Catching Flack

So GM and Chrysler say they “get it” and that their CEOs won’t be flying in corporate jets when they return to DC this week for Round Two of begging/arm-twisting/cajoling/blackmailing Congress into forking over billions of dollars to their companies. (Ford hasn’t said yet what its CEO will do to get to Washington)

“We’ve gotten the message,” said GM spokesperson Tom Wilkinson.

Really? News reports out of Detroit suggest that so far, all they have “gotten” is that it would be beyond dumb to show up in Washington aboard three separate corporate jets, which cost about $20,000 each for a round-trip from the Motor City.

I’m not sure they’ve “gotten” the message that Congress and especially the public wants to see and hear a lot more from the Big Three than “give us the money or we’ll ef-up the country by going bankrupt.”

So I’m going to make believe for a moment that I’m sitting in a conference room at GM or Chrysler being asked to give my best PR advice on how to get the public on our side going into these hearings:

• Drive from Detroit to DC in Ford/GM/Chrysler cars or trucks!! This is the biggest no-brainer of all time.
• Get dealers, suppliers, union men and women, and multi-generation car owners to join your caravan.
• Drive through as many Congressional districts as you can on the way and stop once or twice in each to make note of the auto industry’s impact on that area.
• Send out PR info to Big Three dealers and other auto-related businesses across the country in every other Congressional district giving them talking points and simple PR guidance on how to get local coverage of the impact that the Big Three have in their town.
• Suspend all new car advertising — all of it! — for the 48 hours prior to the hearing, and replace it with heart-rending stories of Big Three employees, suppliers and car owners who would be hurt if the companies were to go under.
• When you get to Washington, have an awesome press conference on the steps of the Capitol with all your constituencies present, and make your case for the bailout, using as many personal stories as possible.

Oh, and one more thing: have an actual plausible plan that everyone can grasp about how you will use the money to stave off bankruptcy and get your companies back on the right track.

Here’s a quick report on the poll we did a couple of weeks ago on possible PR budget cutbacks in 2009.

We didn’t get a robust response, but the trend was unmistakable:

• 73% of agency respondents said they had heard about client-side PR budget cutbacks
• 53% of client-side respondents said they were cutting their budget going into 2009; 32% said no, they weren’t, and 16% said they hadn’t decided yet.

As a contractor myself, I’m cheered by the fact that about 1/3 of internal budgets aren’t dropping going into 2009. That’s at least a glimmer of hope. And I think as an industry indicator, it could mean that industrywide budget cutbacks may not be as severe as some are predicting.

The phone rings. It’s the boss and there’s a crisis. Now’s your chance to shine — or be permanently relegated to the scrap heap. What should you do?

Here’s what:

• Be prepared to give solid advice on the spot. “I’ll get back to you” is the kiss of death.
• Give the boss options, not just your preferred idea. Bosses like to have options and make decisions. They don’t like being told what to do.
• Tell the boss things they don’t already know. Duh!
• Be prepared to outline next steps.

Tips courtesy of Jim Lukaszewski, the crisis guru. He’s got a new book out called, “Why Should the Boss Listen to You? The Seven Disciplines of the Trusted Advisor.”

Here’s your PR tip of the week: write yourself a page of new messages that include the phrase “because of the bad economy…”

As in, “Our revenues are flat because of the bad economy.” Or, “We have to lay off people because of the bad economy…”

Now, I’m not making fun of companies that are really having serious economic problems as a result of the increasingly perilous economy. But I’m skeptical of companies that are starting to roll out “bad economy” as an all-purpose excuse for whatever goes wrong.

Take Circuit City, for example, which filed for bankruptcy protection Monday. It has been a far less well-managed chain than its main competitors, mainly Best Buy and Wal-Mart, for years, during the good times and now the bad. So it was far than just the “bad economy” that felled Circuit City. But I didn’t hear anything about “poor management” in the post mortem about the chain.

Of course, it’s convenient and easy to blame the economy rather than taking a look in the mirror.

But I caution you to use the all-purpose excuse sparingly.

Why?

Because it’s a credibility killer.

Sure, it’s a tough economy right now. But the economy isn’t to blame for everything. So if you use ‘the excuse’ and it turns out not to be true, it will make you look foolish. And less believable.

People are starting to make budgets for 2009 spending, and the conventional wisdom is that corporate spending will be cut, whether that company is starting to see actual business declines or not. We’re in that weird period of the cycle when there is more uncertainty than certainty, and so corporate bosses go into “better safe than sorry” mode.

Even CEO-of-the-Universe Eric Schmidt of Google says they are feeling the pinch. In a Saturday New York Times interview, Schmidt said Google is starting to look for ways to trim expenses in anticipation of a potential advertising slow down.

Schmidt: The issue we face with the economic crisis is we don’t know as managers how long the crisis goes. So what is a prudent answer? A prudent answer is to watch hiring. We are hiring but at a slower rate. Last week, we made some number of tens of offers. I suspect that will continue. The other thing we have done is fairly detailed expense reviews to make sure we are not wasting money.

So let’s share some information here on the Catching Flack blog.

There are two polls below, one for people who have PR budgets (Client poll) and one for those who seek contracts with people with PR budgets (Agency poll).

What we want to know is this: are you starting to see budget cutbacks at your corporation or other enterprise, or are you starting to feel them or plan for them if you are on the agency side?

Please share your market knowledge in the comments section as well voting in your poll.

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There’s no hiding in the Internet era, especially if you are a company with a tech-savvy employee base. According to a very interesting article in today’s New York Times, companies are now being forced to write blog posts about things like layoffs as soon as they happen:

Blogging about staff cuts is particularly prevalent in Silicon Valley, where tech gossip sites pounce on every rumor and Web-savvy employees broadcast their every thought on personal blogs and Twitter feeds. Companies feel pressure to break bad news on their own blogs so that they can better control the message.

However, experts in human resources and public relations say it is only a matter of time before companies of all sizes and in all industries will feel compelled to blog about painful news.

“Control the message.” I put that in bold above. Either you control your message (as best you can) or other people will do it for you. That was true before the Internet but it’s especially true now and going forward.

This requires a new mindset, if you don’t already have one. And it probably takes practice. Here’s the drill:

• Think hard about what other people might find interesting about your company
• Be honest about whether they are likely to blog about it or release it in some other way
• If there’s any chance it could come out (and assume there is), get your messages together and figure out a way to get ahead of the story and tell it your way, rather than reacting to what other people say

Is there any cheaper marketing strategy than word-of-mouth? You get people talking, and they go out and sell your product or service for you. Perfect for recessionary times.

Of course, it’s not nearly that simple or necessarily that effective, but it certainly can be a frugal way to stretch your marketing budget.

So as my contribution to your zero-budget marketing program, here are some tips gleaned from a recent Bulldog Reporter audio conference on word-of-mouth (WOM) marketing:

• WOM Marketing = giving people a reason to talk about you and your stuff, and making it easier for the conversation to take place
• What can you get people to talk about? Something they would be willing to tell a friend. So the way to develop WOM messages is to test them against a very simple standard: would anyone tell their friend about this?

The 5 Ts of WOM:

• Talkers: people who talk about you (duh!)
• Topics: what are they talking about
• Tools: how are you making it easy for them to talk about you?
• Taking part: participating
• Tracking: measuring your WOM impact

How do you know it will work? It’s hard to do that in advance. Trial-and-error is probably best. So the advice is to try a new little WOM strategy every week, and see what hits — then do more of that and less of the things that don’t work.

Resources:

Word of Mouth Marketing Association

Word of Mouth Marketing — the book

My thanks to Andy Sernovitz, Bob Pearson and Mike Manuel for a highly entertaining and informative audio conference.

As much as anything, what people are craving right now is some guidance on what to say to employees, customers, partners, the media and others about how the financial crisis is impacting their business. Unless you work on Wall Street, what’s been going on is largely a mystery, and unless it has walloped you directly, it’s a little hard to know what to say about it. Any help is appreciated.

This blog has already offered some guidance, but here’s some more: an excellent new white paper from Waggener Edstrom called “The Communications Impact of Financial Turmoil.”

It’s a quick five-page read and I recommend you download it and read the whole thing. But here’s the kicker at the end, titled “What we are recommending to our clients:”

• Most importantly, stay focused on the long term. This crisis will pass; there will be fallout, but the globaleconomy will continue on. This is an opportune time to broaden interaction with stakeholders; to think globally; and to begin employing innovative communications tools such as social networking and online strategies, to support corporate business goals and strengthen those critical stakeholder ties.
• This is not a good time to cut back on employee communications. In fact, constant and open dialogue between company leaders and employees is essential during times of uncertainty. Clearly all of this external communications needs to map as well to internal communications —both formal and informal. Senior management will want to understand this media dynamic and why story lines are being altered — but broader employee communication will be of value in maintaining morale and helping the company as a whole understand how its story is being told in a media climate that is lunging from headline to headline. Now is the time for CEOs to be more visible than ever before, not less
• Utilize every communications channel. Organizations need to move beyond (but not exclude) traditional media communications. This includes a heavy focus on direct stakeholder interaction (global citizenship, investor relations, employee communications, to name a few key elements). The use of online and social communications tools, from blogging to tweets, opens up new avenues for organizations to build communications bridges beyond mainstream press.
• Be authentic. Not just today, but every day. Transparency and global citizenship are increasing in importance every day, and are key differentiators in the marketplace. Given the current degree of media scrutiny and public skepticism over the motives behind corporate behavior and performance, an organization’s activities — and to whom and how they are communicated — must be ethical, authentic and credible. Indeed, we believe that authenticity will become the single biggest defining factor for successful corporations and those who lead them into the future.

Luckily for most of us, the global financial crisis is affecting us indirectly. Sure, home values may be down and our 401(k)s may now only be “201(k)s,” but those are paper losses. Thus far, the rest of the economy hasn’t really caught Wall Street’s flu.

Nevertheless, it’s an edgy time, a near-crisis that any date could spill over into the broader economy. So at this time, what should business leaders do: a) hunker down and adopt a siege mentality or b) communicate with key constituencies, including employees, investors and customers?

Duh — the answer of course is b).

But are America’s overpaid CEOs following this advice? What do you think? Check out this blog entry from ReputationXchange.com about the survey they released today:

We surveyed employed Americans about the financial upheaval and asked them how satisfied they are with their leadership’s communications.

In short, we learned that working Americans are not hearing enough from senior leaders about the global financial crisis.

In fact, a huge 70% expect the current economic problems in the U.S. is going to have a negative impact on the company they work for over the next year. Of those, 26% believe their company will have lay offs and 62% said their company will have trouble meeting goals.

These survey findings highlight a genuine leadership deficit! A hefty 71% of people felt that their company’s leadership should be communicating more about current economic problems, and 54% have not heard from company leaders at all on the impact of the financial crisis on their company.

This is pathetic — really. Luckily, there’s still time for leaders to do something. Assemble your comms team, figure out what to say and then say it! Call an all-hands meeting, post it on your blog, do a voicemail blast — whatever floats your boat. But speak up!

With all the financial and political news dominating the headlines, there’s a school of thought that marketers should consider delaying announcements until a better time.

My verdict: there will be no better time.

Not because I think the current crisis will not end, but because you can’t stop doing your job and keeping your business moving forward. As far as I can tell, only a small slice of the economy is directly affected by the Wall Street crisis — financial services companies and people who need ready access to credit — and so far, most businesses are not suffering or being adversely affected directly by the crisis.

So why wait? Yes, one can generalize that many people are distracted by the election and the meltdown, but it’s not like they can’t focus on anything else, especially if it’s something germane to their business or career.

Furthermore, and this may be the most important point: if things do get worse before they get better, you’re going to wish that you had kicked off that campaign or launched that new initiative now, before things got really bad. So get busy!

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Update: BNET guest blogger and Stanford b-school prof Jeffrey Pfeffer weighs in on the “Corner Office” perspective on this post.