Goldman's PR Seems Like a Perfect Reflection of Goldman's Culture

It's 20 years since I read a book called We're So Big and Powerful Nothing Bad Can Happen to Us, authored by USC professor Ian Mitroff, but rarely do more than a few weeks go by without some giant company reminding me of one of the book's central lessons.

Mitroff warned that large and successful companies are particularly prone to believing their own mythologizing. They come to believe in the rightness of their own mission to such an extent that any criticism of that mission is not only ignored, but taken as evidence that the organization's critics are either ignorant or malevolent. At best, they simply don't understand the institution or policy they are criticizing; at worst they are pursuing some agenda that involves the destruction of all that is right and good in the world.

This kind of thinking can be detected in the response of Goldman Sachs to those who are mildly displeased that the company helped to bring the entire global economy to the brink of financial catastrophe and yet continues to vocally oppose any checks on either its behavior or the rewards it lavishes upon those responsible.

The most visible example of Goldman's attitude was provided by chairman and CEO Lloyd Blankfein as part of a Sunday Times interview in which he insisted that the bank was doing "God's work." The clear implication is that anyone who opposed Goldman or criticized its behavior was pretty much by definition an agent--wittingly or otherwise--of Satan.

A similar contempt for competing viewpoints was evidence in the behavior of Goldman employees during protests in the City of London last year. Those who participated in those protests returned with stories of bankers ostentatiously setting light to currency (the smallest paper note in London is worth around $8) in response to anger at their role in the collapse of the economy.

So it seems a little unfair that a post at the New York Times' Dealbook blog focuses entirely on Goldman's PR chief, Lucas Van Praag. Even if all of the criticisms compiled in this post are true, it seems to me that Van Praag's attitude is merely a reflection of the corporate tone and--more significantly--the corporate culture.

Having said that, the most telling criticism comes from Market Watch, which has written of Van Praag's communications style: "The message is you're emotional and don't have your facts straight. We're reasoned and objective about our own matters. You, dear media critics, don't know what you're talking about."

It's interesting that people who respond with a knee-jerk defensiveness--a reaction that spares them the effort of actually engaging with their critics--always seem to believe that their critics are the "emotional" ones. In the world of psychology, I believe that's called projection.

Hire This Man Now

At his rather rudimentary website, risk management maven Peter Sandman--it was he who first defined risk as the sum of hazard plus outrage--has a couple of new articles, one of which indicates that he has started thinking about his legacy.

Sandman, who is now 64, is thinking about teaching a risk management master class (something he could do in his sleep); about turning his website over to new owners (the design might improve, the content won't); and about becoming someone's risk communications guru.

"The final leg of my legacy plan is a series of strategic partnerships with organizations that want to institutionalize my approach to risk communication as one of their areas of strength," he says. He has already formed a partnership is with the International Association for Public Participation, but says: "I am still looking for a public relations firm and a management consulting practice that might see my bag of tricks as a competitive advantage."

Someone should get Sandman on board, and quick. However strong your existing crisis communications capability is, believe me: it would be stronger--and more credible at the C-level--with Sandman as part of it.

Tiger's PR Problems Began with Phony Image

Unlike everyone else in the western world, I find the scandal surrounding Tiger Woods spectacularly uninteresting. Once you get past the fact that there are women who are prepared to have sex with golfers (!) it seems like a pretty banal, clichéd tale of tawdry sex.

But it does provide a helpful illustration of one of the classic misconceptions about public relations: that good PR involves making a company, brand, or--in this case--personality look better than it really is.

In truth, that's the probably the worst kind of PR you can have, because when the public discovers the gap between perception and reality is eventually discovered, as it inevitably will be--just ask Woods--the public backlash will be swift and furious.

In other words, Tiger's PR problems didn't begin with the discovery of his extramarital affairs; it began with the manufacture of an image that bore no resemblance to reality. That's a lesson for companies that see PR as a tool to exaggerate their records on environmental or social responsibility.

The 25th Anniversary of Bhopal

At this point, it seems highly unlikely that Dow Chemical will ever step up and accept responsibility for the 1984 accident in Bhopal, India, that killed around 4,000 people and left many more with lifelong health problems and indelible memories of pain and suffering and horror.

The company--which acquired the assets of Union Carbide, but apparently none of its obligations, back in 2001--has resolutely refused to accept any legal responsibility for Bhopal. That it bears moral responsibility seems to me to be unarguable, and so perhaps the best we can hope for today is that every year around this time (yesterday was the 25th anniversary of the incident) activists and reporters and people on conscience around the world do whatever they can to make the leadership at Dow feel a little shame for the way they treated--and continue to treat--the victims of Bhopal.

So kudos to New York University journalism professor Suketu Mehta, whose International Herald Tribune op-ed I read over breakfast in Hong Kong this morning and who captures the essence of the story in one sentence: "What's missing in the whole sad story is any sense of a human connection between the faceless people who run the corporation and the victims." So busy have the people who run Dow Chemical been distancing themselves from this tragedy that it would presumably be emotionally devastating for them to see the victims are actual living, breathing human beings. That doesn't means we should stop trying.

Meanwhile, Dow continues to invest millions of dollars in promoting its corporate responsibility and sustainability efforts. But the company's true values are reflected in its actions, not its words. And at least for one day out of the year, it's good to be reminded of those actions--and of the company's continued inaction on this one defining issue.

Free PR Advice for Tiger; None for GM?

Every day, Google sends me a news alert containing various stories about "public relations." For the past couple of days, fully half those stories have been about Tiger Woods, quoting the public relations advice of various industry experts. At the same time, the PR-focused LinkedIn group of which I am a member is in the midst of a discussion offering even more advice to Tiger. So far, the discussion has generated 40 posts, which is a good number as these things go.

Meanwhile, in case nobody noticed--and the evidence suggests nobody did--the chief executive of General Motors just resigned in circumstances aptly described by automotive industry expert Paul Ingrassia in The Wall Street Journal as "abrupt and enigmatic."

Covering the resignation, and the company's failure to explain it or provide any context for evaluating its impact, Reuters says that "GM needs to explain why it's changing its driver." Despite the fact that this is a communications issue, no public relations experts are approached for quotes, or for advice. (Compare to this parallel article on Tiger's PR problems, replete with quotes from PR and marketing experts.)

In other words, the more trivial the issue, the more likely reporters are to seek the opinions of PR people. And the most likely PR people are to want to volunteer opinions.

Look, I understand that there are people--including some PR people--who actually believe golf is more interesting than watching paint dry. I respectfully disagree, but I know those people are out there. I have no problem with them offering PR advice to Tiger. But it would be nice if they could give the impression that they are at least as interested in the public relations problems of one of the world's iconic corporations.

"United Breaks Guitars" Closing In On 6 Million Views

United Breaks Guitars, a lament--country and western style--from a Canadian passenger dissatisfied with the handling of his Taylor guitar, is now approaching 6 million views on YouTube, and provides an excellent example of how a single instance of lousy customer service can come to define a brand for at least a certain segment of the public.

Interestingly, viewing the video on YouTube will lead you pretty quickly to much of the mainstream media coverage of the story, as well as a smart response from Taylor Guitars that--without taking sides--provides you tips for transporting your guitar safely. But the only United Airlines responses I could find were parodies.

(My favorite parody, though, is yet another subtitled version of the movie Downfall, in which Hitler learns that United broke his guitar. You only need to watch about 30 seconds to get the gist, although the whole thing is pretty good.)

I don't have a lot to say about this that hasn't already been said, except that it provides yet another piece of evidence that in today's world, customer service has to be a part--a key part--of the public relations department.

The Battle of Trafigura: A PR Fiasco

To get the obvious out of the way first, the attempt by the law firm Carter-Ruck to prevent The Guardian informing the British people of proceedings in the British Parliament was both disgraceful and counter-productive. And the resulting furor--including a storm on Twitter--surely demonstrated beyond any reasonable doubt that any attempt to stifle coverage in the social media age will have precisely the opposite effect.

The background, of course, is fascinating. The law firm in questions was acting on behalf of oil company Trafigura (an enterprise that makes ExxonMobil look like Ben & Jerry's), which has been trying to buy off the victims of its toxic dumping off the coast of Africa and which will--if Greenpeace has its way and the British justice system comes to its senses--soon be facing prosecution for manslaughter.

But since this is a public relations blog, let's focus for a second on the PR debacle that resulting from the attempted gagging order. The Guardian appears to have be silenced for about 12 hours, before Carter Ruck backed down. The story that everyone was trying to suppress, meanwhile, has become one of the biggest topics of discussion in social media, with outrage over the original scandal amplified and exaggerated by fury over the cover-up.

None of this was remotely unpredictable. Anyone with even the most rudimentary knowledge of the modern media landscape must surely have known that the attempt to silence The Guardian would mean bigger, nastier headlines.

So the obvious question is: where were the PR people in all this? There are three--and only three--possible answers:

1. Trafigura didn't bother to consult with its PR people--the company saw this as a legal issue. If that's the case, Trafigura management are morons. And its legal advisors are morons for not thinking about the possible PR consequences of their decisions. And its PR people must still take some responsibility because they have clearly failed to convince management that they have any kind of grown-up role to play.

2. Trafigura consulted its PR people and they agreed with the lawyers this was a jolly good strategy. If that's the case, Trafigura management are morons, the lawyers are morons and the PR people are incompetent morons.

3. Trafigura consulted its PR people and the PR people told the company that it was making a huge mistake. The company listened patiently, and then decided to do what its lawyers said it should do, ignoring the sound advice of the PR people. If that's the case, Trafigura management and morons, its lawyers are morons, and its PR people--unless they resigned en masse--has a serious self-respect deficit.

Any way you look at this, no one comes out of it covered in glory.

The France Telecom Suicides: Implications for Crisis PR and Change Management

I had intended to blog about the France Telecom crisis--24 employees have committed suicide in recent months, a trend many observers are linking to restructuring efforts--last week, but now Leslie Gaines-Ross has beaten me to it. (And actually, it seems that European PR blogger Paul Seaman was on the story ahead of either of us.)

The company initially claimed the suicides were the result of personal, not professional, issues and pointed out that the figures were in line with national statistics. But several victims were explicit in blaming the stress of work. One said "management by terror" had driven him over the edge, adding: "I am committing suicide because of my work at France Telecom. That's the only reason."

By the middle of last week, there were signs that the company was taking the crisis more seriously. CEO Didier Lombard called a halt to the reorganization and promised to introduce workplace counselors. Louis-Pierre Wenes, the architect of the change initiative, resigned.

Seaman is critical of the company's response here, suggesting that the "apologize, reform, move on" approach to crisis communications is "patronizing and condescending" and that by accepting blame for a problem that at the very least has multiple, complex causes, the company is actually deflecting a more serious analysis of the issue.

My own feeling is that the company's public relations efforts appear to be motivated by a determination to put the issue to rest, which is understandable but not necessarily the most responsible course of action. I would have preferred to see some sign that France Telecom would sincerely like to participate in a process--I don't think the company itself should lead that process--to learn more about the causes of these suicides and avoid similar incidents in the future.

(I'm not sure I agree with Paul, who seems to think he knows the cause: "There is a problem with modern individualism: it makes people nurture their vulnerability, and especially their being victims of capitalism." I'm not sure any problem is quite that simple or one dimensional.) CORRECTION: In the comments, Paul points out he was not trying to explain the causes of the suicides with that comment, and that he acknowledged in his post that "Suicide is deeply personal. Its causes are difficult to fathom." My apologies if I over-simplified or distorted his argument.

Meanwhile, at her HBR blog, Gill Corkindale is more interested in the implications for change management in general, asking: "Do you believe, as I do, that managers and employees should accept that change is inevitable and work together to share the burden of stress and organisational change? Or do you feel, as some of the France Telecom workers do, that companies go too far, driving employees to distraction with continuous change programmes, unfair demands, and unskilled management?"

How about both? Change is inevitable--and even the most wrenching change management program is less stressful than the alternative, because failure to change is likely to lead to total destruction. On the other hand, companies too often fail to gain employee consent to change--it is imposed rather than developed through a participative process--and fail to share the responsibilities and costs equitably.

Is This One Crisis That's Good for Business?

Far be it from me to inject a note of cynicism into the proceedings, but I'm not sure Fraser Sietel's FoxNews opinion column has it quite right when it comes to offering PR advice to philandering talk show host David Letterman.

For one thing, I think Letterman has earned the right to the benefit of the doubt when it comes to knowing his own audience.

For another, Fraser writes: "Dave's public relations objective must now be... "to get this stinkin' story off the front page!" And later adds: "The point is that continuing coverage of this sorry expose serves no purpose for the beleaguered star."

Here's where the cynicism comes in. Continuing coverage of the scandal seems to me to serve one very obvious purpose : Letterman's ratings are soaring.

Is the boost in ratings worth the continued embarrassment? That's a call only Letterman can make. But perhaps this is one case in which a crisis is good for business.

John Thain Isn't Going to Sit There and Listen to You Bad Mouth the American Dream

One of my favorite scenes in one of my favorite movies is the "trial" of Delta house, in which Tim Matheson manages to suggest that by bringing charges against the eponymous Animal House, the dean of Faber College is in fact attacking the entire education system, and the country as a whole, inspiring a walkout by his fraternity brothers with the immortal line: "You can do what you want to us, but we're not going to sit here and listen to you bad mouth the United States of America."

The clip came to mind after watching former Merrill Lynch chief executive John Thain--you may remember him as the guy who spent $1 million redecorating his office after destroying many times that amount in shareholder value--in a presentation to Wharton Business School, in which he responds to attacks on his personal excesses with the claim that "the American dream has been demonized."

This from a man whose greed and ego shattered the dreams of thousands of Americans.

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