The|Intangibles

Interview in Law Times about Crisis Communication

Law Times (which keeps "keeps Ontario's busy lawyers and corporate counsel up-to-date with developments and trends in Ontario's legal scene") associate editor Robert Todd interviewed me about the Maple Leaf Foods listeriosis crisis.

While I usually refrain from commenting on how crises are being managed by companies with which I am not involved, and I respect the confidentiality of those clients with whom I am working on a crisis or major issue, in this case I felt it was okay to comment since I only had positive things to say about Maple Leaf Foods.   

The article is fair and accurate and provides a good summary of my point of view on the role of legal counsel in a crisis.

Short Sellers as Reputation Watchdogs?

U.S. regulators have banned short selling on as many as 800 stocks, mostly financial services companies. The move is intended to help stabilize capital markets. The jury is out on whether it will have the anticipated effect, with a number of financial columnists questioning whether the move only limits market efficiency (although the recent "efficiency" of capital markets is in doubt anyway).

But Dr.Andrew Tucker of University College of London, who I met over breakfast last June in the U.K., thinks there may be a more interesting problem with limiting short sales. He proposes that we think of short sellers as in essence reputation watchdogs. Dr. Tucker argues that short selling is a method of testing a company's reputation against its market capitalization:

"More surprising is to see regulators defending companies like GE and GM who have much more robust - and more expensively acquired - reputations in place from short sellers. Surely these companies' reputations should be allowed to be tested by the market? If they are not as valuable as their proponents claim, then the sooner found out the better. In which case a lot of senior managers, accountants and PRs have been talking up a share price worth much less than deserved." 

The warning . . . short sellers may be greedy and trade on negative news, but they test the substance of reputation. A company needs to ensure that the claims underlying its reputation track closely to its character, performance and behavior. Don't let the language of reputation stray too far from true value.

Spin and Damn Lies

The accusation leveled against communications and public relations professionals is that what they (we) do is "spin" facts on behalf of clients to evade truth. Anyone who has actually practiced the profession knows that this is in large measure stupid and ahistorical.

To quote myself (for the second time . . .forgive me again) from a previous post on messaging and spin:

"This is nonsense and I have written about it elsewhere. Forgive me if I quote myself from that post:

Messaging to my way of thinking is making a point of view apparent . . .  with simplicity, clarity and force. It is an element of Aristotelian rhetoric and is the foundation of ordinary discourse. Using it on behalf of a client to explain -- truthfully and openly -- a point of view is much less manipulative than juxtaposing a terrifying image with an alarmist headline. Of course, when messages are treated as dogma they can't help but sound like spin."

Two things have led me to reprise the idea: A unique beta website (hat tip to colleague Alan Chumley for bringing it to my attention) called SpinSpotter and an article in The Globe and Mail on the 'L' word in the current Canadian and American elections.

SpinSpotter is "a website and software tool that exposes new spin and bias, misuse of sources, and suspect factual support." You turn on SpinSpotter and it will flag words and phrases in an article that evidence bias, are just recycled phrases from a press release, or favor slant and opinion to reporting. What constitutes "spin" is defined by an advisory group of journalists assembled by the SpinSpotter folks. A computer algorithm allows all users to contribute to the knowledge base of "spin". And truth mongers can share with others their own "spin markers" when they come across an egregious example of the uniquely subjective writing that sometimes passes for reporting today. 

The Globe and Mail story talks about the Democratic Party launching a 'Count the Lies' site which keeps a running tally of the number of lies John McCain tells during his campaign. This may seem redundant since political campaigns are about power not truth, and truth (like civility and decency) is easily sacrificed in politics. But at least the Democrats have given political campaigning its true name.

I love both because they are small proofs that social media and and the web encourage the democratization of ideas and facilitate honesty. And if you need further evidence, Jeremiah Owyang at Forrester has developed (although it isn't clear from his post if he is the progenitor of the concept) a protocol for using Twitter to score the candidates in the first presidential debate on September 26th.

His scoring guide looks like this:

-3 for a personal attack
-2 for a false statement
-1 for avoiding the issue, or not answering the question
+1 for a successful assertion
+2 for a successful counterpoint to opponents assertion
+3 Quotable sound bite

CSR Communication: Web Reporting

I will be posting something over the next week or so, either here or on forceforgood.com, about the value of moving corporate responsibility (CR) reporting to some form of social media facilitated platform rather than the traditional print CR report.

In the mean time, my Washington colleague Chad Tragakis directed me to a report in Environmental Leader from the Natural Marketing Institute which ranks the most effective sources of communication about corporate responsibility programs. Interestingly, the chart below ranks a company's website as a legitimate and effective method of communication on equal footing with reports from independent third parties or independent ratings and well ahead of a company's CSR report:

 More on the implications of this soon.

Tangible Knowledge from Social Media

There are a million "stories" online, and some of them say a lot about the different attributes that now constitute reputation:

Relentless PR, which I guess is a competitor of sorts, each month thanks people who have contributed to the 'conversation' on its collective blog. Because it features a former colleague, Leo Bottary, I have paid more attention to it than I might otherwise . . . and have even commented on posts. But the very fact that my name is included in the list boosts my willingness to put in more time on the blog.

Politeness evidently builds reputation.

The Chicago Tribune featured a piece on Monday about the use of Twitter and other social media tools during Hurricane Gustav. (Hat tip to Mark Shadle for this.) According to the Tribune, "Bloggers said their fascination with the possibilities of using online networks to track the storm and help others was fueled by new technology available to them as well as lingering frustration over the response to Hurricane Katrina three years ago."

People trust those with whom they share social networks, even if they are not "friends" as traditionally understood.

Gerald Barron at Crisisblogger points to a top notch analysis of the impact of social media on corporate reputation and customer behaviour. Michael Hyatt, president and CEO of Thomson Nelson Publishers, blogs about how quickly a brand can be damaged through viral criticism online. In particular, Hyatt talks about how Twitter was used to spread a specific example of poor customer service and uses that as a jumping of point for offering seven lessons for defending a company's reputation and brand in our digital age. The lessons are commonplace (no offence meant Mr. Hyatt.) But the fact they are coming from a CEO might cause others in the C-suite to pause as they consider reputation management strategies.Two lessons that stand out: Respond quickly and admit your mistakes.

As Gerald Barron observes,"The old Chinese proverb needs to be updated: 'It takes a lifetime to build a reputation, a single tweet to destroy it.' "

And below is a nice image from a post (no attribution of the image is given) by Jay Thompson that captures it all:

Lessons in Crisis Management (2)

Purdy Crawford, one of Canada's leading legal counsel, former chairman of the Ontario Government's Crawford Panel on a Single Canadian Securities Regulator, lecturer at Osgoode Hall Law School and University of Toronto Law School and lead negotiator in resolving the asset-backed commercial paper issue in Canada had this to say Saturday about Michael McCain's handling of the Maple Leaf Foods recall crisis:

"I think he is doing all the right things, he and his people, ignoring lawyers and ignoring financial considerations -- to be in a position to re-establish the brand when this gets behind him.

"You can't fight a game like this by saying, 'I can't say anything because the lawyers don't want me to'. He's completely right on this."