Directorship
We wrote the following article which appeared in Directorship magazine, a publication that circulates among the 11,000 directors of U.S. public companies:
Corporate Reputation in the Age of Media Chaos
About This Blog
Because we've had extensive experience in major national newsrooms we view news developments in a somewhat different manner than many communications consultants; we see the news through the same lens as working journalists.
Our blog provides analysis of how recent news developments were handled or mishandled by the principal actors and their advisers. Who handled the press attention well? Who did not? How might they have fared better?
We will bestow the M.E. Communications Partners WMD (Worst Media Debacle) award in timely fashion to those we regard as the worst performers.
Archives
Jesse Should Know Better
Let’s call it The Jesse Jackson Lesson.
And it goes like this: Even the most savvy, experienced, successful, practitioners of the oratorical arts – including icons in the private & public sector, spokespeople for major corporations, and candidates running for high & low office – need an internal steering mechanism by which they can control what they say & how they say it; and a braking mechanism to halt an occasional tendency to pop off and say something that’s self destructive or seriously muddies and confuses the message being delivered. You’d think by now Reverend Jackson, one of the most experienced and sometimes controversial communicators of our time would conduct himself as if a live microphone, camera or note taker were always present to capture his words or track his conduct. It’s a basic line of defense that’s especially necessary in the modern Blogosphere, where everybody or anybody carrying a cell phone can turn into a ‘gotcha journalist.’ Paranoia is a sensible practice. They are all out to get you.
M.E. Communications Partners provides its clients, many of whom are top corporate executives, with a set of instructive methods by which they can avoid pressing the self destruct button by uttering callous, insensitive or incendiary remarks. It can’t happen to you? You’re too experienced, polished and clever? That’s what Jesse Jackson thought.
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Gramm cracked
That adviser was/is Phil Gramm the former powerhouse U.S. senator from Texas and long time friend of the GOP presidential candidate. In an unguarded moment recently he called the nation his pal is eager to become president of "a nation of whiners." McCain quickly distanced himself from Gramm saying, "He doesn't speak for me." Though he had been speaking for him on economic matters the day before.
In any case it was too late, the crack about whiners had already been mediaized. That is it was being chewed over on a slow news day by talkmeisters, cable news anchors and bloggers.
Lesson learned: there are no unguarded moments anymore. Someone with a tape recorder, cell phone or just a pen, paper and a good set of ears is always around especially in this political season. All moments henceforth need to be guarded. And people who think the microphone, any microphone, is off ought to check with Jesse Jackson before they crack wise.
That's a lesson we stress to our clients. You don't have to be a national political figure to find a careless remark suddenly posted online. Think before you speak. Web-savvy readers - and that's just about everyone it seems - are constantly on the prowl for new ammunition in the word battle that helps feed the 24 hour news cycle.
How Rove Did It
Rove has made a reputation as a master media manipulator and image fashioner, a reputation he has carefully crafted and managed with care. Nothing testifies to that mastery more than the manner in which he chose to announce his resignation. He called in the editor of the editorial page of The Wall Street Journal, Paul Gigot, a conservative ally. Together they sat in the "book lined study" of Rove's Washington home on Saturday afternoon. And that's when he dropped the bombshell that has captured the headlines today (August 13).
So what's new here?
So what's the takeaway from what is otherwise an interesting though hardly unprecedented story of a White House staffer heading for the exit as the administration nears the end?
Just this: the timing of his announcement was a master stroke because, you see, The Wall Street Journal has no Sunday edition. By choosing to reveal his decision to Gigot on a Saturday afternoon he gave his interlocuter the gift of time, the most precious gift a journalist can receive. With a hot story that surely wouldn't hold long, Gigot had a full day to write a long and thoughtful piece where any other journalist would have been rushing to meet a deadline. And by choosing to drop his news on Gigot, editor of the page that is the bible of the conservative movement, the daily must-read, Rove guaranteed that he would get good play. And he did. The piece stretches across the top of the op-ed page well above the fold where no one can miss it.
So Rove gets to display his skill as a media manipulator as he no doubt prepares to join the ranks of the K Street commandos, the lobbyists and image makers who pass through the capital's revolving door en route to private riches. And as he does so he has managed to post a powerful advertisement for himself.
Frankly Speaking...
It’s as bad as beginning an answer with: “Truthfully…”
M.E. Communications Partners – with apologies to David Letterman - shares a top ten list with its clients: The Top Ten Words & Phrases to Avoid. And frankly tops that list.
Was there ever a time when frankly did seem appropriate to me? Yes. When Rhett Butler put it to Scarlett O’Hara in the film classic Gone with the Wind. “Frankly my dear, I don’t give a damn.”
We counsel our clients to give a damn about language. We teach them to be colorful but precise. Otherwise they risk being misunderstood or misinterpreted which in the world of the blogosphere and the 24 hour news cycle can be very damaging, if not fatal.
Living in the spotlight
Then he saved the Salt Lake City Olympics when corruption charges and mismanagement had put the games in jeopardy.
Although he lost his first political race - an ill considered attempt to beat Ted Kennedy for a seat in the U.S. Senate - he later won the Massachusetts governors office, a Republican in the bluest of blue states.
My point in all this is that Mitt Romney, no matter what your politics, has been a success in everything he's done in life. The presidency? That's another matter, but Mitt Romney's credentials as a public figure make him worth listening to on the hazards of living in the spotlight.
So something he said last week resonated with me.
Running in the YouTube era
In a somewhat cool appraisal by The New York Times of his performance so far in the Republican primary pack Romney, perhaps haunted by his father's famous "I was brainwashed" statement during his own run for the presidency four decades ago, said, "Running for president in the YouTube era, you realize you have to be very judicious in what you say. You have to be careful with your humor. You have to recognize that anytime you're running for the presidency of the United States, you're on."
Romney spoke from experience; he has had an especially difficult time explaining video clips from a 1994 debate with Kennedy in which he took positions on gay rights and abortion that are anathema to GOP primary voters. Political opponents gleefully posted them on YouTube shortly after he got in the presidential race.
But in last week's interview I think he was talking more about the kind of off hand remark, the attempt at humor, the thoughtless gesture that all of us make from time to time, rather than big policy statements.
Twenty first century business executives, especially those on the c-suite level, don't have to endure the spotlight focused on a presidential candidate of course, but they should understand that the spotlight is always on them too. The price of a casual but poorly chosen remark, is high.
Mort and I learned all about that during our network news days. Live network television allows no room for error.
In today's demanding business world, everyone is subject to the same pressures that once affected only those willing to put themselves in the public spotlight. Angry emails, smutty humor, casual but cutting remarks can live a long time on someone's hard drive.
You can't unGoogle yourself.
TJX and the biggest heist ever
No one knows exactly how many of TJX's customer identities have been stolen. The company says the number is in the millions, at least 45.7 million but it could be more. Whatever the number security experts think it's the biggest security breach ever.
How did this happen to a successful company with $17billion in sales and 120,000 employees manning 2500 retail stores in the U.S., Canada, Ireland and the U.K. retailing under the T.J. Maxx, Marshall's, Bob's Stores and other brand names?
It appears that hackers started to drain what the company naively thought was secure information about customer transactions as far back as July 2005, then again from mid-May of last year to January of this year. Some of the customer information stolen may have dated to transactions that occurred as far back as January 2003 according to an SEC filing. Apparently no customer information was stolen after December 18, 2006, that's when the company first found that its computer security had been compromised -- at least 17 months after the initial breach. "These guys perpetrated a perfect crime", one computer security expert told The Boston Globe.
TWO WEEKS PASS BEFORE CUSTOMERS LEARN THE NEWS
The next day two security companies were brought in to figure out what was going on and by December 21 they had established that a hacker was active in the company's system. On December 27 the company knew customer data had been stolen. But it wasn't until January 13 that TJX went public, more than two weeks after it knew that its customers were at risk and only after journalists had gotten on their case. The most recent statement issued in late February by CEO Carol Meyrowitz contains her sincere apology but doesn't admit to any company responsibility.
And TJX has been slow to reach out to the millions of customers whose credit information may have been compromised. It did say in the SEC filing that 455,000 customers whose drivers license information may have been compromised will receive a letter from the company. No word on the other 45 million.
Some customers have complained that they first heard from their credit card company and not from TJX that their information might have been hacked. Presumably the company knows who its customers are so why not a letter to every one?
TJX DIDN'T MEET MASTERCARD'S STANDARDS
Maybe a clue is in the statement last Feb 21 by MasterCard International Inc. that at the time of the breach TJX did not meet the security standards set by the card company. A TJX spokeswoman declined to respond to MasterCard's charge. Earlier The Wall Street Journal reported that TJX was not compliant with the security standards the payment card industry requires of anyone who handles card numbers electronically.TJX faces an investigation by the Federal Trade Commission and perhaps other state government agencies, scores of law suits including one by the Arkansas Carpenters Pension Fund that wants access to all records showing how TJX handled data security.
In fairness only about 40% of companies that handle credit cards are in compliance but it boggles the mind that a company with sales of more than $1Billion a month would have failed to comply.
Here's our thought on this one: When a company gets into trouble the remedy begins with disclosure, not stonewalling which it appears TJX has adopted as its strategy. CEO Meyrowitz, whose recent compensation was $8.5M, will regret she wasn't more forthcoming the day she testifies before a Congressional committee.
If only she had complied with her company's code of ethics for executives one of which says, "Provide constituents with information that is accurate, complete, objective, relevant, timely and understandable."
Constituents? Guess that includes customers.
Our WMD: Halliburton's Dubai Debacle
In announcing the move by CEO David J. Lesar to a new office closer to its customers, the company called the new locale "a corporate headquarters office." It was left to public relations manager Melissa Norcross to explain that Halliburton would remain a U.S. company with its principal office in Houston. But she was too little and too late in the hyper-fast, politically-charged media world we live in. The headline “Halliburton Moves to Dubai” was quickly in print and on the air and that was enough to trigger a barrage of negative comments fired by leading Democratic politicians who accused the company of fleeing ongoing investigations by both the Department of Justice and the Securities and Exchange Commission. The commentators:
- Ubiquitous California Congressman Henry Waxman, described by an aide as thinking about holding hearings on the tax implications of the move.
- Sen. Byron Dorgan, the North Dakota Democrat, in The New York Times, "I want to know, is Halliburton trying to run away from bad publicity on their contracts?" He may have been referring to KBR, Haliburton's military contracts subsidiary, whose logistical support deals in Iraq has landed it in hot water with the Army.
- Senator Hillary Rodham Clinton, "I think it's disgraceful that American companies are more than happy to try to get no-bid contracts, like Halliburton has, and then turn around and say, 'But, you know, we're not going to stay with our chief executive officer, the president of our company in the United States anymore.' "
Ms. Norcross explained that no tax benefits were expected to stem from the move and KBR is being spun off. "Halliburton and KBR are complying with numerous requests for information...regarding KBR's work as Congress fulfills their important oversight responsibilities," she said lamely.
With revenues flat in the American oil patch, it probably made sense to the CFO and the other financial minds around the Halliburton conference table for the company to ramp up its presence in the booming Middle East. Oil companies there are said to have their coffers filled to overflowing thanks to current high energy prices, so they are ready to invest some of their profits in exploring new fields. And that’s where Halliburton comes in. As The Wall Street Journal pointed out, the best new prospects for production are in the Middle East and Africa and the biggest growth in demand for energy is in Asia. So with net income down 40% in the fourth quarter, Halliburton made what looks to be a largely symbolic move by announcing Mr. Lesar's new office address. But it didn't come out that way.
The way this announcement was fumbled makes it safe to assume that neither Ms. Norcross nor anyone else who reads the newspapers was in the room when the relocation decision was made. If she had she might have told all those smart guys in suits to consider that
- Halliburton is in deep trouble in Washington already
- with the presidential election campaign underway, Halliburton has a big 'Kick Me' sign on its back and
- Dick Cheney, who was Halliburton's CEO from 1995-2000, doesn't scare anyone anymore.
The move probably makes sense financially. After all Schlumberger Ltd., Halliburton's biggest competitor, earned two thirds of its net income last year outside North America, according to the Journal. But sometimes financial reasons don't outweigh public policy concerns when it comes time to make major corporate decisions like where the company's boss is going to hang his hat.
Bloggers have had a wonderful time making fun of Halliburton’s announcement, even more than headline hungry politicos. Once an announcement like this is out on the web there’s no taking it back.
Communications strategy was always important for corporations but the arrival of bloggers and the long reach of Google makes it even more important that companies get top notch strategic advice on their communications issues before they float an idea out into the ether. That’s why we think the experience we offer at ME Communications Partners is worth considering before you commit to a course of action that might merit our next WMD award.

