Underthinking Mackey: Steven Silvers

Is it possible to be right and wrong at the same time? Steven Silvers is the principal at Denver-based GBMS, Inc., a group of professionals who “understand the complex nexus of business, government, media and community in which organizations operate today.” And, as focused as he is on complex issues, his well-written post says the Whole Foods Market, Inc. crisis might not qualify. On one hand, he is very, very right.

There was little need for the Public Relations Society of America (PRSA) to send out a news release about "reputation impact of undisclosed-identity executive internet postings."

"Corporate executives in all areas of a company must be acutely aware of the ethical implications of communications they initiate, including those under the auspices of being a ‘private citizen,’" said Rhoda Weiss, national chair and CEO of PRSA, in the release (highlighted by Silvers) that aims to capitalize on the case with reactive comment.

Most people get that, I think, which is why Silvers proposes that the most simplified version of the Mackey study is “smart people sometimes do stupid things.” Then he goes on to write a better version of the release: “Don’t post comments on the Internet promoting your company’s stock and slamming your competitors while pretending to be someone else. This is wrong. You could cause a huge PR problem for your company. You’ll probably get sued, and you might be breaking the law. …”

It made me smile, before departing from his assessment a bit. It would be simple, but nowadays things have consequences that are not confined to where they belong. This will not be confined to Mackey. This will not be confined to Whole Foods Market. And this will not be confined to, well, anything.

The consequences, as expected, are likely to be tossed about by folks like Andrew Keen in his admittedly biased war against anonymity and amateurs on the Web. And perhaps, they will even reinforce the call for a code of conduct. And perhaps, there will be some new legislation. And perhaps, we’ll polarize it all.

“We have the most protected, covered, cautious and public relations-barricaded generation of leaders in history. Today’s tightly controlled, artfully packaged executives want to release and spout off, and they somehow think this is a forum where they’ll be held less accountable,” says Jeffrey A. Sonnenfeld, a professor of corporate governance at Yale. Indeed, and executives are not alone in feeling this way.

"It doesn't seem likely that investors who may have read these chat rooms would have had reason to act, thereby materially affecting the stock price, because the CEO's identity seemed to be concealed and the materiality of the comments made looks low," Stephen C. Chick, JPMorgan, wrote in a client note, adding that while Mackey's actions "lack judgment," they are unlikely to affect Whole Foods' stock price.

And there it is. Why is this case study complex? Under the surface of simplicity resides the very foundation of an increasingly challenging issue caused, in part, by public relations’ attempt to mold people into something they are not; the media’s shift to be less concerned with finding the truth and more concerned with gathering up polarized viewpoints; and the public’s desire to create labels for everyone but themselves, good or bad.

The concept that “perception is everything” has permeated every facet of our society to such a degree that most people are increasingly judgmental about the actions of others. And perhaps, it is from this very place where the desire to be anonymous in today’s society seems to have very little to do with people wanting to behave badly and much more to do about their fear of being judged.

Adding rules and increasingly strict guidelines on the Web will only make it worse. I propose our time and energy is much better placed in educating people that it doesn’t make much sense to lend anonymous sources credibility beyond a single comment. While some have better intentions, others have agendas.

"They [the FTC] are quoting rahodeb in some of their legal documents and no doubt seek to embarrass both me and Whole Foods through these disclosures," Mackey has said. In fact, Mackey reports he had fun doing it, implies that he has no regret or remorse, and doesn’t seem to know the difference between making casual anonymous comments about his competitor and manipulating stock.

Is it because he is eccentric or ignorant? Don’t be silly. Mackey isn’t typical, but he isn’t stupid either. He knows that the day he admits that what he did was wrong and apologizes for it will be the same day that the Securities Exchange Commission (SEC) will no longer need to prove that Mackey knowingly violated securities law, intentionally using his anonymous postings to manipulate price.

To be clear, of course what Mackey did was wrong. But virtually every outcome in this case will have little to do with reality and much to do with perception.

The Federal Trade Commission’s ability to prevent the merger will be based on perception. The outcome of the SEC investigation will be based on the determination of motivation, which will be based on perception. Shareholders will decide to buy or sell Whole Foods Market stock based on their perception. And the argument whether anonymity might be protected or abolished will be based on perception. It’s all based on perception because we live in a world that is increasingly focused on, well, perception.

After years of watching us trend toward creating pristine perceptions while nurturing the fear of being judged by others (who might discover the "truth"), maybe it’s time we remember that it is much more dangerous to allow the perception of a personal brand to drift dangerously away from reality and toward some idealized label than it is to manage a brand that represents who we really are; good, bad, or indifferent. (As even Albert Einstein once confessed, he only combed his hair that way for the benefit of the media.)

Or, in other words, Mackey might have considered it would have been equally “fun” to post his comments as himself. People would have the perception he was wacky (they do anyway) and there would be no crisis. But that's the simple part. The harder part is recognizing this issue is complex because we have made the environment complex.

Once we hung horse thieves, now we try to understand and justify them. Once we sought truth, now we celebrate opinion. Once people said what was on their minds, now they hide their thoughts unless protected under the veil of anonymity. Once we shopped because eating dinner with our family was fun; now we ask Whole Foods Market to make it fun for us. Simple indeed.

Telling Whole Truths: John Mackey

According to the Core Values of Whole Foods Market, there is only one way to satisfy the needs of stakeholders. And that is to satisfy customers first.

Oh, make that two ways. According to The Associated Press (AP), John Mackey, CEO of Whole Foods Market Inc. (Whole Foods), found that posting under the anonymous name “rahodeb” was a pretty good way to satisfy the needs of stakeholders as well.

According to the story, Whole Foods announced it would buy Wild Oats for about $565 million, or $18.50 per share. But unfortunately, this comes after “rahodeb” posted the stock was overpriced; predicted the company would fall into bankruptcy; claimed it would be sold after its stock fell below $5 per share; declared Wild Oats' management "clearly doesn't know what it is doing;" and that the company "has no value and no future."

Obviously, “rahodeb” must have miswrote because Wild Oats does have value: $18.50 a share, which is sharply steeper the $5 per share that “rahodeb,” er, Mackey, um, "rahodeb" had hoped for as the masked Wild Oats stock vandal.

In fact, Wild Oats is so valued by Mackey, he has taken to misappropriating his company's public relations and social media communication to flame the Federal Trade Commission (FTC). Apparently, he is not happy they made his anonymous comments public in an attempt to block the merger nor does he accept that the FTC is trying to prevent the elimination of another competitor.

"As previously announced, we set an intention as a company to be as transparent as possible throughout this legal process, and this blog entry is my first detailed effort at transparency," said Mackey in a news release that neglects to reveal how posting anonymous comments on Internet financial forums for seven years might be transparent.

“I provide explanations of how I think the FTC, to date, has neglected to do its homework appropriately, especially given the statements made regarding prices, quality, and service levels in its complaint. I also provide a glimpse into the bullying tactics used against Whole Foods Market by this taxpayer-funded agency,” Mackey continues on his blog. “As stated in our initial press release about Whole Foods Market's challenge to the FTC's complaint, we set an intention as a company to be as transparent as possible throughout this process. This is my first detailed effort at transparency.”

Hmmm ... I suspect if there is any "whole truth" that could potentially win a fruit basket then “this is my first effort at transparency” must be it. Unfortunately, had Mackey done his homework, the best time to be transparent is before one damages personal credibility. So, what this all means is the happiness factor of Whole Foods (where I shop sometimes) is about to be spoiled.

How do I know? Well, some of the writing is already on the blog. Mackey, just days before this seven-year ethical breach came to light, published the graphic above for one of his more colorful, but long-winded posts, Conscious Capitalism: Creating a New Paradigm for Business. He says the image represents “a common view of the good, altruistic non-profit organizations versus the evil, selfish, greedy corporations.”

Overall, I don’t subscribe that the notion that this is really the "common view." It seems more likely to me that each company is charged with its own reputation management. And, with this responsibility, each is free to nurture positive public opinion in any it feels fit, starting with the behavior of its CEO.

But then again, if the "common view" is that corporations are “evil, selfish, and greedy,” it seems to me that any CEO who would attempt to drive down the stock prices of a competitor, under the veil of anonymity, certainly isn't helping this perception go away.

In sum, Mackey wants us to accept that there are truths, half-truths, and now “whole truths.” And while that might sound all fun and amusing (enough to start a living case study), the SEC isn’t laughing.

Guessing Intentions: Burger King, McDonald's, Wendy's

As reported by the Associated Press, Burger King, McDonald's and Wendy's are all balking at New York City's new rule that will require them to post calories on menus. Taco Bell and KFC won't talk.

"They are afraid that when people see these eye-popping calorie numbers, they might switch to a smaller size," Michael Jacobson of the Center for Science in the Public Interest, a health advocacy group, told the AP. "They feel it is going to hurt sales."

Jacobson's answer likely comes from a question I usually advise our clients not to play along with. While the wording might be off, it's a good guess the AP reporter asked "Why do you think Burger King, McDonald's and Wendy's are afraid to post the calories?"

Speculation can be a dangerous game, even if you are an advocate of the new rule that covers some 2,000 New York City eateries. More likely, the only reason three chains are taking a harder stand is because the New York State Restaurant Association challenged the rule in court, the city said it won't fine anyone until October, and the "calorie counts" are required to be the same size as the price.

While this story appeared on SpinThicket as a PR Nightmare, I'm wondering if it isn't just good old-fashioned spin and not on the part of the quick service industry (that's the PC term for fast food. Ha!).

True, quick service is not the most nutritional choice for lunch (neither is what most of our children are served for school lunch). But also true is that, sometimes, elected officials overreach in creating regulations that are meant to "protect us from ourselves" because, frankly, it looks bad to serve a term in office without making something up. I think this might apply.

What New York City has going for it is perception: hamburgers are somehow evil. What it has going against it is reality: adults don't need to feel guilty about their choices.

Besides, most of this information is available anyway. As Denny Lynch, spokesman for Wendy's, told the AP, Wendy's has made this information available for 30 years. Indeed, it's been a unique selling point on more than one occasion.

Hmmm ... sometimes business has a tendency to set industry standards without an assist from government. So if Subway, KFC, and Wendy's haven't been able to cut into competitor sales on the selling point they have lower calorie choices by now, then I doubt very much city government regulations will either.

Saving Jobster: Joel Cheesman

In December 2006, Jason Goldberg, CEO of Jobster (one of the first employee recruitment search engines and “somewhat, sometimes” transparent CEO blogs), embarked on a perilous crisis communication adventure when he asked his employees to ignore rumors of a mass layoffs. "Put down your pencils .... calm it down, relax a bit, and have a nice holiday,” he said. “We’ve got big news to give ya before the new year."

Although Goldberg dismissed outsider speculation, despite leaving hints on his own blog over the holidays, 60 of the company’s 148 employees were laid off, which was much worse than any one had guessed.

For my part, the entire story presented itself as a living case study in crisis communication (what not to do) with one question that remained unanswered for the better part of six months: could Jobster erase the reputation damage it endured externally and the employee morale flogging it weathered internally?

While I appreciate there are still plenty of people who say Jobster’s business model (or lack thereof, some claim) will one day be its undoing, I submit that the company has moved beyond the employee post-holiday massacre. Yet, perhaps even more ironic, some of the credit to ending the great Jobster layoff debate doesn’t even belong to Goldberg. It belongs to Cheezhead’s Joel Cheesman in April.

How did Cheesman help save Jobster from existing in a Groundhog Day-like movie, reliving the layoffs over and over again? Simple. After promising a public smack down between himself and Goldberg at a recruiting conference, Cheesman, in his own words, left people with “less rumble, more mumble and fumble.”

True. The worst of the four non-smack down questions was when Cheesman asked Goldberg “what does Jobster want to be when it grows up?” And then, after Goldberg appropriately addressed his understanding of the modern career market (you cannot intern with a master-class spokesperson like President Bill Clinton and not learn a few presentation skills), the Cheezhead summed up an even better answer for his so-called adversary, saying Jobster wants to be “a career center for the digital age.” Yep. That will work.

The better questions, perhaps the only questions that really needed to be asked, have never been answered: why did Goldberg hint, then deny, then confirm layoffs at Jobster? And, how can Goldberg think he was being transparent when all of his actions represented the exact opposite of transparency? But alas, asking those questions and two or three follow-ups is what makes for a great aggressive media session. (I’ve had clients reach over the table as if to hit me during mock media sessions before they are reminded that it’s only practice and my questions are nothing but “acting” the part.)

I don’t think Cheesman has had such training so it’s no surprise that he killed the great Jobster layoff debate by jumping the shark in a face-to-face venue that is remarkably well suited for Goldberg (as if we didn’t know that; he founded a company with about $40 million in venture capital). Of course, I am not saying that Cheesman “saved” Jobster single-handedly. Goldberg has done a fine job at improving Jobster’s communication, including the Jobster blog.

While you won’t often find the kind of entertaining hot talk and foodie reviews that used to drive traffic there, the blog does read better and includes a few more voices than it once used to. So while the traffic numbers are much lower than before, the blog seems to be better targeted in attracting the attention of people who might be interested in Jobster as a customer or investor.

Although Goldberg still likes to hint on occasion, and sometimes without a payoff on those promises, he still tosses out ideas that seem interesting to me. Can anyone really become a sourcer with some simple online technology? Will the pay-for-applicant model really revolutionize recruiting? Can Jobster really keep its communication tight, focusing more on its message than everyone else’s? Will the now Goldberg-employed John Sumser save Jobster-owned Recruiting.com or let it fade away into the abyss of forgotten blogs?

I don’t know. It is certainly something worth watching even though the living case study on Jobster’s layoff debacle has come to a close (I meant to wrap it weeks ago until Jericho fans pushed back the post for days and then weeks). That said, you’ll have to wait for a book that recaps the Jobster case study with some additional insights. Yep. For better or worse, Jobster earned its chapter.

Splitting Frames: The Nikon Campaign

Reading Strumpette’s take on the Nikon Camera D80 campaign, you might think it’s the end of the profession as Amanda Chapel (a pseudonym?) purports to lesson Michael Kempner, MWWGroup, on the ethics of their blogger program.

Don’t get me wrong, Chapel has a fine blog that works real hard offering a smattering of "spicy" public relations observations to lure in the willing or wicked or whatever. There is no question that Strumpette is a popular blog that reads as the polar opposite of Steve Rubel’s Micro Persuasion, one of my favorites.

This time, I don’t really agree with Chapel’s twist on the Nikon story. She claims this is blatant bribery or “blogola.” All I see is that there seems to be some rumbling from public relations professionals that maybe, just maybe, they don’t know whether the campaign is ethical or not. Ho hum.

For the most past, the blogger campaign seems to be a natural extension of “Picturetown” where Nikon gave away 200 cameras to the residents of Georgetown, S.C. ADWEEK’s Barbara Lippert recently wrote that there is “something really satisfying about basing an ad campaign on the real stuff of user-generated content. It bulks up the experience and democratizes the process, not only for picture takers, but also for the viewers.”

So why not bloggers? Eric Eggertson, who pens Common Sense PR, seems to think that it is okay.

“Should bloggers feel guilty if they end up paying the discounted price and keeping a valuable camera? Not in my book. I don’t really expect them to write negative things about the camera. What’s not to like about a top digital SLR from a top brand? There are too many settings?”

Joseph Jaffe of Jaffe Juice says “I have to tell you that in my humble opinion, this has been the best example of blogger outreach I have either experienced (first hand) or read about.” But then again, he has a camera so perhaps that doesn’t count. Or maybe it does because it is blogger outreach.

If we go back to the original definition of a bribe (money or favor given or promised in order to influence the judgment or conduct of a person in a position of trust), there still seems to be some holes in the ethical argument because MWWGroup never placed any conditions on the campaign like “you must write good things about it or send it back” or “you must use it every day.”

Nope. Other than asking the bloggers to include a campaign disclosure if they write a product review, which seems to be the opposite of a bribe, I don’t see any conditions that may influence these bloggers. In fact, it almost seems to me that the threat of making them appear influenced has a greater chance of skewing their objectivity. But that requires a different term all together.

Chapel says I underestimate the true dynamics of the issue. Not really. It seems to me the true dynamics of the issue is not being discussed enough. Public relations firms are being put in an unfair position: they are ridiculed for ignoring bloggers and chastised for inviting them to review products at the same time.

Fair reviews don’t just come from publications with product purchase budgets nor do they come from bloggers with deep purses. Fair reviews come from people who are true to themselves, whether or not they are invited to the opening, asked to take a test drive, or given a loaner.

Any other position is unfair to the reviewer as it attempts to guess their motivation at best and insults their ability to be objective at worst. Any other twisted facts on this issue would force us to conclude that we are all somehow unethical for sampling a cheese square at the local grocery store.

After 15 years of straddling the fence between public relations and journalism (five of those years editing a trade publication for concierges who ask similar questions), the best measure remains with the writer’s own sense of ethics. Better advice might be to resist the urge to name call, especially my readers, as it almost always erodes the name caller's credibility.

Ergo, MWWGroup has done a fine job wading into the waters of social media. While the Nikon campaign might be improved upon, there are virtually no details that deserve mention. They may even be given kudos for the experiment, especially because they tried so hard (maybe overly so) to remain above board.

Bribing Bloggers: Ragan's Grapevine

Michael Sebastian, writing for Ragan's Grapevine, resurrected Amanda Chapel's comments on camera-maker Nikon's "loaning" 50 bloggers a pricey new camera for 12 months. In Chapel's piece last week, she notes that that "most reporters, e.g. NYT, WSJ, BusinessWeek, Forbes, etc., can't even accept a free lunch anymore because of new ethics guidelines. The era of wining, dining and bribing reporters is long over."

Given this, the general theory is that companies are attempting to curry favor with "b" and "c" list bloggers, offering loans, gifts and payments for favorable reviews. The downside for a blogger is that when they accept a gift or loan, they take a departure from the world of journalism. Hmmm ... maybe.

Last December, I wrote a less than flattering piece on PayPerPost, just hours prior to a terms of service change that required bloggers to disclose that they were being paid for their reviews. Had the post been penned after the change, my take on it would have been different.

In such instances, disclosure can make all the difference (though I don't recommend turning every editorial post into an advertorial post or you'll likely lose your readers). The same can be said about the Nikon camera campaign. Any ethical breach is not in the loan of a camera, but rather in the blogger's willingness to be swayed by the loan or if the loan is conditional on a favorable review or frequency of a product mention.

It all comes down to the blogger (or reporter for that matter) asking themselves if they can remain objective despite whatever offer is on the table, Nikon camera "loan" or not. Only the blogger can answer that question. Because, in general, if we attempt to guess the ethics of others, we only demonstrate our own lapse in understanding ethics.

Journalists, reviewers and critics in particular, have always received new products and beta programs (or attended openings) so they could write editorial. The reward for remaining objective is simply a matter of preserving their own credibility as a reviewer. To do the same, bloggers only need to appreciate that credibility is their most valuable asset as well.

So while I agree with Sebastian and Chapel that skewing reviews for favors is unethical, bloggers without journalism or public relations backgrounds only need a reminder now and again that the best editorial is not for sale. Likewise, just because someone sends you something, it doesn't mean you are obligated to write about it.

In closing, I might also add that Ragan entered the social media scene in force. Ragan's Grapevine has been a great addition to communication blogging and its new social network Myragan.com is one of three social networks I think are worth checking out (I'm still wading the waters). The other two are Recruitingblogs.com and BlogCatalog.com.

I'm hoping to share why I think so sometime next week. And given the topic of this post, I might add that I wasn't paid to say that. Grin.

Talking Transparency: Fox News

On Friday, the Nevada Democratic Party backed out of a FOX News-sponsored presidential debate after Roger Ailes, president of FOX, made some remarks, jokingly comparing Democratic Senator Barack Obama to al Qaeda leader Osama Bin Laden.

As written up by the The Huffington Post the remarks prompted Senate Majority Leader Harry Reid (D-NV) and Tom Collins, the head of the Nevada Democratic Party, to cancel the debate. The letter read:

"A month ago, the Nevada Democratic Party entered into a good faith agreement with FOX News to co-sponsor a presidential debate in August,'' Reid and Collins said in the letter. "This was done because the Nevada Democratic Party is reaching out to new voters and we strongly believe that a Democrat will not win Nevada unless we find new ways to talk to new people. To say the least, this was not a popular decision. But it is one that the Democratic Party stood by.''

"However, comments made last night by FOX News President Roger Ailes in reference to one of our presidential candidates went too far,'' the letter went on. "We cannot, as good Democrats, put our party in a position to defend such comments. In light of his comments, we have concluded that it is not possible to hold a Presidential debate that will focus on our candidates and are therefore canceling our August debate. We take no pleasure in this, but it is the only course of action.''

Politics aside, this living case study brushes up against the concept of transparency in business. Just how much is too much? For Ailes, his political leanings obviously have real life consequences, if nothing else, giving Democratic leaders the excuse they needed to cancel under pressure from the more than 265,000 people who signed a petition calling Fox "a mouthpiece for the Republican Party, not a legitimate news channel." At the same dinner where Ailes made the controversial remarks, he also offered a warning about a growing trend.

"Pressure groups are forcing candidates to conclude that the best strategy for journalists is divide and conquer, to only appear on those networks and venues that give them favorable coverage...This pressure must be resisted, as it has been in the past," Ailes said. "Any candidate for high office of either party who believes he can blacklist any news organization is making a terrible mistake."

While Ailes is right, it seems he was equally wrong by being, perhaps, too transparent in his remarks, reinforcing a growing belief that today's media, particularly broadcast media, is biased toward one party or another. Clearly, it seems over the last ten years, traditional media has shifted from reporting the news to setting an agenda to having an agenda.

In part, it is for this reason businesses are looking (or will be looking) for new ways to create more open and direct dialogue with their consumers by employing, among other vehicles, social media. The question that remains unanswered, however, is whether traditional company presidents and CEOs have the skill sets required to get the job done. In many cases, there is growing evidence that suggests they do not.

In their quest to be more transparent, presidents and CEOs tend to be either too tight or too loose with their lips. A few days ago (thanks for the tip Amitai Givertz ... your new "blog-enabled" Web site is looking up!), The Melcrum Blog highlighted an article in the Financial Times UK edition that reminds us of some recent CEO gaffes...

"I don't borrow on credit cards because it's too expensive." — Matt Barrett, CEO of Barclays.

"People say how can you sell this for such a low price. I say because it is total crap." — Gerard Ratner, CEO of Ratners

"Assets like [Sainsbury] don't come on the market very often. Your shareholders would think you were an idiot if you didn't consider it. Watch this space." — Stuart Rose from Marks & Spencer, uttered over a "glass of wine," which was followed by an 'official announcement' declaring that the board of Marks & Spencer had decided it did not intend to make an offer.

For the best CEO practitioners of transparency, the rewards of mastering this double-edged sword are pretty great. According to the International Association of Business Communicators, 72 percent of consumers say reputation influences their buying decisions, 80 percent of employees will accept less money to work with a company that has an excellent reputation, and 82 percent of consumers say reputation is the tie-breaker between equal choices.

Case in point, recently I entertained a relatively gruff recruiter who wanted to establish a "relationship" in case my career goals might change in a few years (probably not, but whatever). It didn't take long to deduce that she only wanted to fill one job (that wouldn't have been challenging for me) and rob my contacts to do it. Even more perplexing was her insistence that strategic communication had something to do with how big your media contact Rolodex is (what's a Rolodex nowadays, anyway?) I've decided against publicly chastising her ignorance out of respect to my friend who referred her, but it fits within the context of mastering transparency basics to remember:

• You are never off the record (you're being interviewed even when conducting an interview).
• You cannot buy it (creating a flog, making false promises, or shifting agendas midstream).
• You cannot fake transparency and hope to retain your reputation over time.
• How you react to a mistakes will have greater weight than the original blunder.

The bottom line is that corporate transparency is not all that different from recognizing that you are in the public all the time (even when you don't think you are). Some people are good at it. Some are not. For starters, however, you have to have a message that is aligned with your business objectives, sensitive to the audience you are communicating to, and not insensitive to other publics who are likely to hear what you said anyway.

For Ailes, whom I generally like, unless his objective was to have the debate canceled, he only considered one of these three elements. Sure, what he said might convey how he really feels, but it always helps to remember that being honest and overly opinionated are two different things.

Chasing Tails: Schrödinger's Cat

Every now and again, I reference seemingly unrelated topics (psychology, philosophy, quantum physics, and even theology among them) and then attempt to apply them to communication. To me, they fit together. Others disagree, and that is okay.

Recently, I referenced quantum physics in a response to someone who asked, basically, whether bloggers were obligated to contact the people they post about, especially if there is a perception that the post is critical. It's a good question.

In response, I posted that as someone who has worked as a journalist beyond social media (and occasionally still do), I have often asked myself the same question, but eventually reached the conclusion that no, that argument, while valid, doesn't hold up. From a strict communication perspective, I likened blogs to op-eds, where observations/opinions are made and anyone (on most blogs) have an opportunity to comment (agree/disagree) with equal space or comment (agree/disagree) on their own blog if they prefer. (Besides, I imagine it would be a public relations nightmare to field calls from hundreds of bloggers.)

But I also alluded to the prospect of quantum physics as part of my rationale without explanation. I'd like to take a stab at tying that in, recognizing I am a mere novice on the subject by comparison to probably anybody in that field.

In simplest terms, quantum physicists have long asked whether or not the observation of science could potentially impact the results of what is observed. In other words, does the observation of the atom and its components, quantum and whatnot, alter what they do?

In attempting to address this question, Schrödinger's Cat, proposed by Erwin Schrödinger in 1935, demonstrates the conflict between "what quantum theory tells us is true about the nature and behavior of matter on the microscopic level and what we observe to be true about the nature and behavior of matter on the macroscopic level." Part of the lesson is referred to as the quantum indeterminacy or the observer's paradox: the observation or measurement itself affects an outcome, so that it can never be known what the outcome would have been if it were not observed.

Applying this to communication, I submit that the more direct interaction between a blogger and the subject matter, the more likely the blogger could potentially alter the outcome of any communication study. Sure, I know what some people are thinking right now: if that is true, then could the post itself alter the outcome? Absolutely, but with some limitations.

With the advent of social media, posts are already part of the equation just as traditional media always has been. So, while a post after the fact may or may not alter the outcome, the same information shared privately before any action occurs would almost certainly change the outcome, perhaps negating the future post.

For example, purposely avoiding mention of where this conversation came up, let's say I sent John Edwards an e-mail (I didn't) that said "John, what gives? Your only way out of this communication mess is if the bloggers resign." Let's say he took the advice to heart and those two bloggers resigned the next day, negating the need to send out that ill-advised statement. That would have dramatically altered the case study whereas what I did, write about that case study in real time with my comments bearing no more weight than any others, was simply part of the total communication equation.

So without question, the side effect of transparency or being a public figure changes behavior. Imagine for a moment, Schrödinger's Cat placed in a glass box with hundreds of people shouting conflicting messages that the cat understood. Surely, that will cause a different outcome than Schrödinger prescribed. Yet, in the study of communication and transparency and being a public figure, this is precisely the the environment in which studies are conducted.

Here's another example: will a teenager left alone with a can of beer react differently than if left alone with friends who drink beer or differently if he is left alone with parents who discourage drinking. You bet the outcome will be different, but it will be even more different if we tell the teenager exactly what we intend to do. It is also a possibility that the teenager who learns they were observed after the fact might react differently the next time out, but that is the very essence of a learning process.

Please, if you are one of the handful of people who regularly read this blog, keep in mind that I rarely if ever have any opinion about a subject beyond their behavior unless specifically noted. Case in point: whether Verizon is a good company or bad company is irrelevant on this blog (though I am a Verizon customer with no cause to change plans). What is relevant is that I disagreed with certain aspects of the company's communication, which I write about here for very specific reasons, including: public relations students who attend my class or anyone hoping to glean a different, hopefully interesting, perspective on communication.

In simplest terms, I believe there are two ways to learn something. One is the hard way by doing and making mistakes (or perhaps doing it right). One is the easy way, which is by learning from others who already did it the hard way. It is my hope by focusing on best practices and more often worst examples that more people can learn the easy way.

In conclusion, if you or your company is the subject of a post here, you are welcome to post comments or e-mail me (if you prefer private correspondence) like anyone as I will not be contacting you (simply put, pre-post advice is reserved for clients). However, I am always happy to correct any misinformation, clarify a point, listen to your opinion, or whatever; whereas I am equally obliged to disagree if there is cause under certain circumstances.

Working In A Bubble

There has been ample discussion about transparency, as it relates to blogs in particular, but it seems to me corporate transparency is optional, and best left to the discretion of each individual company. You see, I don't subscribe to the notion CEOs shouldn't blog. I think it depends on the CEO and, more importantly, the company's business strategy.

It seems to me the only problem with corporate transparency is the number of CEOs that try it without really understanding what it means. Worse, few consider that working in a bubble might be a different environment all together, becoming a public figure aside.

Maybe the answer to the question, whether to blog or not, lies within a seemingly unrelated question. How prepared are we to manage our reputation once we gain transparent visibility?

It's tricky stuff, doubly so if you have any hope to keep your message consistent. Here are 8 basic questions (I collected them from several experts and executives over the years) to ask about your corporate reputation management, adjusted a bit to skew toward CEO blogs.

1. Can you keep your focus narrow and potential issues manageable?
2. Are you willing to take responsibility (not necessarily accountability) for all employee actions and outcomes, even those outside of your control?
3. Will you maintain a positive, assertive, calm communication style that focuses attention on the most important aspects of any problem?
4. Are you willing to move toward resolution despite any negativity, including antagonistic reporters and crazy bloggers?
5. Are you ready to concede that if your local disaster becomes regional or national, that it is totally your doing?
6. Do you realize that your actions and posts will influence those around you and have an impact on your reputation and the company?
7. Are you prepared to answer tough, probing, and sometimes trick questions from not only the media but also anyone who happens by?
8. Are you willing to share your ideas internally or with consultants prior to posting in order to ensure everyone is on the same page?

If you answer no to any of these questions, then you should probably stay out of the business of blogging. Of course, if you answer no to any of these questions, your company is operating without any concern for reputation management anyway, and sooner or later you'll learn the hard way (these questions apply to picking a company spokesperson too).

Having worked with CEOs and, even more maverick, politicians, I can safely say that the decision to be transparent or blog is an individual question. As many as I have advised to blog, there are dozens more I have advised not to blog. For each, I base my advice on whether it makes strategic sense for the company and if the CEO (or anyone for that matter) is fit to be a blogger.

Or perhaps I shouldn't say "blogger" given the industry push to change the term. What is a blog? Seems to be a lot things to a lot of people, and I don't think narrowing the definition will change that.

Of course, if we are all going to make our companies "bubbles," I propose a new occupational title: "window washer." Just kidding.

Managing Bad News

Happy New Year!

Last week, I offered to provide some basics in managing bad news when faced with a situation like Jobster as part of a living case study in communication. (Spoiler: If you're looking for dirt, I am sorry to disappoint. You can find plenty of nastiness on Jobster's own blog.)

Perhaps James E. Lukaszewski, APR, of The Lukaszewski Group (one of the most quoted crisis communication management consultants and prolific authors in the field), said it best during his speech to the Canadian Investor Relations Institute in 2001: In the era of instant communication, people will likely bet against you when trouble comes. "Your ability to understand and communicate with confidence in real time with constituents will be the key to winning the perception struggle that crisis always creates," he said.

He is spot on of course. With the exception of crime, malfeasance, or environmental catastrophe, most crisis communication situations are all about perception, and this seems to be the area where Jobster has struggled the most.

You see, downsizing, unfortunately, is part of business when companies are not performing as expected. There is nothing wrong with it, other than the unfortunate impact it has on people. Most people understand this and most CEOs lament the decision, which means companies are generally judged solely on management's handling of layoffs. This is also why I suspect Jason Goldberg's decision to blog about upcoming changes before clearly communicating all the details to employees (just prior to the holidays) was met with such widespread criticism.

Why? First and foremost, he didn't seem to understand he was in a crisis communication situation. Usually, crisis communication situations are identified by one of the following: a dramatic drop in stock prices, a member of management is indicted, outside activists attack the company, acquisitions/mergers/takeovers, anti-corporate government action, and the one that is hardest to identify but best applies here — founded and unfounded rumor.

It doesn't make a difference whether a rumor is founded or unfounded, both can have equal impact on a company's reputation and it is up to a CEO to manage them, with or without the advice of communication specialists (not necessarily public relations practitioners). If they do not, they run the risk of demonstrating that they are not leaders, but simply managers. The difference is that managers generally run an organization by the numbers (try to make the forecast or exceed it at all costs) whereas leaders lead through inspiration, motivation, strategic vision, and people management.

When faced with bad news or a crisis, assuming management recognizes it as such, the best leaders will always consider the following (a sliver from my playbook) once the founded or unfounded rumor surfaces:

• Talk about it as soon as possible.
• Tell the whole truth, even if it means bad news, negligence, or wrongdoing.
• Be clear and concise, addressing details without obscuring the situation.
• Offer full disclosure of all relevant facts, history, and related information.
• Demonstrate empathy or remorse as appropriate to the situation.

By all counts, it seems to me that Jobster did none of these things. They did not seem to consider that, in today's world, communication has an impact on ALL company publics very quickly (employees, shareholders, media members, customers, etc.) and each of these publics will react to information differently. They did not seem to consider most people have gut reactions before listening to the facts and background or waiting for post-holiday explanations. They did not seem to consider that all information, no matter how contained it seems, will eventually be released by someone. And they did not seem to consider that the media, people like the Seattle Times, will frequently turn to additional sources for opinions and comments when management avoids an issue, which could further erode the reputation of the company.

Suffice to say, even if Jobster finds a way to keep every employee (I hope they do, and am sorry if they don't), how the rumor and supporting evidence was managed will still have a negative impact on the company, especially on employee relations. Sure, they don't teach most of this in many MBA programs, but the most experienced leaders in today's business world learn it anyway, either the easy way from "handlers" as they are called by Goldberg, or the hard way.

Given that reputation damage most often occurs from the inside out, I sincerely hope others learn from this living case study. History does not have to repeat, even though it almost always does. Companies are fragile things. Treat them wisely.

In conclusion, I would like to mention that there has been much criticism over whether people should be discussing Jobster at all. Sorry, but I have to disagree. Jobster executives and team leaders have to appreciate that no one but no one gets to choose what others find newsworthy or interesting. On the contrary, you invited bloggers and members of the media to take an interest in the company from day one. You cannot "uninvite" them.

That, in essence, is what public relations (just one aspect of strategic communication) is all about. It's about managing communication, perception, and reputation in good times and in bad. Never should a company expect one without the other. That would be silly.

Knowing When To Post

Jason Goldberg is an Internet pioneer of sorts, not only for developing Jobster (one of the first employee recruitment search engines), but also for starting one of the first truly transparent corporate blogs three years ago. It has never been as polished as some corporate blogs, but Goldberg seems to prefer it that way and it seemed to work, er, until now.

The main reason Jobster has suddenly resurfaced on everyone's radar is because the company, the biggest new Internet company in Seattle, recently instituted a hiring freeze, which venture blog writer John Cook says is a sign that the company may have grown too big too fast. Shortly after, rumors began to surface that the 145-person company would announce significant layoffs.

Although a minor communication crisis was already brewing, Goldberg made it big with a post that asked people to "put down your pencils .... calm it down, relax a bit, and have a nice holiday. We've got no news to give ya before the new year."

From an internal communication perspective, posting this was paramount to the captain of the Titanic asking passengers to refrain from dropping lifeboats in the water until the ship's quartet finished his favorite song. To make matters worse, Goldberg added a post to justify Jobster's future decision to focus on profits in 2007. And again, he asked people to wait for answers.

"why would a young company like jobster care about profits? hmmm... vs. many of the dot com companies not too long ago who didn't? many answers to provide here ... will have to wait for now. but in the meantime I will point to a few big things ..." and goes on to list four of them.

No, there is nothing wrong with streamlining a company to become more profitable, but it is usually a good idea to let your employees know before the rest of the world. Not to mention, asking them to "have nice holidays" before facing major layoffs is almost too painful to post about.

Will there really be layoffs? According to an e-mail, again published by Cook, Goldberg writes: "What I can say is that the changes we will make are 100 percent voluntary and (management) proposed (versus) board dictated."

All this news and continuing updates from Cook has created a second wave of criticism about Goldberg and Jobster. It's unfortunate because this could have been handled better. One of the first golden rules of any crisis communication situation is to deal with the most urgent and critical matters as early as possible. In doing so, the spokesperson or CEO must be direct, decisive, and empathetic to anyone who could be negatively affected by the bad news.

Instead, Goldberg, apparently panicked and without the aid of a seasoned communication professional, wrote from his Blackberry: "I made a personal pledge to be a very public and open CEO, knowing that it could come back to bite me sometimes. I promised to speak my mind and provoke and prod the industry a bit, again knowing that it could open me up to greater criticism and sometimes backfire."

He went on to encourage his readers to read all about the "beating" he received from comments made by anonymous posters on Cook's blog. "Rather than run from it, I encourage folks to go read it."

Um, Mr. Goldberg, please, please stop throwing kerosene on the deck of your sinking ship and you just might save it yet. You see, there is a difference between being a very public and open CEO and one who is empathetic to his employees, investors, and fans.

Lesson for today: Don't tease with bad news, lead with it. It's not fun, but at least it's manageable.

Restoring Public Trust

MarketWatch correspondent Thomas Kostigen released his top ten ethics breaches for 2005 last month, demonstrating once again that public leaders and companies that use communication as a means to manipulate will eventually be unmasked.

Five highlights from his list include: former Enron CEO Kenneth Lay for the rationalization campaign that he is not the face of corporate corruption; former FEMA director Michael Brown for blaming Hurricane Katrina failures on New Orleans residents; president of J. Paul Getty Trust Barry Muntz for alleged abuses of nonprofit funds to enhance his lifestyle; Exxon for ignoring shareholders' resolutions calling for it to admit carbon emissions contribute to global warming; and the American Red Cross for making us skeptical of charitable giving after workers allegedly bilked money from Hurricane Katrina victims.

Regardless of any personal opinions that surround these examples, there is little doubt that all of them have contributed to the continued erosion of public trust among private and public organizations. As a result, they reinforce the need for the public and private sector to adopt action models that either restore or preserve trust in the minds and hearts of the public.

One such action model developed by the Public Relations Coalition (a partnership of 19 major organizations representing public relations, investor relations, public affairs, and related communication disciplines) in 2003 still serves as an effective roadmap for creating an environment of accountability. Key points within the document called on corporate leaders to:

• Articulate a set of ethical principles that are closely connected to their core values and business processes and are supported with deep management commitment and enterprise-wide discipline.

• Create a process for transparency and disclosure that is appropriate for their company and industry in both current and future operations, including oversight committees, culture audits, and consistent messaging.

• Make trust and ethics a board-level corporate governance issue and establish a formal system of measuring trust that touches all parts of the organization.

Simply put: establish standards and adhere to them; encourage open communication and timely disclosure; and develop the appropriate mechanism to measure progress. It makes sense. Most breakdowns in trust occur not because of true ethical breach within the company but rather when the organization or its leadership seem to be shrouded under a veil of secrecy or are responsible for inconsistent/inaccurate messaging. In other words, sometimes it is not what you are saying, but what you haven't said that will determine how well your organization preserves public trust every day and during times of crisis.

Making A Mountain Of Lies

It was no surprise to me to learn that scientists on the nuclear waste project in Nevada fabricated their quality assurance reports. As a junior in college, majoring in journalism, I wrote an article about the Yucca Mountain project in 1990. It was prompted by a comment made by one of the presenters at the first public forum held in Reno, Nev.

The presenter stated to a group of 50 residents that spent nuclear pellets were ''safe enough to hold in your hand.'' It was a lie, the first of what would later become a 15-year mountain of deception from the U. S. Department of Energy, an agency with a long track record of lies.

The newest batch of fabrications and cover-up tactics were recently released in a 90-page collection of e-mails uncovered by a subcommittee headed by Rep. Jon Porter, R-Nev. One e-mail highlighted by the Las Vegas Review-Journal states: ''I've made up the dates and names. ... If they need more proof I will be happy to make up more stuff.''

It's scary stuff to think people entrusted with the transportation and storage of deadly nuclear waste would lie. And it's equally scary to me that we continue to see a growing number of people — public figures and politicians — who seem grossly ignorant of how to remedy their own dishonesty. They should take the time to know. After all, it seems to me that most severe credibility damage is never the initial fabrication but in how truth is handled when it finally comes to light.

More often than not, modern liars will attempt to cover up the lie or somehow attempt to minimize it with invalid justifications. This flawed tactic leads to more lies, half-truths, or demands of privacy (usually to protect other lies that have yet to be uncovered), which inevitably leads to complete self-destruction. They eventually lose everything instead of simply taking responsibility for what is sometimes a much lighter infraction. The motivation, of course, is fear. Someone caught in a lie is afraid of the consequences so they will do anything and everything to cover it up, which only makes it worse.

The best remedy to prevent such a catastrophe is to make it a point to never lie. Ethics 101. Professional communicators engage in truthful, accurate and fair communication that facilitates respect and mutual understanding. The ''spin'' factor does not apply.

However, since we all know people are human and are often tempted to do the wrong thing, it might be helpful to know the only strategy that truly succeeds at remedying the wrong done to others by perpetuating lies. First and foremost, stop it. At some point, the lies have to stop or they and any cover up will consume your life until you won't even know who you are anymore.

Second, admit the mistake and the lie(s), recognizing your wrongdoing, and promptly correct any erroneous communication for which you are responsible. This is your one and only opportunity to come clean by providing full disclosure of any related misdeeds and lies. The smallest details matter. If you don't move to voluntary offer full disclosure, you risk losing even more credibility when related lies are uncovered (they always are) or in demanding partial secrecy (as the person asking for a second chance, you must give up your right to make demands).

Third, make a real effort to undo any damage caused. It is not enough to admit the mistake, demonstrate remorse, and promise to never do it again. Inevitably, when someone lies, people suffer. And even if no amount of positive action may ever truly heal the damage caused, it remains the burden of the liar to do everything possible to remedy or minimize the damage done to the people they hurt.

Fourth, volunteer to be transparent, forgoing secrets or privacy for some undefined period of time, which is usually dependent on the severity of the misdeed and the number of lies that followed. Open and honest communication is the only way to restore credibility and trust. If you make continued demands for privacy, it only reinforces the idea that you have more to hide from the people who suffered. In time, you may be trusted again.

Fifth, promise to never lie again (not only to the people you lied to, but to yourself), exonerate the victims (most lies and cover ups involve discrediting the victims), and always guide others to making better life choices. In short, let your example, provided it does not hurt or embarrass someone, help other people avoid making the same mistake.

It is almost never the error, but in how we handle the error that defines our character and public perception. So in the months ahead, it will be no surprise to me if some proponents of Yucca Mountain attempt to do exactly the opposite of what I outlined above. Most will be too afraid to attempt such a remedy. After all, they weren't brave enough to face the truth to begin with, which is exactly why they resorted to one lie, and then a mountain of them.