Managing Bad News

Happy New Year!

Last week, I offered to provide some basics in managing bad news when faced with a situation like Jobster as part of a living case study in communication. (Spoiler: If you're looking for dirt, I am sorry to disappoint. You can find plenty of nastiness on Jobster's own blog.)

Perhaps James E. Lukaszewski, APR, of The Lukaszewski Group (one of the most quoted crisis communication management consultants and prolific authors in the field), said it best during his speech to the Canadian Investor Relations Institute in 2001: In the era of instant communication, people will likely bet against you when trouble comes. "Your ability to understand and communicate with confidence in real time with constituents will be the key to winning the perception struggle that crisis always creates," he said.

He is spot on of course. With the exception of crime, malfeasance, or environmental catastrophe, most crisis communication situations are all about perception, and this seems to be the area where Jobster has struggled the most.

You see, downsizing, unfortunately, is part of business when companies are not performing as expected. There is nothing wrong with it, other than the unfortunate impact it has on people. Most people understand this and most CEOs lament the decision, which means companies are generally judged solely on management's handling of layoffs. This is also why I suspect Jason Goldberg's decision to blog about upcoming changes before clearly communicating all the details to employees (just prior to the holidays) was met with such widespread criticism.

Why? First and foremost, he didn't seem to understand he was in a crisis communication situation. Usually, crisis communication situations are identified by one of the following: a dramatic drop in stock prices, a member of management is indicted, outside activists attack the company, acquisitions/mergers/takeovers, anti-corporate government action, and the one that is hardest to identify but best applies here — founded and unfounded rumor.

It doesn't make a difference whether a rumor is founded or unfounded, both can have equal impact on a company's reputation and it is up to a CEO to manage them, with or without the advice of communication specialists (not necessarily public relations practitioners). If they do not, they run the risk of demonstrating that they are not leaders, but simply managers. The difference is that managers generally run an organization by the numbers (try to make the forecast or exceed it at all costs) whereas leaders lead through inspiration, motivation, strategic vision, and people management.

When faced with bad news or a crisis, assuming management recognizes it as such, the best leaders will always consider the following (a sliver from my playbook) once the founded or unfounded rumor surfaces:

• Talk about it as soon as possible.
• Tell the whole truth, even if it means bad news, negligence, or wrongdoing.
• Be clear and concise, addressing details without obscuring the situation.
• Offer full disclosure of all relevant facts, history, and related information.
• Demonstrate empathy or remorse as appropriate to the situation.

By all counts, it seems to me that Jobster did none of these things. They did not seem to consider that, in today's world, communication has an impact on ALL company publics very quickly (employees, shareholders, media members, customers, etc.) and each of these publics will react to information differently. They did not seem to consider most people have gut reactions before listening to the facts and background or waiting for post-holiday explanations. They did not seem to consider that all information, no matter how contained it seems, will eventually be released by someone. And they did not seem to consider that the media, people like the Seattle Times, will frequently turn to additional sources for opinions and comments when management avoids an issue, which could further erode the reputation of the company.

Suffice to say, even if Jobster finds a way to keep every employee (I hope they do, and am sorry if they don't), how the rumor and supporting evidence was managed will still have a negative impact on the company, especially on employee relations. Sure, they don't teach most of this in many MBA programs, but the most experienced leaders in today's business world learn it anyway, either the easy way from "handlers" as they are called by Goldberg, or the hard way.

Given that reputation damage most often occurs from the inside out, I sincerely hope others learn from this living case study. History does not have to repeat, even though it almost always does. Companies are fragile things. Treat them wisely.

In conclusion, I would like to mention that there has been much criticism over whether people should be discussing Jobster at all. Sorry, but I have to disagree. Jobster executives and team leaders have to appreciate that no one but no one gets to choose what others find newsworthy or interesting. On the contrary, you invited bloggers and members of the media to take an interest in the company from day one. You cannot "uninvite" them.

That, in essence, is what public relations (just one aspect of strategic communication) is all about. It's about managing communication, perception, and reputation in good times and in bad. Never should a company expect one without the other. That would be silly.

Remembering Top Posts Of 2006

With the new year upon us next week, we would like to say goodbye to 2006 with a recap of our five most popular communication-related posts, based on the frequency and the immediacy of hits after they were posted.

Wee Shu Min’s Post Impacts Economic Reform

When Wee Shu Min, the teenage daughter of a Singapore member of parliament, stumbled across the blog of a Singaporean who wrote that he was worried about losing his job, she thought she’d give him a piece of her mind. She called him “one of many wretched, under motivated, over assuming leeches in our country” on her own blog and signed off with “please, get out of my elite uncaring face,” a post that received international scorn and had such an impact that the Singapore government paid out S$150 million to about 330,000 low-income workers five days before its recent election.

Links: Wee Shu Min, Wee Siew Kim

Jobster Loses Control Of A Blog Rumor

After starting a rumor that 2007 would mean more profitability for Jobster, the rumor runs away from the company as bloggers speculate whether that will mean layoffs at the young, but fast growing online recruitment company. The outcome leads to one of the worst public relations and internal communication nightmares in recent memory. From the net to mainstream media, the Seattle Times picks up on what continues to be an interesting communication case study. A few more days and Jobster might have overtaken Wee Shu Min’s post. Go figure.

Link: Jobster

Wal-Mart Fires Julie Roehm

Julie Roehm never intended to gain her most fame for being fired by Wal-Mart, but that is exactly what happened after Wal-Mart allegedly grew uncomfortable with her friendly connection to Draft FCB, which she had pushed for to become Wal-Mart’s agency of record. Draft FCB was fired three days after Roehm. Still spinning an upbeat message, Roehm told Advertising Age she would take “60 days to find out exactly what I want to do and take advantage that people want to talk with me…” Her other alternative, she said, is to open her own shop.

Links: Roehm, FCB Draft

Jim Gibbons Elected Nevada Governor

Fueled largely by last minute assault allegations made against Jim Gibbons by Chrissy Mazzeo, a 32-year-old cocktail waitress at Wynn Las Vegas, the governor’s race in Nevada became a hot topic nationwide. Eventually, Gibbons overcame the obstacle after video evidence proved he was not in the location where the incident supposedly took place. Gibbons won over Dina Titus, 48-44. For our part, we worked on Gibbons mailers for the Nevada Republican Party’s Victory 2006 campaign after working with State Senator Bob Beers on his spirited policy-changing primary.

Links: Jim Gibbons, Gibbons Wins

Miss USA Crowns In Turmoil

The Miss USA pageant scandals remind us that all of us have personal brands. Donald Trump capitalized on the publicity by teasing Miss USA Tara Conner with the statement, made days ago, that he would be "evaluating her behavioral and personal issues and would make an announcement within the week." He forgave her, but Miss Nevada, Katie Rees, did not fare as well when 3-year-old photos surfaced on the Internet. The decision prompted many to ask whether the Miss Universe Organization had double standards in regard to ethics rulings.

Links: Rees, Conner

Those were the top five topical posts in 2006, followed closely by predictions for YouTube, e-mail disasters, Stoern’s publicity stunt, business card techniques, and Sam Sethi’s dismissal from TechCrunch.

Links: YouTube, E-mail, Stoern, Business Cards, Sethi

Let us hope 2007 brings more attention to the best practices as opposed to the biggest mishaps. Happy New Year!

Knowing When To Post

Jason Goldberg is an Internet pioneer of sorts, not only for developing Jobster (one of the first employee recruitment search engines), but also for starting one of the first truly transparent corporate blogs three years ago. It has never been as polished as some corporate blogs, but Goldberg seems to prefer it that way and it seemed to work, er, until now.

The main reason Jobster has suddenly resurfaced on everyone's radar is because the company, the biggest new Internet company in Seattle, recently instituted a hiring freeze, which venture blog writer John Cook says is a sign that the company may have grown too big too fast. Shortly after, rumors began to surface that the 145-person company would announce significant layoffs.

Although a minor communication crisis was already brewing, Goldberg made it big with a post that asked people to "put down your pencils .... calm it down, relax a bit, and have a nice holiday. We've got no news to give ya before the new year."

From an internal communication perspective, posting this was paramount to the captain of the Titanic asking passengers to refrain from dropping lifeboats in the water until the ship's quartet finished his favorite song. To make matters worse, Goldberg added a post to justify Jobster's future decision to focus on profits in 2007. And again, he asked people to wait for answers.

"why would a young company like jobster care about profits? hmmm... vs. many of the dot com companies not too long ago who didn't? many answers to provide here ... will have to wait for now. but in the meantime I will point to a few big things ..." and goes on to list four of them.

No, there is nothing wrong with streamlining a company to become more profitable, but it is usually a good idea to let your employees know before the rest of the world. Not to mention, asking them to "have nice holidays" before facing major layoffs is almost too painful to post about.

Will there really be layoffs? According to an e-mail, again published by Cook, Goldberg writes: "What I can say is that the changes we will make are 100 percent voluntary and (management) proposed (versus) board dictated."

All this news and continuing updates from Cook has created a second wave of criticism about Goldberg and Jobster. It's unfortunate because this could have been handled better. One of the first golden rules of any crisis communication situation is to deal with the most urgent and critical matters as early as possible. In doing so, the spokesperson or CEO must be direct, decisive, and empathetic to anyone who could be negatively affected by the bad news.

Instead, Goldberg, apparently panicked and without the aid of a seasoned communication professional, wrote from his Blackberry: "I made a personal pledge to be a very public and open CEO, knowing that it could come back to bite me sometimes. I promised to speak my mind and provoke and prod the industry a bit, again knowing that it could open me up to greater criticism and sometimes backfire."

He went on to encourage his readers to read all about the "beating" he received from comments made by anonymous posters on Cook's blog. "Rather than run from it, I encourage folks to go read it."

Um, Mr. Goldberg, please, please stop throwing kerosene on the deck of your sinking ship and you just might save it yet. You see, there is a difference between being a very public and open CEO and one who is empathetic to his employees, investors, and fans.

Lesson for today: Don't tease with bad news, lead with it. It's not fun, but at least it's manageable.

Striking A Visual Chord

The Fifth Column is a group of bloggers who pride themselves on attempting to "whittle away at the dominant culture, the status quo, and the accepted and the norm."

I mention them today — as Islamic fighters and Ethiopian-backed government soldiers begin to clash in Somalia, potentially sparking a civil war and dragging in the entire Horn of Africa — because one of them effectively demonstrated the power of a single image. The photo, showing white doves of peace growing darker as they fly upward past a tank, is a bold social commentary on current events in Africa and, unfortunately, most of the world.

The LA Times has an excellent write up on this growing conflict at a time when most men and women are wishing for peace on earth.

In sum, Islamic leaders, who recently seized control of Mogadishu and much of southern Somalia, are calling for a "holy war" against Christian-dominated Ethiopia unless the neighboring nation withdraws its troops, which were sent across the border to prop up Somalia's weak transitional government. Both sides have been massing weapons and troops in strategic points around southern Somalia in recent weeks.

Should this occur, Eritrea and Kenya will most likely be drawn into the fray. The United States could also become involved, given that our government has been funding some warlords as part of the greater war against terror. Other than funding select warlords, it has been hands off in Somalia after 18 American servicemen were killed in Mogadishu. The story, of course, was popularized by the book and film "Black Hawk Down." According to military sources, other players include Syria, Libya, Yemen, with Saudi Arabia and Egypt supplying funding and logistical assistance to Sheik Hassan Dahir Aweys.

Moving back to the topic of striking a visual chord: this one works because it accurately presents a framework for their entire column, which is how photos work best. Despite the old adage that a picture paints 1,000 words, most cognitive studies have found considerable evidence that effective working memory is increased by using dual media rather than a single medium to communicate.

In fact, one theory, called cognitive load, suggests that the best form of communication is one that is limited to two representations of the same material at one time: aural/pictorial or written/pictorial. You can give readers the third option, but two remains the best option (which explains why users hit the mute button on "musical" blogs).

Regardless, images, particularly photographs, are thought to be easier to assimilate and to be more universal than words. When combined with words however, they create a compelling message.

For example, The Fifth Column appropriately gave this photo the caption: this is what it sounds like when doves cry. Imagine what a different impact the photo might have with the caption: world peace at last.

Maybe it's my profession, but I have always been fascinated with the psychology of communication as much as the execution of it. Now if only those leaders vying for power on the Horn of Africa could consider that most differences, regardless of distance, can be bridged with communication. Or, at minimum, they could at least begin to understand each other, even if they cannot agree.

Stacking Online Votes

On Christmas Day, Seth Godin did something nice for a few dozen blogs. He posted them on his blog, Seth Godin, and encouraged people to visit.

By creating a plexo at Squidoo, he enabled others to include their own blog (or blogs they liked) and vote for any they felt seemed interesting. "There is no A list, so there can't be a Z list. There's just good blogs," he wrote.

Unfortunately, one blogger felt otherwise, turning the true spirit of Godin's post into a case study that is similar to the challenges Reddit experienced a few months ago when overzealous marketing types voted their articles up and other articles down. However, unlike the Reddit stacking, Kim Klaver and a handful of her readers were less than anonymous. On her blog, which I won't link to, she wrote: "If we push it to #1, I'll take a screenshot pronto and post it here. We'll be 'Queen for a day.'"

Her marketing tactic worked, driving several readers to vote and then report her blog's progress. In fact, they voted hers up and other blogs down, enough so, that one commenter on her blog finally wrote: “You know, sending an email out in order to ask for votes is really quite lame. ... Deceptive if you ask me. Isn't this the very thing you preach against?” Obviously not.

"I don't mind asking for votes though, since people can do it or not. I might even send out another email, so be forewarned...hehehe,” Klaver replied. "If the blog writers didn't tell their readers about the popularity contest, how would they know and how could they help their favorite writers?"

Klaver seems to have missed the point of the post entirely. It was never meant to be a popularity contest, especially because Squidoo doesn't track IP numbers, only e-mail addresses. This means that anyone with multiple e-mail addresses can vote for whatever blog they like as many times as they like. With Klaver's encouragement, that is exactly what her readers seemed to do.

The most basic Internet tracking reveals the story behind her empty victory; many blogs were voted down despite never being visited. It is a shame, because I visited many of those blogs today and several were worthwhile despite being voted down.

But then again, I suppose that is the difference between Klaver's "new school of marketing" and communicators like me. I subscribe to a code of ethics that includes credible communicators "engage in truthful, accurate and fair communication that facilitates respect and mutual understanding."

Sharing Happy Holidays

Their lives are beautiful,
sparkling like stars.

Their moments are fleeting,
ending in a second.



Let their imprint be an avalanche,
these fragile snowflakes of all seasons,
our family and friends.

Happy Holidays and Merry Christmas.