for bankruptcy. The company warned it would file a motion in U.S. Bankruptcy Court to shut down operations if enough workers from the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) didn’t end a weeklong strike by 5 p.m. on Thursday, Nov. 18. On Friday, Hostess followed through on that threat, eliminating 18,500 jobs and beginning the process of selling off its factories, brands and other assets. As an expert in labor communications, Reputation Partners’ Founder and President Nick Kalm shared his insight on Hostess’ court-sanctioned mediation with its lenders and union leaders.

A member of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union (BCTGM) strikes.

• After 80 years in print, Newsweek announced that it will become an online-only publication next year. The last print edition will hit stands Dec. 31, with Newsweek Global, the all-digital version of the publication, marking its beginning with the start of the new year.

What recent news headlines caught your attention? Leave us a comment and let us know.

At the beginning of each month, Reputation Partners’ Corporate Reputation Blog will summarize news related to some of the key trends and events that dominated the headlines. Below are just some of the stories that caught our attention during the month of September.

• The Chicago Teachers Union made national headlines throughout the month of September when the teachers went on strike for the first time in 25 years. While the strike was covered daily by Chicago media, it also appeared on the front page of national print outlets such as The New York Times. As an expert on employee/labor communications during work stoppages, Reputation Partners’ founder and president Nick Kalm blogged about labor communications lessons from the Chicago Teachers Union strike.

A touchdown call made by replacement referees during a work stoppage sparked a PR crisis for the NFL

• In similar labor communications and work stoppage news, the NFL and referees’ union continued talks to negotiate a contract. In the interim, replacement referees officiated NFL games, which led to a controversial last-minute touchdown call that resulted in the Seattle Seahawks winning a game against the Green Bay Packers. However, some argue that the public relations crisis stemming from the call helped end the NFL referee union strike. 

• During the last week of September, thousands of individuals and organizations hosted workshops for Social Media Week, a worldwide event exploring the social, cultural and economic impact of social media. While impossible to recap the more than 90 global events, Crain’s Chicago Business boiled down the important takeaways from Social Media Week events hosted in Chicago. The Reputation Partners staff participated in Social Media Week sessions on the importance of targeted audiences for B2B social media communications, how to get CEOs involved with social media and future trends and technologies of the social world.

• Mark Zuckerberg’s recent media appearances demonstrated the importance of executive visibility during times of challenge, after stepping into the spotlight for the first time since the company’s IPO. As an immediate result of Zuckerberg’s appearance at the annual TechCrunch conference, Facebook shares rose in after-hours trading.

What other headlines caught your attention? Leave us a comment and let us know.

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?

There is frequent discussion about effective “crisis PR” – which companies and individuals responded well to a media or reputation crisis and which didn’t (think: BP, Anthony Weiner, etc.).  The timing, tone and message of crisis response is examined and critiqued continuously. You need only do a quick Google search to find endless opinions and debates on crisis response “do’s and don’ts.”

Where the discipline of crisis communications gets far less buzz is crisis prevention. The typical focus is so much on reacting effectively to a media crisis that business leaders (including a surprising number of PR counselors) often short change, if not entirely neglect, the all-important steps that should be taken to prevent an issue from escalating into a PR crisis in the first place. As the old saying goes, “an ounce of prevention is worth a pound of cure.”

Several of my colleagues and I presented on this very topic earlier this year at a series of seminars hosted by risk management leader Chartis Inc. (formerly AIG).  We spoke to hundreds of in-house risk managers and insurance brokers about the importance of reputation risk management and how it’s an essential component of enterprise risk management (ERM). It was a terrific invitation by Chartis, particularly because it signaled that the world’s leading risk management experts understand the important role reputation management and PR risk mitigation play in the risk management mix. In other words, the experts at Chartis “get it” and see real value in helping their clients get it too.

So, how should organizations mitigate reputational risk? What can be done to head off seemingly unpredictable threats?

An obvious yet too often overlooked first step is investing in building a positive reputation. This means companies and executives need to (continuously) make deposits of “goodwill,” by proactively engaging media, in addition to employees, communities, customers, advocacy groups well before any issue arises. The absolute worst time to try to make friends is in the midst of a crisis.

Another critical and often neglected step it to track and act on early warning signs, such as spikes in employee turnover, increases in complaints from customers, investors, community groups, etc., unusual or negative activity percolating on social networks/blogs, more aggressive activist attention, etc. In most of the crisis scenarios our team has encountered over the years, we eventually learn that there was indeed a warning sign (if not several) that went ignored.

Savvy organizations also regularly and officially audit reputation risk, looking inside and outside the company to assess and prioritize potential threats, similar to how they examine operational and financial risks. This work, while too seldom completed, is at the heart of truly effective reputation management. Knowing your vulnerabilities is more than half the battle.

So, while there’s no doubt it’s important to hone crisis response skills, it’s equally, if not more important, to commit to mitigating reputational issues before they snowball. An “ounce of prevention” really can make the difference between a manageable issue that’s resolved without incident and a full-blown reputational crisis that can cripple a business.

It’s one of the calls most PR people can’t stand getting: a consumer watchdog reporter with a customer complaint about your company’s product or service.

Typically it is a run of the mill complaint: a product doesn’t work, a service didn’t meet expectations, an agreement was violated.  But what is most frustrating is that often the issue stems from the trappings of bureaucracy –the complaint got passed off one too many times and the customer eventually got  mad enough to go to the media (when it could have easily been handled to the customer’s satisfaction internally).  And if you’re extra lucky, the customer is so mad they get the reporter to agree that a story about their complaint is warranted.

So what do you do?  You lord over your customer service department (or other applicable team) until they appropriately (if not generously) fix the situation, communicate the fix and apology to the customer and reporter, and pray this stays a one day story.  Remember, the customer is always right – especially if they go to the media.

Or if you’re like this company, maybe you’ll take a different approach.

The Cliff Notes background: tourist goes snorkeling; tour boat leaves without him; tourist spots another boat, swims to safety; tourist relived to no longer be shark bait but is pretty ticked about the situation; tourist demanded an apology; the apology (and accompanying restaurant gift card) wasn’t found to be acceptable; somewhere down the line, the aggrieved went to the media.

The company response?  The full link to a blog post detailing the situation is here, but I’ll call out this gem for readers here as well:

“The fact that this guy [Ian Cole] talked about this shows that he’s just seeking self-exposure, and wants to be portrayed as a hero, you know, a survivor,” Col Mckenzie said. “There’s no lesson to be learnt from this. He is just making a mountain out of a molehill, and trying to maximize his own self-exposure. It’s just bullshit. He was never in any danger. It was just like being left behind on a beach.

“I mean, his demands were unreasonable. He wanted a written apology. I think his requests were morally reprehensible,” Col Mckenzie said

Alrighty then…

Now we all can admit, from time to time we’ve all dealt with complaints/issues against our company or clients that were bunk.  But to actually go on record, tell the world a guy who was left in the middle of the Great Barrier Reef is “making a mountain out of a molehill” and demanding a written apology was “morally reprehensible?”  Now that is worthy of some kind of award for being perhaps the most tone deaf response ever on record.

At the end of the day, companies are often judged more on their response to adversity than to the actual issue itself. Even if the tourist has ulterior motives, the company just played right into an attorney’s hands (the response fits the description of a company with lax standards, in my opinion).  Moreover, you have to believe this will have a lasting effect on future bookings.  Ever see “Open Water?”  Not exactly the brand image you hope to promulgate via media outlets around the world when you’re in the snorkeling business.