Inventing History: Malleable Memories

David DiSalvo, freelance writer and self-described research wonk, nicely summed two studies from the journal of Applied Cognitive Psychology that suggest what we remember may not be reality, especially when presented with evidence that seems to support what did not happen.

Can false memories be adopted?

After participants were asked to perform a computerized multiple choice gambling task, they were prompted to withdraw money from a bank when they answered correctly and deposit money when they answered incorrectly. At the end of the task, researchers told participants that they were caught cheating. Some participants were told that there was video evidence showing that they took money (but were not shown the video) after answering incorrectly while others were shown false video “proving” that they cheated. In a second study, participants were accused of cheating more than one time.

The results of both experiments were surprising. When shown fake evidence, nearly 100 percent falsely confessed, and 67 percent (Experiment 1) and 73 percent (Experiment 2) believed they committed a false act. But even when subjects were told that video evidence existed, nearly 100 percent falsely confessed, and 60 percent (Experiment 1) and 13 percent (Experiment 2) developed false beliefs.

In a similar study, participants conducted the task with a second person and were then told the other person had cheated and asked to sign a witness statement. In the second study, nearly 40 percent of the participants who watched the video complied. Another 10 percent signed when asked a second time. Only 10 percent of those who were only told about the video agreed to sign, and about 5 percent of the control group signed the statement.

How does this apply to communication?

A significant amount of communication happens in real time or near real time. In some instances, participants may debate or disagree about any number of issues and topics that sometimes evolve into a drama. However, not all dramas may be legitimate, even when evidence seems to support them as such.

John Mackey's Aug. 11 opinion in the The Wall Street Journal may qualify as a fitting example. While there was no outrage in his opinion piece that offered alternative ideas to health care reform, the retelling of false inferences combined with content taken out of context as evidence has fueled some odd and fabricated outrage.

Today, there were about 100 stories with continuing coverage about the boycott, with an emphasis on a Facebook group dedicated to boycotting Whole Foods. There are about 30,000 members. (There is also an anti-boycott group growing at a faster pace, if you can believe it.)

By comparisons to other cause-driven efforts I've covered — ranging from the cancellation of Jericho and Veronica Mars to outrage over Motrin or push back on United Airlines, any fire behind any boycott seems overblown no matter how some agenda-driven proponents attempt to fan it.

Still, both Whole Foods and Mackey have exhibited some regret over the piece, with Whole Foods apologizing while clarifying that Mackey's opinions are not the official stance of the company. In a way, they've accepted an erred definition that providing any opinion was ill-advised.

It really wasn't ill-advised. But with the case being made with the thinnest of evidence, it may be remembered as such. Weird.

Of course, if anyone prefers a simpler example, consider how an old friend might share a memory we don't recollect. We may accept their account, even if they made it up. And, we're even more likely to accept it if they have a photo or video that offers any evidence, even if the evidence is only implied or supportive without a direct correlation to the story. Malleable, indeed.

Accounting For Anonymity: The License To Kill

The Electronic Frontier Foundation (EFF) is an international non-profit advocacy and legal organization that is dedicated to preserving free speech rights such as those guaranteed by the First Amendment of the United States Constitution.

One of the cornerstone arguments is the right to say things online that will not be connected with our offline identities, as we may be concerned about political or economic retribution, harassment, or even threats to our lives. As someone who has long valued free speech, I agree with tempered reservation.

The reservation comes from something that is often missed in discussing anonymity: it is often abused as a license to kill. What is missed is that being anonymous demands even more authenticity, sensitivity, and responsibility than those who operate outside the realm of cloaked avatars and general deflection.

CEO John Mackey Poses As An Average Investor

A few weeks ago, Whole Foods Market Inc.'s board, overreacting to anonymous postings by its chief executive, amended the company's corporate governance to sharply restrict online activities by its officials.

The new code bars top executives and directors from posting messages about Whole Foods, its competitors, or vendors on Internet forums that aren't sponsored by the company. If there was ever a case for attempting to pander to the public and perhaps the Securities Exchange Commission during an investigation, this is it.

It was never about what was posted, but rather the deceptiveness of comments made under a fake persona. In this case, the messenger is the message.

State Investigates Political Blogger After Anonymous Tip

Chuck Muth is president and CEO of Citizen Outreach and a professional political consultant. He is well known for his conservative viewpoints, well-thought arguments, and biting commentary.

In early November, the state’s Children and Family Services (CFS), which acts as child protection services in Nevada, launched an unfounded investigation on Muth based solely on an anonymous tip, possibly to the amusement of his detractors. After reluctantly allowing the sheriff’s deputies to inspect his home and interview his children, Muth was cleared by their inspection.

Or, perhaps not. Despite passing the inspection, the CFS has informed Muth that his file would remain open unless he subjected himself and his family to further investigations. In other words, any previous inspection would not be enough.

This is no longer about the accusation, but rather the deceptiveness of the accusation and a potential agenda for revenge under supposedly sealed files. In this case, the messenger is the message.

Megan Meier Commits Suicide After MySpace 'Hoax'

Meier, a 13-year-old girl, who suffered from depression and thought she made an online friend with a boy named Josh, committed suicide over his accusations that she was cruel person, unkind to her friends, and that the world would be better off without her.

Except Josh was not Josh, but rather the mother of another girl who wanted to gain Meier’s confidence in order to know what she was saying online about her daughter. To date, the woman who created the fake “Josh” profile has not been charged with a crime. The entire story has sparked an online maelstrom of cyber vigilante justice.

This is no longer about protective parenting, but rather the deceptiveness of hateful intent under the fake persona “Josh.” In this case, the messenger is the message.

The Future Of Anonymity

In the Meier story, Wired goes on to point to the work of Daniel Solove, professor of law at George Washington University and author of The Future of Reputation: Gossip, Rumor and Privacy on the Internet.

The work is important, because as we see with Muth’s story, the danger of unrestrained anonymity remains a license to kill and is not confined to the Internet. It has become the new weapon of choice among con men, vengeful accusers, and hateful posers in a world where everyone is a public figure with the burden of proof landing squarely on those accused, regardless of the masked messengers.

We see it too often, accompanied by unjust justifications. The argument made for Mackey is that if anyone was duped into making decisions based on the financial message boards he posted upon, they deserve no less. The argument against Muth is he ought to have nothing to hide from the authorities. And even as the Meier story, which continues to spiral out of control, is being twisted into the idea that the victim got what she deserved. We need an adjustment.

You see, sometimes in our diligence to preserve some rights, we neglect others. And the most neglected today seems to be found within the Sixth Amendment, which includes our right to be …informed of the nature and cause of the accusation; to be confronted with the witnesses against us …

While this may seem to be an argument for complete transparency, living in glass houses is not a remedy as we’ve given up enough civil liberties in the private and public sectors. If there is any solution, the real remedy begins with shedding our apparent ignorance that the credibility of the anonymous posters, posers, and tips extends beyond a well-reasoned and authentic argument.

Simply put, allowing for anonymity preserves one freedom; whereas placing additional burden on the validity of anonymous accusations will preserve another. It’s something to think about.

Freedom was not born out of emotional polarity, but rather well balanced reason. And until those who use anonymity for selfish rather than selfless pursuits are brought to justice for bearing false witness against their neighbors, we are all at risk to become their victims. Or equally disheartening, we will lose our own right to privacy when it matters most.

Saying Tomato: Whole Foods Market, Inc.

Whole Foods Market, Inc. (Whole Foods) has completed its investigation into CEO John Mackey’s online financial message board postings related to Whole Foods and Wild Oats Market (Wild Oats). The fiasco began months ago after it was revealed that Mackey posted disparaging remarks about Wild Oats on Yahoo financial boards using the anonymous name “Rahodeb.” He did this for years, stopping several months prior to the Whole Foods acquisition of Wild Oats.

The result was one of the biggest games of “you say tomato, I say tomoto” in recent history, with some people insisting it was all good fun (including Mackey before he admitted a lack of judgment) and some people claiming it is an ethical breach of his fiduciary duty with the insistence that he be immediately removed as CEO.

The Whole Foods Board, led by Rahodeb and including "Divad," "Nhoj," "Elleirbag," "Ssah," "Sirrom," and "Hplar," has reaffirmed its support of Mackey. (By the way, Divad, Nhoj, and Hplar led the "independent" investigation.)

So why did they say tomato? They won't say. It’s a secret.

“The Company and the Board intend to cooperate fully with the SEC in completing its related inquiry. Due to the ongoing SEC inquiry, the Company and the Board have no further comment at this time.”

Instead, they have turned over their investigation to the Securities and Exchange Commission (SEC), which is charged with determining if Mackey violated the law. I do not envy the task; exonerating Mackey will smack as permission for more colorful CEOs to do the same. Not to mention, the media, which was once sympathetic to Mackey, is starting to lose their patience with the whole sordid story.

They have several reasons. Mackey’s activities were carried out despite knowledge of them by senior executives and several knew of the postings as of 2001, according to three people familiar with the matter, reports The Wall Street Journal. The independent investigation no longer looks so independent. The company will not comment further. And, the longer it takes to resolve a crisis communication situation, the less likely the media will be on your side.

So why did they say tomato? That’s no secret. It’s simple.

The Whole Foods Board has nothing to lose by doing so. If the SEC does decide to call Mackey’s antics less than vine ripe, then it simply has to announce something like this … “In light of the SEC investigation, which uncovered additional information, we have decided to say tomoto instead of tomato.” And then call the whole thing off.

Covering Hot Topics: Third Quarter 2007

Every quarter, we publish a recap of our five most popular communication-related posts, based on the frequency and the immediacy of hits after they were posted. While we base this on individual posts, some are related to larger case studies.

Nina Tassler Talks; Jericho Fans Listen

If there is one person at CBS who has captured the curiosity of fans that have a passion for the nuclear terrorist attack/small town survival drama Jericho, it is Nina Tassler, president of CBS Entertainment. While most of her attention has been vested in putting out fires related to the rating challenged, nothing-but-controversial buzz that has become Kid Nation, when she speaks about Jericho, fans listen. Of all our coverage related to consumer marketing challenges and successes of this television show in stasis, none compares to the Tassler post that asks if she has surrendered her early edginess to wrangle ratings. Jericho fans hope they can turn Tassler into “Jericho buzz believer” into a full-fledged “Jericho Ranger.” It won’t take a miracle, but it will take a season 2 start date.

Links: Jericho, Nina Tassler

Bloggers Blog Against Abuse

People spend a lot of time “talking” about social media, but Antony Berkman, president of BlogCatalog (and the entire BlogCatalog team), is one of the few who talks less and does more and has fun doing it. Determined to prove that bloggers can do good and social media can influence change and produce outcomes beyond the Internet, he asked BlogCatalog members to post against abuse on Sept. 27. BlogCatalog members were not the only ones: more than one thousand bloggers from all over the world made abuse the most-talked about topic on the Internet. The largest social awareness campaign in history moves beyond buzz and produces tangible outcomes — bloggers who inspired tens of thousands of people to take action. For our part, we launched the “Blog For Hope Post Competition in cooperation with BlogCatalog. The submission deadline is Oct. 10.

Links: Bloggers Unite, BlogCatalog

Borg Think Infiltrates Social Media

It takes many forms, some with the best intentions, but there is only one outcome. In hoping to guide social media into the mainstream, sometimes prevailing blog think leaders overstep sharing their opinion and offering guidance by staking leadership claims over the Internet. Whether written up by a few as a code of conduct over the many, or proclaiming territorial dominion over the ideas that litter the Internet in posts, on blogs, and a myriad of PDF files, we can only hope that forced assimilation doesn’t sweep across the entire social media structure. The outcome would lead to the denial of new ideas and inability to challenge old ones. While civility is always appreciated on the Web, the pioneers today might remember that collective think or the promotion of fear is not the answer. The solution is clear: lead by example, not by force of law or pirate threat.

Links: Borg, Pirates

John Mackey Tells Whole Truths

John Mackey and Whole Foods Market Inc. (WMFI) beat the Federal Trade Commission with the $565 million purchase of Wild Oats Markets Inc. (maybe that’s the good, or not), but the Securities and Exchange Commission (SEC) investigation still ongoing. While some people frame the issue up as a possible SEC violation or transparency issue, one of the most pressing aspects of this case study is how it chips away at what some call the tenets of crisis communication. In the case study of Mackey, he largely ignored these tenets and managed to remain at the helm of Whole Foods, with more people defending him for posing as “rahodeb” and using the pseudonym to disparage and deflate the competition before purchasing it.

Links: John Mackey , Whole Foods Market

Veronica Mars Fans Organize

Fans of Veronica Mars, the critically acclaimed teen drama/mystery neo-noir series starring Kristen Bell, demonstrate that they are not to be underestimated in their efforts to encourage Warner Bros. to syndicate the show and prove the power of this fan base is strong enough to support a movie despite the cancellation of the series. In their efforts as consumer marketers, they have developed action points that are reminiscent of a communication plan while remaining courteous and supportive of Bell and series creator Rob Thomas. Unencumbered by the rules of communication, Veronica Mars fans are working to prove consumer marketing works.

Link: Veronica Mars

Runners up (no order) include: Buzz Is Not A Measure, which reminds blog evangelists to focus on outcomes as opposed to buzz metrics; the Jericho Fan Fiction Contest, which shared some great stories and promoted a different look at Jericho on more than 50 sites, blogs, and social networks; one of two blog dramas turned positive by reminding people one gumball is not better than another; the results of an unscientific online ethics poll; and our use of the Career Distinction’s Online Identity Calculator as the basis to flush out the online identities of various public figures individuals.

While a few “bad news” case studies made it into the top spots, this is the first quarter they have given way to education-oriented and social media action, which represents a pleasant surprise. Last quarter, we wished for more attention to be given to our underpinning concept that strategic communication is best suited to drive social media and it looks like we’re getting it.

So there it is once again; the top posts as tracked by reader interest. Thank you all for dropping by, adding comments, promoting stories, and continuing to bring communication issues to our attention so we may offer up our sometimes serious (sometimes silly) take on them. Whether you agree or not, we appreciate that in our pursuit to tackle such issues, our readers have remain steadfast in never mistaking communication discussion for anything but objective discussion of issues, actions, and behaviors as they relate to communication.

Telling Two Stories: John Mackey

"The District Court's ruling affirms our belief that a merger between Whole Foods and Wild Oats is a winning scenario for all stakeholders," said John Mackey, chairman, CEO, and co-founder of Whole Foods Market. "We believe the synergies gained from this combination will create long term value for customers, vendors, and shareholders as well as exciting opportunities for team members."

Yes, as predicted, U.S. District Judge Paul L. Friedman has declined to block Whole Foods Market Inc.'s $565 million purchase of Wild Oats Markets Inc. The judge ruled that it does not violate antitrust laws, leaving all speculation to whether or not the Securities and Exchange Commission will rule that Mackey's anonymous postings as the great masked “rahodeb” constitue a violation of securities laws or regulations.

While the reviews have been mixed, several media outlets gave Mackey a free pass despite some documents revealing that the deal could mean the closure of 30 or more Wild Oats stores as well as other details that seem contrary to the public image Mackey has portrayed over the years.

And therein lies the question. How far can Mackey go before he has completely eroded his concept of conscious capitalism? You see, before the controversy, Mackey was working on his book, The Whole Story, which he said would relate his business and life philosophies. And here is an excerpt from one essay that he requested comment on ...

In the early years of the 21st century, major ethical lapses on the part of big business came to light including scandals at Enron, Arthur Anderson, Tyco, the New York Stock Exchange, WorldCom, Mutual Funds, and AIG. These scandals have all contributed to a growing distrust of business and further eroded public trust in large corporations in the United States.

Mr. Mackey, as you so eloquently conclude in your essay ... When we are small children we are egocentric, concerned only about our own needs and desires. As we mature, we grow beyond this egocentrism and begin to care about others—our families, friends, communities, and countries ... I tend to agree. Yet, as much as these thoughts may have been welcomed, it will be exceedingly difficult to take them seriously as you add your own name to the list of scandals that have contributed to a growing distrust of businesses. And perhaps, therein lies the answer.

For while you have earned a pass from the media, forgiveness from the shareholders, beat the Federal Trade Commission, and may very likely survive the SEC investigation, it seems to me that you may have given up your opportunity to ascend to the rank of conscious business visionary. But hey, sometimes the price of winning costs as much, if not more than, losing. In this case, the price could very well be an entire legacy under the pressure of increasing scrutiny as the merger goes through. Indeed, brands are fragile things.

Silencing Crisis: Whole Foods Market, Inc.

There is something to be learned from Whole Foods Market, Inc. (WFMI) beyond its back to school nutritional program. Sometimes silence can be a golden as a July Pippin'.

That's what you'll learn if you visit John Mackey’s blog today. All you will find is silence. The CEO of Whole Foods left his last message, directed to shareholders, on July 17…

“A Special Committee of our Board of Directors' is conducting an independent internal investigation into online financial message board postings related to Whole Foods Market and Wild Oats Markets, Inc. (OATS). In light of this, it is in the best interest of the company to temporarily hold off on posting on my Company blog. The ability to post comments to this blog will be disabled during this time as well. I look forward to resuming our conversations and plan on being in touch with you again soon.”

He will. There is very little doubt. Despite anonymously posting disparaging remarks that may have impacted the stock price of Wild Oats, the company that Whole Foods is now fighting the Federal Trade Commission to acquire; the SEC investigation; the independent internal investigation; and the calls for his resignation by dozens of organizations, including CtW Investment Group, whose members own about 900,000 Whole Foods shares, Mackey will likely retain his position.

Less certain is whether Whole Foods will acquire Wild Oats, but that is another conversation thread all together. Lawyers for Whole Foods and the federal government are set to offer closing arguments today.

More in line with observations in communication is noting: this case study will likely become the bane of public relations professionals because it chips away at what some call the tenets of crisis communication. Maybe that’s a good thing.

For example, against what most PR pros would advise, Whole Foods went silent on the issue after apologizing to stakeholders (never mind Wild Oats shareholders who may have lost money on the advice of the masked Wild Oats stock vandal “rahodeb”). Then, yesterday, earned an extremely rare and generous pass from the media, allowing him to break his company's self-censorship and tout that they beat Wall Street estimates.

"Currently we do not expect the same degree of year-over-year increase in our total pre-opening expenses," Mackey said, as reported by CNN Money. "We are very excited to see the acceleration in our new store openings materialize, as we expect these new stores to drive strong sales and comparable-store sales growth in the not-so-distant future.”

As found in The Wall Street Journal: “I could understand if Mr. Mackey was accused of spreading false rumors about his company to manipulate the stock price, but I have not heard such allegations.” Or perhaps even more telling from The Motley Fool …

“Look, I'm not saying that John Mackey should have gone onto the Yahoo! message board for Whole Foods and posted anonymous messages extolling his company while trashing Wild Oats. It was dumb, an activity with almost no hope for upside. But I understand it. I understand why John Mackey would see the nonsense that some random keyboard heroes wrote about him and his company and find the impulse to shoot back irresistible.”

Chip. Chip. Chip. It is any wonder why some public relations professionals have a hard time finding a position at the proverbial “table?” You cannot get there until you understand business let alone the new state of media, which suggests that today’s editors and analysts would rather be right than write about what is right.

"From a Whole Foods perspective we will be glad one way or another to have this situation resolved because it's taken a lot of management time and we spent a lot of money on lawyers," CNN Money reports Mackey said on a call. "It's been incredibly burdensome on us."

Like a fly buzzing in their ears, I imagine. Whether Whole Foods is allowed to acquire Wild Oats or not, Mackey and Whole Foods will not only survive but will also continue to see their stock fare well. Pending some revelation from the internal or SEC investigation of Whole Foods, it also seems unlikely to me that Mackey will be leaving anytime soon, chipping away at the notion that companies have to make a sacrifice in order to emerge from a crisis.

So what makes Mackey so special? As part of what I call my Fragile Brand Theory, Mackey has always been successful in presenting himself as somewhat eccentric thereby putting himself in the position to garner understanding in the wake of what Mackey himself even called his own “lack of judgment.”

That doesn’t make what he did right by any stretch of the imagination. While some people wonder about the Mackey case study “if we are not falling victim to a distorted sense of hubris in the United States: We are offended to the point of threatening legal action over surficial issues that are probably neither unethical or illegal,” I hopefully offer a clearer perspective.

What Mackey did, posing as an anonymous poster with an alleged agenda to damage his competition for future gain, was unethical.

Whether or not it is illegal is up to the SEC to decide. Whether or not the remedy is his resignation is up to the shareholders to decide. Whether or not shareholders are outraged will likely depend on the price of the shares. And whether or not the media decides to give him a pass or not will largely be dictated by the previous three outcomes.

I’m not saying this is right, but it is what it is. And what also “is” is that public relations professionals need to move away from formulaic approaches to crisis communication and consider the thought processes behind those bullet points. (We’ll compare this crisis to traditional crisis communication check lists next week.)

If they do not, executives will be hard pressed to take the profession seriously when good CEOs like David Neeleman at JetBlue play it by the “book” and are pushed aside while CEOs like Mackey, who clearly breached ethics, can break away and be heralded as a wacky egomaniac who, well, make shareholders lots of money.

Then again, I suppose all those who claimed the remedy is resignation still have a shot to be “right” as this case study seems far from over. But when it is over, I can promise you this: I'll probably have to add a warning label. Don't Try This At Home.

Telling No Truths: Whole Foods Market, Inc.

"I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards,” says co-founder, Chairman and CEO John Mackey, Whole Foods Market, Inc. “I am very sorry and I ask our stakeholders to please forgive me."

With the lead up to his apology and the very limited number of people he apologized to, I’m not sure this was the best decision, but the fact that this decision was made means fun time is indeed over. Given the possibility that Mackey did not act alone (or at least was not anonymous to everybody who perused Yahoo financial chat boards) while playing the part of the great masked Wild Oats stock vandal, “rahodeb,” it might be for the best. Will it work? Probably not.

Make no mistake, the Whole Foods Market, Inc. board retaining the firm of Munger, Tolles & Olson LLP to advise it during an independent internal investigation means that the damage down the road may very likely exceed “rahodeb” having fun at the expense of others. (The SEC began its investigation the day before.)

While there may be many revelations made during the internal investigation (let alone the SEC investigation), the need to investigate seems to mean: more people may have been involved (it’s hard to keep a secret identity secret for that long without sharing) or they feel a need to analyze whether any of Mackey’s comments did in fact impact Wild Oats stock at any time (online or off). Even more obvious, Whole Foods Market, Inc. wants to apply one of the few “golden no comment” clauses that most journalists respect.

"The Company intends to fully cooperate with the SEC and does not anticipate commenting further while the inquiry is pending." ... "The Board will refrain from comment until the internal investigation is completed."

Why does the “golden no comment” clause work? From a communication perspective, provided the board doesn’t start to squawk, refraining from comment during an investigation gives the company a badly needed pause in its communication, which to date, can be likened to someone hemorrhaging at the mouth. To be clear, the board is concerned about something enough that they feel it is prudent to censor their outspoken CEO for fear it will get worse before it gets better. Most journalists will respect such restraint provided it holds.

Why doesn’t the “golden no comment” clause work? Once a company issues the statement that silence is golden during an investigation, reporters have a nasty habit of looking for anyone and everyone for input and opinion. It almost assuredly increases speculation 100-fold because journalists can no longer turn to the primary source and they have to go out and look for new sources. There is also the risk of someone developing a Deep Throat complex and leaking information to the media, whereby the company won’t be able to respond to any of it unless it gives up its communication blackout. And once you give it up, it’s not fair to ask for it back.

There are other major downsides to applying “no comment during an investigation,” including: all other company news becomes irrelevant (you can’t effectively talk about produce in the room but skip the part where the elephant ate half of it); it makes the company look like there really is a fire under all that smoke (whether there is or not); and, finally, most importantly, it contradicts the concept that someone always talks (because they almost always do).

So, given the company's statements, we have moved from “whole” truths to “no” truths in the case study of Mackey and Whole Foods Market, Inc. Or perhaps, more appropriately, since others are ready to pick up where Mackey left off, we have entered the spin zone where there will be ample hot air about how it’s unfair to comment on a CEO because, as Laura Goldman submits, “I checked with lawyers and confirmed that the postings themselves are not illegal.”

With no disrespect intended, Ms. Goldman is right that this incident should not undo all the good work Mackey has done nor does it invalidate Whole Foods Market, Inc. as a viable company. However, even Journalism 101 students know that you can always find ample lawyers to argue either side of a case. Heck, that’s what makes court reporting sensational enough to have plenty of programming.

Besides, I think journalists and stock traders have been surprisingly kind to Mackey; it’s the public relations and communication people who seem to want his head the most (I’m in the minority by not asking for it, though I think he may have lost it anyway with the apology). Unfortunately for Mackey, I also think the split opinion over his fate will solidify in time; the reactive silence will point most in one direction.

Underthinking Mackey: Steven Silvers

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Telling Whole Truths: John Mackey

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

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

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

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

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

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

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

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

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

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

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

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