Inviting A PR Disaster: Hewlett-Packard

If there is any doubt that Hewlett-Packard implemented the wrong crisis communication strategy, look no further than abundant speculation. Speculation doesn't happen by accident. It happens when the public doesn't have any semblance of clear, authentic communication.

Stanford scholar and longtime Hewlett-Packard watcher Chuck House has come out strong for HP. He says chief executive Mark V. Hurd's resignation is tied to red herrings. The real reason, he says, is Hurd, nicknamed Mark Turd by ex-HPites who worked directly for him, was a thug.

The Los Angeles Times has taken a different tact. It reports that the HP board of directors ought not to flash a high standard of ethics too liberally. They cite how employees and top brass are treated differently when it comes to compensation, including an unusual formula to calculate the lump sum value of pensions that increased John H. Hammergren's pension from $11 million to $85 million.

James B. Stewart, a columnist for SmartMoney magazine, takes yet another approach on The Wall Street Journal, claiming that the HP board of directors didn't disclose enough. He writes that "by withholding information, the HP board is only prolonging the agony and feeding the press a juicy mystery." Perhaps not on the front end, but certainly now, HP has bought a crisis communication plan that caused more pain than if it would have not reacted to the threat of scandalous publicity.

Bad Crisis Communication Plans Magnify, Multiply, And Amplify.

There are more than 10,000 HP speculation stories across the globe today. And by the looks of things, it's only the tip of the iceberg.

Even if we just look at these three stories, they are all bad, even the pro-HP piece penned by House. It makes you wonder how powerless the board of directors was, waiting for a misstep to bring the "evil" executive down. The Los Angeles Times makes it look like the board is engaged in selective ethics. And the Stewart write-up makes it look like they are holding back, perhaps even lying.

Any time the crisis flies in more than several hundred directions, you know it's botched. Now, business reporters (people who are always looking for exciting stories because the daily stories aren't always so exciting) are looking at every angle. They are making mountains everywhere and they are doing it well beyond the scope of the initial crisis, which was a mole hill by comparison.

Situation Analysis Is Always The First Step In A Crisis.

If there were any internal politics as some suggest, they do not belong on the boardroom table at a meeting to discuss disclosure in order to avoid a public relations disaster. Handling a crisis can only have one objective: minimize damage.

So, if we take the board of directors' word that there is nothing more than what they disclosed — that Hurd was engaged in a non-sexual close relationship but fudged expense reports to hide the relationship to avoid the perception of an affair — then there is no other conclusion than they botched the plan.

In this scenario, a better course of action would have been to clear the chief executive's name, make him pay the $20,000 back (which becomes a personnel matter), manage any crisis in the event it becomes a crisis, and move on. After all, in this case, there was no evidence that Hurd's transgression (which isn't even clear as a transgression) would have been as big of a blip on the media radar. Even if it was, it seems the intent — if it was to avoid a crisis — has backfired exponentially.

This leaves us with two possible outcomes. Either HP created a crisis out of nothing or there is much more to the story.

I'm not big on crisis communication rules other than treating them as situational. I look at the classic tenets of crisis communication and see guidelines that help us ask the right questions given the readily available information we have.

However, if you do want a rule to hang on your shingle, I might suggest this one: in for a pinch, in for a pound. And once you are in for a pound, you'd better hope your only motivation was to articulate the crisis as authentically as possible.

Evaluating A Living Crisis Communication Situation.

Almost every time we evaluate a living crisis communication case study, someone inevitably says that it is too soon to conclude anything. In general, I agree with that assessment. For example, I would be doing you a disservice if I said this will kill HP.

I don't think it will (operative word is "think"). I buy HP products because the hardware is good. The ink, on the other hand, is very pricey. But I suppose it's possible.

However, public relations professionals and crisis communication managers ought to know by know that they have to draft crisis communication plans based on readily available information (not all information) and build in dozens of contingencies if and when that information turns out to be inaccurate. It happens all the time.

Sometimes the people in the field make a mistake. Sometimes public perception turns bad regardless of the facts. And sometimes, clients aren't always forthcoming. They might not lie, but I have heard "Oh, I probably should have told you ..." enough times that charging clients one dollar per utterance would have meant my retirement.

Running Into Fire: Hewlett-Packard

Ask most public relations professionals what is the first thing to do during a crisis and the pat answer is "get ahead of the crisis." That was the advice given to Hewlett-Packard’s (HP) board of directors as it related to chief executive Mark V. Hurd.

And now everyone on the board is under fire, with an unlikely charge by Lawrence J. Ellison, the chief executive of Oracle. According to Ellison, he was familiar with the sexual harassment claim against Hurd. He was familiar with the debate that raged between the board of directors. And he was familiar with the fact that the board had investigated the claim and found it to be false.

So what happened? APCO, the public relations firm advising the directors, advised that the company would face a firestorm if the accusations of sexual harassment were made public, regardless of whether or not they were true. They went so far as to make mocked up newspapers to show what the damage would be like.

According to Ellison, the board was originally split 6-4 over disclosure. On Friday, board member Marc Andreessen said the decision was unanimous.* Andreessen joined the board last year. He is co-founder and general partner of Andreessen Horowitz and co-founder and chairman of Ning (another social network that has made questionable decisions recently). He reportedly played a key role in the ouster.

What Went Wrong With The Mark V. Hurd Public Relations Debacle?

Some public relations pros are still second guessing the backlash against HP. They stand by the principle to get ahead of the problem and disclose everything. They obviously don't understand media relations whatsoever.

While Hurd had allegedly been found padding expense reports to hide a questionable relationship (approximately $20,000), most members of the media would have found the sexual harassment charges a non-event if they were false. There might have been a firestorm or not, no matter how juicy the story might have been.

Michael Holston, HP's general counsel, told investors on the conference call Friday that Hurd "had a close personal relationship" but Allred's law firm clarified "there was no affair and no intimate sexual relationship between our client and Mr. Hurd."

Stated plainly, it seems like the board of directors created an illusion of a unanimous disclosure vote to show solidarity to disclose what amounts to a non-event. The tension this caused between the board and Hurd was insurmountable, ultimately leading to the resignation (despite the breach in conduct).

The fudged expense reports could have been a quiet personnel matter, easily resolved as Hurd paid them back. It was certainly a lapse in judgement to fudge them in order to hide a relationship. However, the $20,000 compared to the reported millions in severance. Some people are baffled by this settlement. Don't be. The amount is reflective of the mistake.

What One Quote Stands Out As Grossly Misguided?

It didn't come from Hurd. It was Andreessen who said "HP is not about any one person." But unfortunately, that is precisely what the new message seems to be. Andreessen has suddenly risen to become the face of the company. And, he is already named as one of the people deciding on a replacement.

That may smell funnier than anything Hurd did. But that aside, if politics and public relations pat answers weren't involved in the decision making process, this might be be a good time to ask how differently it might have played out. We'll explore this in a second post tomorrow or Thursday. In the interim, PR pros ought to consider that crisis communication is situational.

I often illustrate the point in classes by contrasting up real life crisis situations between a tiff between a homebuilder and a handicapped elderly woman and also a tiff between a homebuilder and a vandal. Students are frequently surprised at the outcomes. We handled the one that turned out right.

HP did it wrong, and now it will still face months (and maybe years) of unflattering media coverage. You know, the stuff they wanted to avoid. Worse, we suspect it may become uglier, depending on who they pick as a replacement and how well that person performs.

* Having served on many boards, directors often revote on issues to show solidarity, even if the minority has reservations. Ergo, they knuckle.

Challenging Marketers: 65 Percent Say Social Media

Almost two-thirds of advertising and marketing executives say it is somewhat to very challenging to keep up with social media trends. And, according to a recent survey conducted by The Creative Group, about 41 percent of advertising and marketing pros say the easiest way to keep up is offline.

This survey is based on more than 500 telephone interviews with approximately 375 marketing executives and 125 advertising agencies. Marketing executives tended to work for companies with 100 or more employees. Agency executives with more than 20 employees.

What Makes Social Media Challenging For Marketing Pros?

A good portion of the challenge has to do with the constant changes taking place in the space, prompting complete tactical changes within the individual networks. To remain competitive, every social network is constantly updating and adding new features. Some are small. Some are complex. And some take social networks down.

Not all of the changes are tied to platform developers. Some networks suffer from their own success. For example, growing popularity with Twitter has led to increasing challenges caused by over saturation. With a random review of the last 20 tweets on my stream, 18 of them were links to other sites and posts.

One second later, the same. One second later, the same. One second later, a hashtag conversation session claimed half.

This doesn't even consider all the new platforms, networks, sites, forums, and apps emerging daily. But what's worse for marketers is this weird standard to continually drive "demand" on the most popular networks at the moment.

For example, marketers on Twitter have to explain why the company account stays flat for a week or two (never mind they are creating relationships on other forums). When url shorteners are accidently flagged as spam on Facebook, people temporarily panic. If two people stop following a feed or Facebook page, they blame it on the last little bit of content shared.

The Most Common Problem With Social Media Programs Today.

We see it daily. Knee jerk, reactive thinking that keeps marketers chasing the latest tactics, tricks, tips, and changes on whatever the most popular social media program is today. And, somewhere along the way, they've created an erroneous expectation that not only do they have to convince people to visit their sites, but they also have to be the most "popular" on every social network they join.

It's possible, but not probable. Some companies, products, and services are better suited for one network than another. But beyond the obvious, the real mistake is to continually case tactics without considering strategy. Strategy has nothing to do with social networks. It has to do with communication.

If there is any irony in the findings from The Creative Group, it's mostly that marketers and agency pros answered their own question. When they want to learn something about online marketing, they aren't looking online. They're looking offline. But even offline, they aren't looking to learn the right stuff.

Thinking First: Fresh Content Project

If someone asked me right now what is the most important skill set a marketer or public relations professional needs to learn today, it would have nothing and everything to do with the Internet. It's called critical thinking.

Critical thinking is the foundation upon which all of their other decisions will be made. And, more importantly, it will help them realize that everything they thought to be true or learned from a teacher (or speaker) is almost always wrong for the needs and situations they will face once they work in the field.

After all, if circumstances didn't continually bend the rules that came before, we'd still be running vintage duotone ads to peddle other people's junk. Well, all right, maybe that's a bad example. Or maybe not. The campaign I'm linking to might work for Skype, but not for AT&T. And that's the point of several fresh content picks listed below. Think before you believe tip links.

Best Fresh Content In Review, Week of July 26

• Sentiment Analysis And The Problem With Computational Analysis.
When Jed Hallam opened a much needed discussion on sentiment analysis, people took notice. And while most of them noticed his follow-up post more, the initial post has much more meat. The slickness of computational analysis — spitting out that a brand has a positive sentiment — based on supposed online mentions, has little to be desired. Without vetting the analysis, you really don't know what is going on with a brand, especially if it happens to be those stacked up with a common name. Think before you report.

• 10 Ways Geolocation Is Changing The World.
Guest posting and cross content posts certainly have advantages. I may have never seen Rob Reed's post on geolocation marketing had it not also appeared on Collective Thoughts. I'm glad it did. Reed, who is also the founder of Max Gladwell, provides ample examples and ideas around mobile or proximity marketing. We've often said that mobile is the future of the Web, but when you look at Reed's post, you realize that geolocation is also what will usher in most brick and mortar to the Internet in any number of creative ways.

• Digital case studies: Punch Pizza.
One example you won't find on Reed's list was recently featured by Arik Hanson. Punch Pizza doesn't waste time playing by social media and social network rules. Instead, it looks at the platform and wonders how those various networks might help introduce its pies. Flickr became its coupon corner. It gave away pizzas for football fans when their teams lost. They've also capitalized on current events and hosted several creative contests. What makes this case study great isn't the numbers as much as the thought behind the campaigns. Punch Pizza asks "why not?" instead of "why?"

• Brand Crisis Revisited: The Silence Of The Crisis Police.
One of the reasons Bob Conrad resonates is because he doesn't bend to convention, especially when it comes to how to handle a crisis. In this post, he tackles the apology, empathy, and getting ahead of the problem, all three of which have become the pat answers for almost everything in the crisis communication arsenal. When some people critique a crisis going afoul, these are the most mind-numbing of the bunch. It's not that they are wrong, but they deny any semblance of situation analysis. Sometimes the laundry list that is taught is not the right laundry list to employ because the shirts aren't really dirty.

• Social Media Spending To Double This Year.
If there is any doubt whether social media is already mainstream for modern marketing, take a look at the report racap from Brian Solis. Almost 20 percent of most marketing budgets are now dedicated to social media. In fact, Internet marketing has taken over the top skill sets that employers are looking for from marketers. They simply cannot exist without some semblance of social media knowledge. It doesn't even matter if you are talking about B2B or B2C businesses. Most companies have finally figured out that they must market where the people are and the people are online.

Want to review more Fresh Content picks? Click on the Fresh Content label or join the Fresh Content Project on Facebook.

Branding: Personal Branding And Reputation Are Illusions

The more people read about personal branding, the more confused they get. It's especially true for public relations professionals and their clients, given how many coach spokespeople to supplant their own name with the company name during interviews.

Geoff Livingston's recent poll on the Livingston blog is a testament to this fact. Almost 60 percent of survey participants could be classified as undecided. And why wouldn't they be? For every post about how to build a personal brand, there are three more that make fun of personal branding.

Why is personal branding such a complex topic?

For starters, branding is a complex topic. When it comes to organizations, people frequently confuse identity with branding. It seems to take a long time before they understand that a logo is not a brand. Logos are merely representations of the brand relationship between the people and organization. Basically, when people see the logo, marketers want those people to attach the context of a fulfilled brand promise to it.

It’s easier to understand than it sounds. Before the BP logo was covered in oil, the BP sun thingy was meant to symbolize its commitment to clean alternative energy.

This brand promise has since imploded because the relationship cannot sustain the weight of reality. Green is great, except when it's blackish brown and covering animals.

Before you can understand personal branding, you have to understand organizational branding. Ironically, most personal branding coaches teach organizational branding and pass it off as personal branding. So you might know more than you think.

The downside is they lied. Personal branding doesn’t work like organizational branding. Personal branding is trickier because it can’t do what organizations do. Organizations get to “make up” their original brand promise out of thin air. People don’t.

Whatever came before you has already established the foundation. You’ve been working on it since the day you were born, with people reinforcing it along the way.

This can be good or bad for you. (I think it's bad, but that's another story.) But regardless of whether you think it's good or bad, it lays the ground work. And that makes changing yourself a bit more complex than buying new sunglasses.

Sure, some personal branding folks often suggest you chop all that baggage off (which isn’t impossible) and then pick one of a handful of models to reinvent yourself. Let's look at the three most common.

1. Be who you are (assuming you know who you are).
2. Be who you want to be (assuming you know what that is).
3. Be what will get you ahead in your career (a very popular premise).

On their own, none of these ideas really "work." They don't work because, generally, people are trying to build their personal brands around outcomes they want (much like companies do). That's not about who you are or what you are. That's about what you want.

Considering three common models for personal branding.

1. Transparency. That one is easy to dismiss. Just ask Tony Hayward what he thinks about it. Or Mel Gibson? Or Tom Cruise? I’m a truth nut, but let’s face facts: transparency can be stupid.

2. Vision. It sounds really good, but it doesn’t consider that most people don't work to be "who" they want to be. They work for "what" they want to be. And that means bending to the audience's will much like some organizations try to do. The real problem with number two is that "who you are" and "what you are" might not be the same thing. A little transparency, much like the aforementioned, will crash all your hard work down.

3. Act The Part. Right. Ask Howard Stern about that one. He often found himself caught between the person he plays on the radio and who he was at home. Those lines blurred, even in public. Take a look on Letterman, 1987; 1993; 2009.

4. Reputation. I didn't list it before because it's not a personal branding model. It is, however, an alternative. This concept tosses out personal branding and attempts to focus on reputation. Simply put, reputation is based on not what you project, but what you do. It has some merit, but advocates neglect that reputation is easily distorted.

People are too complex for personal branding.

The book I've been working on for some time is about this very subject so I tend not to write about it too much here. But given the confusion being created in social media (a place where some people try to reinvent themselves based on social media advice), I thought I'd toss out two ideas. The one above and the one below.

Most people are not cognitively trained to accept how complex other people are.

We tend to remember about others what we share about ourselves — tiny slivers. I was reminded of this simple fact when I shared my A7X review. One of my cousins said she would have never guessed I like metal. (I like many things, across all spectrums, from classical to hip hop.) Another friend said the same. But another, who doesn't know me as well, was not surprised.

So, only two-thirds ever got some unspoken memo. What does that mean?

It's subtle, but it means two-thirds have a slightly changed perception about me, maybe favorably because they like A7X too. For a bigger audience, an equal number of tiny positive, negative, or neutral reactions. And that's just about music.

Let's say we add any number of more personal topics (religion, politics, economics, philanthropy) or minute-by-minute details (ranging from whether I go to the gym or if I accept an invitation to speak in Asia). All the while, keep in mind that masses of people will only remember one or two details (positively or negatively) about you.

So what do you get? A crapshoot. Even if you pick what you share carefully, most people will only remember what fits with a central theme that they create for themselves. You cannot control it. It is what it is.

Political candidates know this all too well. If one of them says they like A7X, people might accept it. But if the other one says the same thing, people might reject it. But more than that, it isn't limited to public figures. It could be anyone. Imagine knowing a few more details (likes and dislikes) about an elementary school teacher. Parents might not be too comfortable learning about a hidden piercing or radical political viewpoint or some other "weirdness."

There's the rub.

If we accept personal branding or reputation is more than identity (styles, clothing, etc.), then the only choice is to find common ground between who you are and what you are and what you are doing and where you are doing it while maintaining authenticity at the same time, assuming you don’t work for a company that is fundamentally different from you.

Do you know what? That's not personal branding or reputation at all. It's something else.

It's called character. And it cannot be taught as much as it can be learned. And, if you ask me, people ought to pay much more attention to that than the labels others might thrust upon them. Branding is better left on the doorstep of organizations.

Being Transparent: Sometimes It's Stupid

It has been months, but people are still talking about it. Last year, Spirit Airlines floated the idea of charging a "passenger usage fee" to cover the costs associated with buying a ticket. Specifically, it would charge a $5 to $10 fee if you booked a flight anywhere other than a Spirit Airlines ticket desk.

This year, Spirit Airlines was considering the opposite. The new fee idea charges passengers for getting help from one of its employees (hat tip: Andrew Weaver. It's not all that novel, given that some airlines already charge as much as $25 to place a reservation over the phone.

And while it might not happen in the near future, CEO Ben Baldanza is not morally opposed to charging a fee to use the bathroom. The justification for it, and all the other charges (including carry-on bag charges and seats that don't recline), was to keep the base fairly low.

Refreshing Transparency Or Just Plain Stupid?

Baldanza clearly has the fragile brand theory on his side. He's always inventing ways to make what most people consider a necessity much more like a luxury. He's unapologetic for it.

Spirit Airlines is fighting to be the low fare leader and treating people a little less favorably than parcels on a FedEx flight. Ultimately, customers have a choice. And some people, reportedly, like it.

This truly blows some holes in many modern business theories. Spirit Airlines customers aren't looking for relationships. They aren't looking for comfort. They aren't looking for anything but the cheapest possible fare to get from point A to B.

The online poll on USA Today Travel shows 59 percent of the people think it's a bad idea; 23 percent think it's a good idea. And 19 percent think it's a good idea if it speeds up boarding because many delays are created by carry-on luggage. The irony there is that the airlines industry created the carry-on problem because of mishandling bags and charging to check them.

Here's the thing. Any company can do whatever it wants, and most of the backlash seems to be from concerns that other airlines will adopt policies that seem idiotic on their face because a heavy enough percentage of people are willing to go for low air fares.

At the same time, Baldanza has succeeded in ginning up publicity in his quest to make Southwest Airlines look like a luxury flight. It's crazy, but seems to be working for him and his airline.

Free Publicity For Silly Ideas Works Until They Stick.

However, there is a caveat. What works today will eventually not work tomorrow. Right now, given the economy, people are hustling and bustling to cut a few dollars anywhere they can. Once the economy stabilizes, assuming the federal government cranks back its aim to make profit a sin, then price conscious flyers might not be so keen on the Baldanza concept.

If that happens, even if all airlines followed Spirit Airlines' lead, Baldanza will be remembered for the push to make everything an extra. Personally, I'm not sure if such a concept is sustainable. Nobody really wants to need a day of recovery after a flight.

Overall, customers want a fair price for what is being promised. The problem for the airline industry is they struggle to keep their promises because most of them allowed price wars to be their only product differential. Add to this the constant pressure for catering to people who don't care about anything but price, and sooner or later you run out of things to cut.

It seems to me that Baldanza is smart for the short-term gain. But over the long haul, people will remember him as the guy who considered charging for bathroom privileges. In a down economy, people might take it. In an up economy, he's a jerk.

Sometimes being transparent is stupid. I don't mean in an intellectual way. I mean in a long-term strategy kind of way. Not all ideas need to spill out of your mouth. And not everything that spills out of your mouth needs to be published ad nauseum, especially when people figure out Baldanza is trying to find a way to charge you for not speaking to a live person or charging you for speaking to a live person. That is his real dream come true.