Transparency

Friday, May 22, 2009

Transparency webinar: Answers to your questions

Warning: Long post follows!

I conducted a webinar on Wednesday for IABC, sponsored by Thomson Reuters, on “Tactical Transparency” which, not coincidentally, is the title of my latest book.

The on-demand recording of the session is now available; a free registration is required.

I promised to cover the questions that were asked during the session as a blog post. Here goes:

What are the first steps you’d suggest in getting buy-in from senior management to increase transparency with our customers/employees?

Since the mandate for transparency must come from the top, getting their buy-in is critical. In fact, they must make a firm commitment to transparency; otherwise, the initiative is likely to fail. You need to show them that being more transparent is in their own interest, that it will help them sleep better at night.

The best way to start is to demonstrate the consequences of failing to be transparent. Offer up case studies of companies that tried to operate behind closed doors and organizations that hunkered down and offered little when stakeholders were clamoring for information.

Then, show them the fortunes of companies that have adopted a culture of transparency; feel free to use examples from the book, which are plentiful!

Ultimately, you have to speak their language—the language of the bottom line—and offer indisputable evidence that transparency will have a positive impact. Showing companies from your organization’s peer group is always a useful approach.

As for adopting social media, you’ll find most answers in this recording.

How do you prevent hackers or people who want to project a negative image of your business from sabotaging your social media site?

“Hackers” usually refers to people who can hack into your system and change the contents of your site. The precautions you would take for a social media effort are no different from those you’d take for a traditional website. Keep up with the latest software versions (many of the new versions from WordPress, Expression Engine, and others are released specifically to address security issues) and work with IT to make sure your content is as safe as it can be.

As for those who want to project a negative image of your business, always remember that they’re fully capable of doing this on sites other than your own. As Cindi Bigelow (of Bigelow Tea) said (quoted in the presentation), “People are going to talk about you and your products, so why not provide them an environment where people can talk in front of you and not behind you? I’d rather you yelled at me directly than behind my back; this way I can at least explain where I’m coming from.”

How do you handle a situation when it is a family organization? (A famous figure) recently announced a movie deal about his father with (a major motion picture production company). His siblings say they are stakeholders and were not consulted. He has been very silent on most of the public battles. Is this the best way to handle this?

The impact of silence on your reputation is pretty much the same whether you’re a private organization or a public company. You should point out those consequences. There’s a history of organizations and individuals that lost in the court of public opinion because they remained silent, or offered terse, fact-based responses.

Do you think we will see companies creating specific jobs, or perhaps entire departments devoted to social media? e.g. a job title like Social Media Communications Specialist, or a Social Media Monitoring Department?

We’re already seeing it. Pepsi hired Bonin Bough from Weber Shandwick to coordinate social media company-wide. At GM it’s Christopher Barger. At Ford it’s Scott Monty. Coca-Cola has announced an office of social media within its marketing department. And these are just a few examples of what is a growing trend.

What avenues/seminars/etc. do you suggest for a classically-trained PR pro to quickly come up to speed about utilizing social media?

There’s a list of upcoming social media conferences at TheNewPR wiki. And I have a list of books, blogs, podcasts, and other resources here on my blog.

Is there, in your view, a difference between tactical transparency and “strategic” transparency? Is transparency really more of a strategic imperative?

Strategic planning starts with a goal: What is it you want to achieve? What needle do you want to move and how far do you want to move it? Once you know your goal, determine the strategy you’ll execute in order to achieve the goal. Strategies are systematic plans of action. You should develop measurable objectives to achieve the strategy. Tactics are the tools and processes you’ll put in place in support of achieving the objectives.

So, let’s say you determine a strategy will be to encourage more open discussion between company leaders and key stakeholders (e.g., investors). You set an objective of four senior leaders being available for conversation. Another objective is to produce 20 inputs from stakeholder audiences each month. You might set a tactic of establishing a group blog for those executives, through which the comments (and tweets linking to the blog) can help you measure the amount of engagement.

How much of a competitive advantage does transparency provide a business? Today? Tomorrow?

If there were no competitive advantage to behaving transparently, you can be sure I wouldn’t be recommending companies do it! The advantage is based on increased trust and credibility in the eyes of your critical publics, including investors, regulators, legislators, the media, and customers. Consider JetBlue, which could have failed to recover from its February 2007 debacle as customers lost confidence in the airline. CEO Dave Neeleman’s personal apology, delivered over YouTube and other social channels, restored confidence and led to full flights and higher profitability.

Increased investment, greater sales, not to mention customers who want to do business with you are all the ultimate payoff for adopting a culture of transparency.

How do you monitor what your employees are saying in the social media place - how do you do damage control when an employee gets something totally wrong, gives out info that was NOT supposed to be shared, etc.

Monitoring all employees is likely to take way, way more time than it’s worth. If you’re already monitoring for references to your company, anything your employees say will be included. If somebody says something particularly heinous, odds are someone will point it out to you. But you only want to take one of two actions:

• Address employees who violate the policy
• Make adjustments to your internal communications to ensure employees are equipped with the information they need to tell the company’s story accurately

How great is the risk of an employee trashing the company in a blog or YouTube video, and what should be the organization’s response?

The risk is directly related to how well (or poorly) employees are treated. (By the way, this is also the leading determinant in how external audiences perceive your commitment to corporate social responsibility, more than environmental stewardship or corporate philanthropy.)

Of course, there are very effective ways to mitigate the risk, the best of which is to implement a clear and understandable policy, communicate it well and often, and enforce it.

Everyone John C. Havens (my co-author) and I interviewed for the book told us the same thing: The lawyers had concerns about a variety of consequences of employee blogging, but none of those fears were ever realized.

how do you determine what info is “people’s right to know” info versus info that should not/does not need to be publicized?

You’re asking the wrong question. It’s not a matter of “right to know,” it’s a question of access to the information stakeholders need in order to make informed decisions about the organization. The question, then, is what information should not be shared because it is not in the organization’s best interest to share it. Michael Hyatt, CEO of Thomas Nelson Publishers, for example, told us (in an interview for the book) that, because Thomas Nelson is a privately-held company, he is not obliged to release any financial information. He does release his sales, though, because he can think of no good reason not to and making more information available is better than less. However, disclosing his profits would give his competitors an advantage he doesn’t want them to have, so he has determined that it is in the company’s best interest to keep that information private.

How do you get execs over the mindset “well, it’s all very good to have social media, but we don’t have the time or money to assign people to monitor everything”?

Monitoring isn’t a full-time job, particularly if you contract with a monitoring service. The cost is very reasonable for many of these services (like CustomScoop, Radian6, Social Radar, and Spiral 16) and you’ll stay on top of all references to your organization and related topics by reviewing regularly-delivered reports. You should also set up some listening posts internally, but this is a one-time task. Monitoring the listening posts is a matter of reviewing new input for about five minutes two or three times a day. You’ll find a great process for setting up listening posts here.

What major change globally as result of social media use do you predict will occur in the next 5 years?

More.

It’s a fool’s game to try to predict the next shiny object, but I’m confident that there will be more people engaged in social media, more people creating content, more social networks (and greater volumes of networking), and increased scrutiny of organizations by stakeholders with the time and interest to do it.

And people will be engaged from more places, notably their mobile phones, the logical evolution of the computer.

A fellow manager thinks our company should establish guidelines for employees who use social media to communicate for, or about, our company. Any thoughts on that?

As noted above, policies are critical. You’ll find links to a number of company blogging policies on The New PR wiki. The best comprehensive social computing policy I’ve ever seen comes from IBM.

Do you have a sense of how much traditional media (press and analysts) are turning to social media outlets for news about a company?

With increasing regularity. There have been a number of studies that ask reporters about their use of social media when identifying topics to write about as well as when research stories they’re already covering. You can dig into studies like the one conducted by Brodeur & Partners and Marketwire that concluded…

Over half of reporters we surveyed said they spent more than an hour per day with online news sources and blogs. In fact, nearly half (47%) of all technology reporters and over one-third (38%) of political reporters said they blogged as part of their reporting. At the same time, a majority of these same reporters across all beats said blogs and social media were having a negative impact on the quality and accuracy of reporting.

Another great study was commissioned by the Society for New Communications Research SNCR, with Don Middleberg conducting the research. Early results are consistent with the Brodeur findings.

Very interesting points about leadership and employee roles. In light of that, what do you see the role of communicators as in the dynamic you describe?

First, communicators will continue doing just what they’re doing now. The need for good, authoritative communication isn’t going to vanish as social media rises. In addition, however, communicators will guide organizations’ use of social media to ensure they achieve business objectives; this will be a facilitator’s role, as well as a counselor on various aproaches the company might consider. Communicators will also engage in social media on behalf of the organization, as communicators like those mentioned above (Christopher Barger, Scott Monty) and others (like the entire communications team at Dell) are doing.

Is there a point in having a blog without a comments function? Obviously it’s a monologue versus a dialogue.

This is a question that comes up often and is debated heavily. One way to look at a blog is to focus on the underlying application. You can turn comments off and it’s still a blogging application. However, when you talk about a blog as a communication channel, it usually denotes a two-way (or multi-directional) vehicle. As far as I’m concerned, a blog without comments is a column produced using blog software; the conversation is the whole point of having a blog.

Do you have examples of B2B companies using social media?

You mean like IBM and Oracle? Frankly, I think social media makes even more sense with B2B companies than it does with B2C companies. B2B is already all about relationships, but building relationships with consumers of bathroom tissue, say, or paper clips is far more difficult.

There are communities that have been developed as social media venues for B2B, like those offered by Social Media Today. There are videos intended for B2B audiences like the famous toilet video on YouTube. Plenty of B2B companies have tapped into blogging and even podcasting. Ernst & Young uses Facebook for recruiting. Boeing has a few blogs. ArcelorMittal, a minerals and mining company, has a presence in Second Life. Accenture has blogs. The list goes on…

Can you please provide the names of the podcast and societies online?

By “the podcast,” I’m guessing you’re referring to mine, “For Immediate Release.

By “societies,” I’m guessing you mean the Society for New Communication Reserach (SNCR.

If you were looking for something else, leave a comment and I’ll add more information to this answer.

What evaluation metrics are available?

The question of measuring social media is one that comes up again and again. The best resource to which I can point you is a presentation by Katie Paine, who is the leading light in the field of PR measurement of any kind. She has a firm grasp on the notion of measuring social media. Here’s a presentation Katie gives on the topic. In addition, I’d recommend this e-book on social media measurement from the school of journalism and communications at the University of Oregon.

A lot of other people are delving into this topic; a Google search will produce a gold mine of information.

Reputation is more easily, and traditionally, measured. I’d look at the Reputation Index for more information, available at The Reputation Institute.

Let me know if you’re looking for information on metrics that I haven’t covered here.

How do you prevent a gradual decline in posting or participation by employees?

This one’s easy: If there’s genuine conversation and knowledge exchange taking place, if people are getting information faster and networking beyond the normal confines of their departments and work teams, you shouldn’t have a problem. The people who are enthusiastic about participating will continue to do so. However, you can’t force people to engage who aren’t inclined to, so tap into those who already have the desire.

One thing you should consider, though, is to spotlight employees who are actively engaged in a way that truly benefits the organization. Recognition not only honors those doing good work, but inspires others to emulate that behavior. (“Oh, this is what people get recognized for around here? Then that’s what I’ll do.”)

What are your suggestions for convincing old-school bankers that transparency will help the organization?

Well, you could always start by pointing out the good that opacity has done the financial services industry lately.

Beyond that, please use the advice offered in response to the second question.

Where can I find the ROI business case you just referred to?

Charlene Li developed this for Forrester while she was still working there. You’ll find it at the Forrester site, where it’ll set you back $749.

What and how do you think skype will come into play with companies presently & for the future?
Re: Travel/Tourism/Hospitality industry in particular?

In terms of transparency, Skype isn’t a factor, nor is it much of a factor in social media (although it’s a godsend to podcasters who can’t be in the same room at the same time). In general, VOIP (Voice Over IP) will continue to grab market share from POTS (Plain Old Telephone Service).

From a nonprofit organization that serves children: Is there a point in having a blog that does not allow for comments? a monologue versus a dialogue?

Take a look at the answer to the question eight questions above yours. The short answer is, “No, generally not.”

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Feel free to leave a comment if you disagree or have anything to add!

How important is it that business monitor Social Media? And then, plan for engagement and response to customers, business, the government, etc?

Monitoring is vital. The speed with which a message is amplified online is unprecedented, and if you aren’t monitoring what people are saying, you’ll miss the opportunity to identify issues before they become crises. Once an issue has been identified, engagement is the best way to address it. You don’t need your own blog, Facebook group, or podcast to have conversations with those who care enough about the issue (or your organization) to talk about it. At the very least, you cannot let inaccuracies or misstatements of fact go unchallenged. It’s best, though, to tell the organization’s story in conversation with those who have raised the company, and to do it at an individual, human level. As for planning for such engagement, this happens at two levels. One is to determine who will speak for the company authoritatively on the range of issues that could arise. The other is to educate employees on issues so they can speak unofficially within their networks. As the CEO of Commonwealth Bank told Richard Edelman at the World Economic Forum in Davos, employees are his secret communication weapon.

Tuesday, March 17, 2009

Transparency, engagement, responsibility: Hospital exec Paul Levy is a role model for CEOs

CEO reputations are already in the tank. According to the Edelman Trust Barometer, used car salesmen have more cred than CEOs and official corporae spokespersons. Those same CEOs should be looking beyond the current economic crisis. A rehabilitated image will be important once the sting of the recession has faded.

Writing on ReputationXchange.com, Dr. Leslie Gaines-Ross pointed out that a CEO’s internal communications stand to have a bigger impact on how a CEO is perceived by external audiences than external marketing or PR efforts. Gaines-Ross, chief reputation strategist for Weber Shandwick, said, “as companies continue to announce layoffs, reputations will be built and destroyed on how well job losses are communicated and how fairly the process is handled.”

Gaines-Ross’ perspective is consistent with the findings of a 2006 study conducted by Fleishman Hillard and the National Consumers League. When asked what how they assess a company’s corporate social responsibility (CSR), most people said it hinged on how well the company treated its employees.

From what we’ve been hearing, the future does not bode well for a lot of CEOs who have taken a slash-and-burn approach to reducing the workforce.

Paul Levy, on the other hand, is one CEO who shouldn’t worry.

Levy, CEO of Beth Israel Deaconess Medical Center (BIDMC) in Massachusetts, has been using his Running a Hospital blog to keep internal and external constituents up to date on his efforts to control expenses while a combination of factors conspire against the hospital’s goal of meeting budget.

Paul reported on a series of quickly-assembled town hall meetings convened to explain the financial situation to employees. An even bigger goal of the meetings, though, was to solicit ideas from employees about how to address the budget gap. The meetings were convened following the distribution of a memo to employees. In a demonstration of what it means to be transparent these days, Paul posted the memo to his blog, a much more above-board approach to sharing internal matters with the public than deliberately leaking a supposedly internal-only document, the approach Citigroup took to get the word out that it had performed well during the first two months of 2009.

Overtly disclosing information will build much greater trust than pretending that an internal memo found its way outside of the company.

The memo included these candid and sobering remarks:

For BIDMC, our hoped-for 2% FY09 operating margin (about $18 million) has disapeared. The state has reduced Medicaid payments by over $7 million, our major insurerer is paying us less than we had hoped, and reseach funding has also fallen short by several million dollars. In addition, patient volumes are substantially lower than budgeted as people in the community defer or forgo medical visits and treatments.

Right now, at best, we can break even for the year if patient volumes return to budgeted levels. However, if they stay at current levels, we will face an operating loss of up to $20 million.

Now, sadly, we have to crank p expense reduction…Part of the solution to this problem will be to lay off people. I’m not sure how many yet, and I am hoping you can help me figure out how to minimize the number by using more creative and less disruptive ways to solve the problem.

Levy encouraged employees to write him with their ideas, use an electronic chat room he was setting up, or talk to him in person at the town hall meetings. He suggested elimination of pay raises, reduction of future earned time accruals, forfeiture of one or two days of past accruals, voluntary pay cuts, and unpaid leaves of absences.

Then he threw in the zinger:

The senior managers of the hospital have recognized their personal responsibility to help with this problem. The senior vice presidents, vice presidents, and chief operating officer have been asked to take voluntary 5% pay reductions, and I have eliminated all of their bonuses for 2009, a total potential pay reduction of 15% to 25%. I am personally taking a 10% salary reduction and will forgo my bonus opportunity for this year, a total potential pay reduction of 30%.

If it wasn’t already clear, Paul articulated the rationale for the measures imposed on senior staff and requested of the rank and file while face-to-face with employees at the town hall meetings: “to protect (BIDMC’s) lower wage earners (e.g., transporters, housekeepers, food service people) from measures we take, even if it means that the other people have to give up more of their salary and benefits.” After all, he explained, it would be harder for these people to find new jobs and the impact of being unemployed would be harsher for them. “A lot of these people work really hard, and I don’t want to put an additional burden on them,” Levy told his employees.

Here’s another surprise: Kevin Cullen, a Boston Globe reporter, was in the room. That’s right; rather than try to keep word of the meetings from leaking, Levy invited the press to attend. Here’s what Cullen wrote: “He had barely gotten the words out of his mouth when Sherman Auditorium erupted in applause. Thunderous, heartfelt, sustained applause. Paul Levy stood there and felt the sheer power of it all rush over him, like a wave. His eyes welled and his throat tightened so much that he didn’t think he could go on.”

On a follow-up post, Paul shared some of the emails he received from employees after the meetings, like one from a nurse who wrote, “I would be more than happy to forego a pay raise and reduce my earned time if that would mean another person in the hospital could keep their job. I think this is a great idea and I hope my colleagues feel the same.”

Levy plans to keep reporting on his thinking and inform employees of final decisions by April 1. Those decisions will also, no doubt, appear on his blog for the world to see. In fact, just today he provided an update to employees, posted (of course) to his blog. Among his messages:

Your participation in this process and your advice to me has succeeded in accomplishing two very important things: First, we have reduced the number of necessary layoffs dramatically, from over 600 to about 150. This is a major victory and will mean a lot to more than 450 families who would otherwise lose their income from BIDMC. Second, we will do this at the same time we provide earnings protection to our 900 lowest wage workers. As you will see, this does come at a higher cost to the rest of us, but you have all made clear to me that this is consistent with our community’s values and expectations. Thank you in advance for your generosity of spirit.

The entire post is well worth reading, especially for the detailed explanation of how those to be laid off will be selected.

My friend Albert Maruggi, who also blogged this story, sums it up well:

Much of America has a very long way to go to eliminate the culture of “gotcha,” of confrontation, a culture of “keep the info, keep the power.” All these insecurities and tactics of greed will hinder the benefits of what social media can bring to an organization and our society. With each blog post, each honest answer to a criticism, each good idea raised and implemented, the organization becomes stronger.

Somehow, I don’t see AIG’s CEO Ed Liddy meeting face-to-face with employees to seek their input on how to turn things around. Even if he did, I don’t see him sharing the experience on a blog or inviting the press to attend the meetings. Instead, I hear the protests, “We’re a financial institution, not a hospital.”

More’s the pity. Liddy’s reputation is most likely beyond redemption, but Levy will long be remembered as a beacon of responsibility, transparency, and engagement.

Hat tips to Ron Shewchuk and Albert Maruggi for some source material for this post.

Tuesday, November 18, 2008

Resources and thanks for my new book, “Tactical Transparency”

A week or so ago, I received my author’s copies of “Tactical Transparency,” the new book I’ve co-written with John C. Havens, and even though it’s my sixth book, I felt that same old thrill the day it went on sale. I’m also very hopeful about the book’s prospects. I must have heard President-Elect Barack Obama utter the word “transparency” about 10 times during his “60 Minutes” interview this past Sunday, and a Google search shows the word has appeared about 567,000 times in the last month alone.

There’s nothing quite like good timing.

Now that the book is available, I want to let you know about a special offer that makes the purchase price worth a a bit more, point you to some resources, and extend my deepest gratitude to everybody who had a hand in getting the book from concept to publication.

The offer

First off, if you buy the book online you can go to a special site that will be available temporarily where you can enter your online order receipt number. That’ll get you an email with a link to a page where you’ll be able to download a variety of resources, including an e-book by Chris Brogan; a lengthy excerpt from Roger D’Aprix’s new book, The Credible Company (which is must-reading for anybody working in employee communications); sample chapters from Mike Robbin’s book, Focus on the Good Stuff; Jeremiah’s Owyang‘s Forrester report on corporate staffing for social computing; Jason van Orden’s Community Magnet series, a PDF covering the seven deadly sins of social media from Room 214, and (for U.S. residents) a free one-year subscription to FastCompany magazine (which I still read religiously).

Resources

The primary resource associated with the book is a blog titled (aptly), Tactical Transparency. I have to confess that John has been shouldering most of the burden of contributing to this blog, but I’ll start getting some material up there now that the book is out and the blog will (I hope) attract some more attention.

There are also some videos from a presentation John and I gave at the New Media Expo in Las Vegas this past August. Here’s the video of John and me:

You’ll find other versions of the video—including the full discussion John and I had before the presentation—at my Viddler account.

Thanks

I couldn’t possibly be too effusive in my expression of thanks to everyone who had a role in getting the book done.

First, I have to tip my hat to John C. Havens. We met when John called to ask me to co-present at a meeting—he’d be live, I’d be Skype’d in. Unfortunately, I had technical problems and couldn’t get through, leaving John hanging. In our conversation after that, though, the talk turned to the many dimensions of transparency that we hadn’t planned on talking about at the meeting, and the book concept took off from there.

I still hadn’t met John face-to-face when a publisher came on board, but we’ve seen each other several times since then. We’ve also had countless phone calls, exchanged hundreds of emails, and gotten to know each other pretty well. At this point, I’m proud to count John among my friends.

Next on the thank-you list are those who worked directly on the book’s development. First, I’d like to heap praise on Yvonne DiVita and Tom Collins ofWindsor Media Enterprises, our agents, who go well above and beyond the role an agent usually assumes. (I’ve had three agents before this; I know whereof I speak.)

On the publishing side, the International Association of Business Communicators—of which I’ve been a member for more than 30 years—played a pivotal part. IABC has a publishing partnership with Jossey-Bass, and my very good friend Natasha Nicholson, IABC’s vice president of publishing, brought the idea to the publisher. Natasha and I met for lunch with Kathe Sweeney, senior editor in the business/management group at Jossey-Bass, who also became a champion for the book. Since then, we’ve worked with many great people at Jossey-Bass (a Wiley imprint), but a special nod goes to Erin Moy, who’s handling the marketing. John, Kathe, Erin, Natasha and I had a great lunch to talk about the book at this year’s international IABC conference in New York.

Finally, there are all those who provided the substance for the book, the many who agreed to be interviewed. (All those interviews, in their entirety, are available on BlogTalk Radio, where John works as VP of business development. (The continued availability of these interviews is an example of transparency: If you read a quote in the book and wonder about its context, you can just listen to the entire interview and hear exactly how that quote was presented.)

Not everybody interviewed made it into the book, but their contributions were no less important than those who did—their observations, insights, and wisdom are unquestionably apparent in the finished product, even if specific quotes aren’t.

By the way, if you’re listed here and you never got the PDF of the review version of the book, let me know and I’ll get it off to you.

Here’s the rundown of those who took part in the interviews, in decidedly non-alphabetical order:

• Jonathan Schwartz, CEO and President, Sun Microsystems
• Robert Duffy, Open Port Group, Intel
• George Faulkner, Corporate Communications at IBM
• Jimmy Wales, founder of Wikipedia
• Dominic Jones, Principal of IR Web Report and founder of Clarity! Communications
• Jeff Pulver, founder of Vonage and Pulver.com
• Lynne d Johnson, Senior Editor for FastCompany.com
• Michael Hyatt, CEO, Thomas Nelson Publishers
• Alan Levy & Bob Charish, CEO & COO, co-founders of BlogTalkRadio
• Christopher Carfi, co-founder of Cerado
• Bill Sobel, Principal of Sobel Media and founder of the New York Media Information Exchange Group
• Jeremiah Owyang, Senior Analyst with Forrester Research
• Ludovic Fourrage, Group Program Manager for the Academy Mobile Program at Microsoft
• Sean O’Driscoll, General Manager, Customer Service and Support for Microsoft
• Chris Anderson, Editor in Chief, WIRED Magazine
• Todd Defren, partner at SHIFT Communications
• Andy Sernovitz, author of Word of Mouth Marketing and Founding CEO of WOMMA.org
• Gabe Dalporto, Chief Strategy Office for Zecco.com
• Tom Foremski, author of the Silicon Valley Watcher blog
• Bob Langert, Vice President for Corporate Social Responsibility at McDonald’s
• Mike Prosceno, Head of New Media Relations at SAP
• Mike Wing, vice president of communication strategy for IBM
• Lynn Tyson, director of Investor Relations at Dell
• Shel Israel, co-author of Naked Conversations
• John Czwartacki, Executive Director of External Communications for Verizon
• Chris Heuer, Principal, The Conversation Group
• Chris Brogan, New Media Consultant and co-founder, Podcamp.org
• Brian Solis, principal of Future Works PR
• Andrew Horowitz, President and Founder of Horowitz & Company and author of The Disciplined Investor
• Timothy Sykes, CEO, Bullship Press and author of An American Hedge Fund
• Tia-Carr Williams, CEO at EveryMedia and Chief Network Officer at http://www.NovumInstitute.org
• Michael Port, nationally acclaimed speaker and author of Booked Solid
• Dave Balter, Founder and CEO of BzzAgent
• Joel Smernoff, President and COO of PalTalk
• Josh Levy, CEO, BeenVerified
• Paul Levy, President and CEO of Beth Israel Deaconess Medical Center in Boston
• Jonathan Vanasco, Founder and CEO of FindMeOn
• >Andrew Baron, Founder, Rocketboom
• Gerald Baron, founder of AudienceCentral and author of Now is Too Late
• Anthony Moor, Deputy Managing Editor/Interactive for the Dallas Morning News
• Micah L. Sifry, Senior Editor, Personal Democracy Forum
• JD Lasica, founder of Ourmedia.org
• Stephanie Rogers, Director of Interactive Strategy for PARTNERS + Simons
• Anil Dash, Vice President, Six Apart
• Robert Scoble, Managing Director, FastCompany TV and co-author of Naked Conversations
• Eric Skiff, Community Evangelist at Clipmarks.com
• Paull Young, Senior Account Executive at Converseon
• Scott Ginsberg, The Nametag Guy
• Jason McClain, founder of the Institute for the Development of Evolutionary Awareness
• Andrew Kaplan, CEO at MediaMensch Networks
• Cindi Bigelow, President, Bigelow Tea
• Valorie Luther, Founder and CEO, Creative Concepts
• Sean Bohan, Advertising and Marketing executive
• Lauren Wood, Senior Program Manager, Sun Microsystems
• Matthew Knell, former General Manager, Jet Blue
• Morgan Johnston, Corporate Communications, Jet Blue
• Brian Lusk, Manager of Customer Communication and Corporate Editor, SouthWest Airlines
• Bill Owen, Lead Planner in the Schedule Planning Department, SouthWest Airlines
• Paolo Tosolini, New Media Business Manager, Microsoft

One more thing…

There have been some early write-ups of the book:

A “drive-by” review by Johnathan Fields
A blog post by Connie Crosby
A nice reference by Christie Adams, who attended the Third Tuesday event in Toronto a few weeks ago
My friend C.C. Chapman’s post announcing that he received his review copy
C.C.‘s early thoughts on the book, discussed in his terrific podcast, “Managing the Gray”
IBM’s George Faulkner announces that he’s received his review copy
A great post by Lynne d Johnson, FastCompany’s director of social media, who wrote the foreword
A brief interview that Albert Marruggi of Provident Partners conducted with me at the recent SNCR research symposium
Paull Young of Converseon talks about the book

I think that’s about enough self-promotion, don’t you? Now, back to our regularly-scheduled programming.

Tuesday, November 11, 2008

AIG’s executives: A confederacy of dunces

I have come to the sad conclusion that the people running AIG are idiots. Dolts. Complete and irredeemable morons.

I defended the Southern California retreat for which AIG took so much heat. That event was an incentive for top-performing life insurance salespeople. It was part of the compensation for their contributions and necessary to keep the company’s top performers from defecting to the competition. If anything is going to help AIG get out of its hole and repay the taxpayer bailout it received, it will be top performers selling their asses off. Instead of criticizing the event, I suggested AIG should have foreseen how the retreat would be perceived and been proactive in communicating what the event was, who it was for, and why it was an investment in future sales.

Today, it has been revealed that AIG held another event at a posh Arizona resort. The rationale for the event makes perfect sense. AIG’s CEO Edward Liddy explained the rationale after the event was exposed by local TV news reporter Josh Bernstein. Exposed because AIG made every effort to keep the event a secret.

Brilliant planning there, Fast Eddie. Like nobody’s paying careful attention to every minuscule move your company makes. (News flash, Ed: You’re under the world’s biggest freaking microscope.)

I can just imagine the conversation among the reality-challenged executives who made this monumentally stupid decision:

Executive #1: We need to train the independent, non-employee financial planners who recommend our products to their clients. The more knowledgable these planners are about our products, the more inclined they’ll be to recommend them, and to the right clients. We rely on these guys for sales; the training is a necessary investment in those sales.

Executive #2: Well, yeah, all the companies in our line of business do this as a matter of routine. But we have a problem most of our competitors don’t have. The public couldn’t possibly understand this and, because of that bailout thing, if they see us sponsoring an event like this, they’ll crucify us.

Executive #3: Why don’t we just host the event at some Ramada Inn in East Bumcrap, and instead of sending our top execs for the planners to meet, we’ll send mid-level sales support staff?

Executive #2: Are you nuts? What financial planner would invest his own money and time to come to a meeting in a Ramada Inn in East Bumcrap? We’ll end up with three has-been B-list football players who got mail-order degrees in financial planning. We need to train 150 of the best, most sought-after financial planners in the country if we’re going to produce the kind of sales we need.

Executive #1: He’s right, you know. These guys are high-powered players. They only turn out for top-drawer events. And they expect to hobnob with the top brass.

Executive #3: Hey, I have an idea. We’ll do it in secret. We’ll make sure the hotel staff is in on it, we’ll come up with a fake company name and a fake logo. It’ll be cool, just like an undercover operation. I’ll be Jack Bauer. You can be James Bond.

Executive #1: I love this plan. But I wanna be Jack Bauer.

After his company was caught—hidden camera and all—Liddy went public and made a number of points:

• Most of the tab was picked up by sponsors and participants (the company even released a list of the partners who covered the costs)
• The company has canceled some 160 planned events; the ones kept on the company’s calendars were deemed mission-critical (like training independent planners to sell your products so you can make a ton of money and repay your debt)
• The fancy hotel rooms in which AIG execs stayed were comped by the hotel as part of the total $360,000 package (90% of which, remember, was paid for by partners and participants)

Anybody who has spent time in business recognizes these as legitimate points. But it’s hard to convince anybody you’re telling the truth after you’ve been caught in a cover-up. Footage shown by the Phoenix ABC-TV affiliate included the KNXV reporter confronting a couple AIG execs as they hurried, tight-lipped, onto their flight.

After a performance like that—along with other damning footage on top of the revelation that AIG tried to pull this off covertly—few are inclined to believe a word Liddy says. His quote—“We appreciate what the taxpayer and the federal government has done for us…We intend to pay back every penny we’ve borrowed”—rings especially hollow after being caught in a premeditated, willful effort to deceive. Sure, Liddy did the right thing by appearing on CNN’s Larry King to personally address the charges, and a press release was issued defending the event. But it was way too little, way, way too late.

So now AIG has federal legislators calling for Liddy’s head on a platter and taxpayers itching to form a lynch mob, pitchforks and torches at the ready. All of which could have been avoided if AIG had just been transparent. Rather than assume the public is too stupid to understand its business, AIG should have explained up front the realities of the financial services market, how companies like AIG rely on independent agents to sell their products, how training these agents is what generates sales, and how these sessions need to be upscale or the agents won’t come and your product won’t sell. Maybe a lot of people wouldn’t have liked it, but AIG would be in a lot less trouble than they are now.

If this is the kind of leadership Liddy has to offer, maybe he should resign. But unless AIG’s top PR counselor (I have to assume this is Communications Senior Vice President Nicholas J. Ashooh) advised against this fiasco and was overruled, he definitely needs to go. (Besides, any PR counselor with an ounce of ethics would have resigned before engaging in such an ill-advised cover-up.)

AIG’s predicament should serve as an object lesson for executives at other companies who may still believe that opacity is a viable business strategy in today’s environment.

Tuesday, October 21, 2008

The first copy of Tactical Transparency

The doorbell rang late yesterday. I was ready to be assailed by yet another advocate for or against one of the ballot propositions, but it turned out to be my regular UPS guy with an envelope containing one copy of the new book I have co-authored with John C. Havens, “Tactical Transparency.” The official release date is November 8, but it’s great to have a copy to show off. It’s only my second hardcover (the first was “Corporate Conversations”), and the production values are great. Most flattering are the testimonials from the likes of Chris Brogan, Andy Sernovitz, Paul Levy, Jonathan Schwartz, David Meerman Scott, Pete Blackshaw, and Jackie Huba.

In the spirit of transparency, all of the 50 or so interviews conducted for the book can be heard in their entirety at the BlogTalk Radio site where they were recorded. We also have a blog dedicated to the book. And we’ll have a special site launching shortly with a short-term promotion for the book’s launch. I’ll let you know when that site is up.

The book was published by Jossey-Bass, a Wiley imprint, as part of the IABC publishing series. I can’t begin to express how thrilled I am to have been involved with John, the folks at IABC, and the folks at Jossey-Bass, not to mention our agent, Yvonne Divita. And I also can’t begin to express how thrilling it is—no matter how many books you write—to hold the final product in your hands!

Thursday, September 04, 2008

A misdirected email leads to a company crisis

In the days before email, someone at a company where I worked inadvertently pushed the wrong speed-dial number on a fax machine. Instead of faxing a draft press release to outside counsel, he sent the release to a newspaper reporter who covered the company as part of his beat.

It was fear of this kind of all-too-human mistake that led attorneys in organizations everywhere to resist the introduction of fax machines to the workplace. The same paranoia accompanied earlier communication technologies, including photocopiers and telephones.

More recently, lawyers lobbied against email, worried about the ease with which company-confidential information could escape the ever more porous walls of the organization. There is good reason for lawyers to worry. More than one email has been sent mistakenly to external addresses from within IBM, one about a switch to Linux for employee desktops, another from an executive telling employees about the company’s woes. There are hundreds of such stories from companies, but few as chilling as the tale plaguing Carat, a media agency owned by Aegis Group, as reported yesterday in AdvertisingAge.

Faced with an impending round of layoffs, Carat’s HR staff prepared an email for those tasked with notifying affecting employees. The email was accompanied by PowerPoint and Word attachments that covered key talking points for those to be laid off, those remaining, clients and vendors. The email also telegraphs the extent of the layoffs by talking about consolidation of business units, although actual numbers aren’t included.

Rather than send the email to the intended audience of senior managers, though, the company’s top HR executive inadvertently sent it to all employees.

The AdAge piece will give you all the details about the layoff itself, along with a quote from John Hollon, editor of Workforce Management (an AdAge sister publication), who said:

It seems to me the issue here is one of a dumb, stupid error that just about everyone who uses e-mail does from time to time. You would think that the chief people officer would be more careful given their position in the company—a reasonable assumption to make—but that’s not always the case. Owning up to the problem, apologizing and emphasizing it was a terrible mistake won’t solve this or make it better but can go a long way toward getting beyond it quickly.
Still, if I were the CEO, I might want to start looking for a new chief people officer. You pay those people to step up in these situations, not make it worse.

Over on David Murray’s blog, comments revolve around whether it makes sense for Carat to can Rose Zory, the chief people officer. On the one hand, it seems like a PR move designed to pacify without really addressing the issue. On the other hand, as one commenter put it, “I still really question how effective that HR person will/can be moving forward after a fiasco like this.”

(I learned about the story from a reader who read about it on David’s blog.)

A series of questions beyond that of Rose’s fate arise from Carat’s unfortunate experience, key among them…

• How do you deal with layoffs now that employees have had sneak peeks at all the layoff materials?
• How do you handle the reputational damage outside the organization?
• What steps do you take to minimize the risk of this happening again?

The first decision the company should make is to take the hits. Being defensive won’t help. Admit this was a horrible mistake and just deal with—even agree with—the criticism.

Next, acknowledge that nothing is going to fix the situation. It will take time—and positive action—to rebuild the company’s damaged reputation.

Be utterly transparent about all this. No equivocation, no hunkering down. Admit and elaborate on plans that were exposed in the email, even if your original intent was to keep them quiet.

Dealing with employees is tougher, but not impossible. An apology from the highest levels of the organization is a good start, followed by a conversation about how the process for managing the layoff unfolded. There’s not much you can do for employees who will lose their jobs, but plenty for those who are staying, including becoming more open in your ongoing communication with them about the state of the business and the forces at work on the organization, as well as the previously-hidden internal workings of HR. Employees are never surprised by a layoff when they work for companies that keep them well informed.

Finally, don’t jerk that knee and restrict the ability to send email. Rose’s mistake was a bad one, but it was a mistake. Organizations are made up of humans; we are all inherently imperfect. I doubt there’s even a need to reinforce the need to be careful when pushing that “send” button—no message could be stronger than the one that has already been sent.

If you were counseling Carat, what advice would you have?

 

Monday, August 18, 2008

Muddying transparency

John C. Havens, my co-author, and I presented a session last Friday at the New Media Expo on the subject of our new book, “Tactical Transparency,” which is due out in November from Jossey Bass. Early indications (as represented by the tweet shown here) suggest the session was pretty well received. The relevance of transparency to the expo is based on the book’s focus: the use of social media to promote organizational transparency.

Ours is not the first book to address transparency. I read several, including “The Naked Corporation” by Dan Tapscott and David Ticoll, as part of my research for the book. All of the books—and other materials—define transparency pretty much the same, although they may use different words. Which is why I find it interesting that some seem to be appropriating the word as a synonym for authenticity.

Over on her terrific marketing blog, Michelle Greer posted an item in which she calls the idea of transparency in marketing “hilarious,” “a buzz word to use if you want to sell books or get paid to speak.” Which, of course, I do. But her point is that you’re not transparent if you despise the product you’re trying to help a company sell. (By way of example, she suggests a lack of transparency in selling Hummers when your personal philosophy leans toward the green.)

One of the comments to the post, from P.J. Brunet, suggests that transparency came into vogue after some fake blogs were exposed. The fact is, transparency (in the U.S., at least) became mandated by law after companies like Enron and WorldComm imploded partly due to their opacity (which is, by definition, the opposite of transparency). The doors and windows were shuttered, nobody could see what was going on, and ethics-challenged leaders were able to engage in business practices that cost shareholders their investments and employees their jobs and retirement savings.

Contrary to musings of some critics, transparency does not mean full disclosure; the very idea is just silly. You can’t be “transparent” about, say, your employees’ medical histories (a HIPAA violation) or confidentiality agreements. A couple definitions, though, help clarify what it is:

• The extent to which a financial market is characterised by prompt availability of accurate price and volume information. Transparency is a good thing because it helps create a fair and efficient market for all participants.—Financial Guide
• Transparency is a measure of how much information you have about the markets where you invest and the corporations whose stocks or bonds you buy.—Morgan Stanley
• Open, comprehensive and understandable presentation of information.—ACLA
• The process by which companies disclose all possible information, a practice that boosts employee morale and performance, facilitates business partnerships, and helps responsible corporations attract socially conscious consumers and investors.—Tapscott and Ticoll (the emphasis on “possible” is mine)

Wikipedia defines “radical transparency” as “a management method where nearly all decision making is carried out publicly.”

For the purposes of “Tactical Transparency”—which deals with the use of communication tools in order to promote transparency beyond that which is required by law—as the degree to which an organization shares its business strategy, practices, and processes by making information available through accessible leaders and employees. By virtue of such transparency, it should be clear that business practices and processes are driven by the organization’s culture and a shared set of values.

None of which has anything to do with Michelle’s noble belief that marketers should be passionate about the products they’re selling. In a response to a comment I left to her post, Michelle argues that she’s “asking people to take transparency a step further by being passionate about what they do.”

It’s not that I disagree with Michelle’s sentiment; not in the least. People should be passionate about what they do. (I know I am.) But I worry about getting squishy with definitions. I know it’s just a matter of semantics, but when you’re trying to drive a company’s culture toward greater transparency—openness about the processes and practices that drive business decisions—turning a clearly defined word into a catch-all label for other organizational and personal attributes just muddies the waters.

By the way, there’s a blog tied to book and—being completely transparent—we have made the audio of all our interviews available on BlogTalk Radio, where most of them were conducted; we’re continuing to conduct interviews post-publication, just to keep the discussion going.