Responding to the Goldman Sachs Resignation Letter

I’ve been following the response to Greg Smith’s resignation letter in the New York Times with great interest over the past several days. The letter has been analyzed, parodied and discussed at length. What I find particularly fascinating is that the response brings together a number of issues I regularly look at:  the power of social media in shaping public discourse, the importance of corporate reputation, as well as communication strategy.

The Atlantic Wire reported that the letter cost Goldman $2.15 billion in the markets the day it was released, showing the value of reputation, particularly on Wall Street in today’s environment. In the post-Occupy Wall Street environment, large financial institutions are looking to rebuild trust with the public, clients but also their employees. Greg Smith’s resignation was clearly written with this hostile environment in mind.

An internal memo by Goldman Sachs CEO Lloyd Blankfein was published in Bloomberg shortly after it was sent out to employees that had clearly been written with an eye to being released publicly. Blankfein tries to emphasize that Smith represents a minority opinion and that Goldman works hard to do what’s right for clients. His quick response to try to maintain trust with his employees and the public with a well crafted memo was smart, but not sufficient to quell public discourse.

The Associated Press published an article in the Washington Post, entitled, “Goldman Sachs muppet essay only the latest in a proud tradition of bridge-burning”. It explores the human impulse to have a “Jerry Maguire inspired farewell” and therefore part of the reason this letter struck a nerve and went viral. I’m quoted in the article talking about how this is often a way for employees who feel powerless to enact change to feel like they have a chance to take back some of that power.

The social media environment has kept the letter alive through sharing, but also interacting with the letter through parodies–everything from fake responses from Blankfein to sharing of resignation letters from the past. The New York Daily News did a great roundup of some of the best parodies out there, but one of my favorites is a fake resignation letter from the New York Knicks coach Mike D’Antoni (who really did resign the same day as Greg Smith) published in the Wall Street Journal.

Depending on Greg Smith’s future career goals, publishing his resignation letter in the New York Times may not have been wise, but it gives us another opportunity to bring reputation, trust and the power of social media back to the forefront of conversation–and hear a few good Darth Vader jokes as well.

How Apple Gets Away With Things Other Companies Couldn’t

Yesterday I wrote a post for US News and World Report’s Economics blog, entitled “How Apple Gets Away With Things Other Companies Couldn’t”. It is already spurring debate over on their blog–I think it and some other recent posts on the same blog by my colleagues from the Tuck School are worth a read. You can read my post here and see the rest of the Economic Intelligence blog here. 

Inside Fukushima – in pictures

I’ve written several posts about TEPCO and what happened in the aftermath of the earthquake and tsunami on March 11 last year. TEPCO recently let a group of journalists and photographers into the Fukushima nuclear plant where three reactors suffered meltdown after the earthquake. The communication strategy behind this is worth a post in itself, but in the meantime the Guardian has posted a slideshow of fascinating pictures from the visit.

Inside Fukushima–in pictures

More on Blankfein and Same-Sex Marriage

Knowledge @ Wharton wrote a follow-up post to the New York Times article I was quoted in regarding Blankfein’s new role as spokesman for same-sex marriage. Some excerpts are below and you can find the full article here. 

“I’m Lloyd Blankfein … and I support marriage equality.” Those are the words used by the chairman and CEO of Goldman Sachs in a new video spot produced by The Human Rights Campaign, a national organization that advocates equal rights for gays, lesbians, bisexuals and transgendered people.

Blankfein is not the most obvious spokesperson for such a campaign. As an article in The New York Times points out, he has been “a lightning rod for Wall Street critics” taking aim at exorbitant executive pay packages and the role Goldman Sachs and other investment banks played leading up to the financial crisis.

…

Komen leader’s latest apology about Planned Parenthood fiasco goes only halfway

Jena McGregor of the Washington Post’s On Leadership section posted about Nancy Brinker, founder and CEO of Susan G. Komen for the Cure’s half-hearted apology about the Planned Parenthood de-funding. I couldn’t agree more with Jena’s assessment of the apology using my framework. I’ve posted it below and  you can see the original article here.

In the world of crisis communications, what has the potential to be more damaging than not issuing an apology? An apology that reads like only half of one.

Nancy Brinker’s response to Sally Quinn’s open letter to the Susan G. Komen for the Cure founder and CEO includes an admission that she made mistakes and an apology to those who were disappointed by the nonprofit’s decision to pull its funding to Planned Parenthood. (Komenlater said Planned Parenthood could reapply for funding.) Brinker says she has learned a lot, including that “that we in women’s health organizations must be absolutely true to our core missions, and avoid even the appearance of bias or judgment in our decisions.”

But what she does not say is more telling. Brinker does not say exactly what she is sorry for. She does not explore what mistakes she made. And she does not address several of the points in Quinn’s letter, from the ambiguity of Komen’s decision to allow Planned Parenthood to reapply—though not necessarily be funded—to why her institution’sshifting explanations for its controversial move were so confusing. It’s also interesting that it seems to have taken criticism from Sally Quinn (who describes herself as a longtime friend of Brinker’s in Washington), more so than the outrage of millions of citizens, to elicit such an admission.

Blankfein to Speak Out for Same-Sex Marriage

The New York Times Dealbook recently asked me to comment on Goldman Sachs CEO Blankfein’s decision to speak out for same-sex marriage. I have posted some excerpts including my quote below, and you can read the full article in New York Times’ Dealbook here. 

Lloyd C. Blankfein, the chief of Goldman Sachs who has become a lightning rod for Wall Street critics, might seem an unlikely advocate for same-sex marriage. But his credentials — a public figure in a conservative industry — could make him a powerful voice for that cause.

The Human Rights Campaign, a national organization that promotes equal rights for gay, lesbian, bisexual and transgender people, has persuaded Mr. Blankfein to be its first national corporate spokesman for same-sex marriage, an issue that will come up for a legislative vote in several states this year, including Washington and Maryland. Fred Sainz, an executive with the Human Rights Campaign, said the organization sought Mr. Blankfein, in part, because he is “an unexpected messenger.”

…

Paul A. Argenti, a professor of corporate communication at the Tuck School of Business at Dartmouth, says Mr. Blankfein’s decision isn’t likely to have any positive impact on the reputation of the firm — or Mr. Blankfein.

“If you are a Goldman employee and you are gay or contemplating coming out, this is great,” he said. But for Goldman and Mr. Blankfein, the issue of same-sex marriage has nothing to do with what Goldman Sachs does. “If Mr. Blankfein was taking a radical stand on pay you could say wow, that’s big. But equality is simply not an issue you associate with Goldman.”

Still, the campaign is sure to turn heads on Wall Street, which despite having made progress on equality issues over the last decade, is still considered to be a male-dominated, testosterone-driven place.

…Read the rest of the article here.

Related articles

• Same-Sex Marriage’s New Spokesman: Lloyd Blankfein (blogs.wsj.com)
• WATCH: Goldman Sachs CEO Supports Same-Sex Marriage (huffingtonpost.com)
• DealBook: Blankfein to Speak Out for Same-Sex Marriage (dealbook.nytimes.com)

Biggest PR Blunders of 2011

Business Insider published a piece right before Christmas on the public relations blunders in 2011, including my list of the top blunders of the year. Their article included commentary on why these blunders are getting more attention, including the impacts of the current economic environment and social media. You can read the full article here and find my list of biggest PR blunders of 2011 below.  

I also have a video up on YouTube where I talk about the top 3 public relations blunders of the year.

Biggest Public Relations Blunders of 2011

Communications in the MBA Curriculum: The Missing Link

I had previously shared on this blog an article published in BusinessWeek: Public Relations: Coming to a B-School Near You. Ken Makovsky, a Contributing Writer at Forbes has posted a response to the research discussed in that article and on my initiative with the Public Relations Society of America to get communications and public relations content in top MBA program curricula.

We are working on some great initiatives as it pertains to the management communications curriculum at the Tuck School of Business and I am looking forward to sharing the results of our initiative. I have taught Management Communications, Corporate Communications and Corporate Responsibility classes at Tuck in the past. As mentioned in the article, Tuck’s own alumni surveys show that ten and twenty years out alumni rank their communication classes as the most valuable classes they took at Tuck, even if they didn’t think so at the time. 

Please find the original Forbes article here.

Forbes
Ken Makovsky, Contributor
The Missing Link in B-Schools 

For years, the public relations profession has been suffering from an educational void in the nation’s graduate business schools, where CEOs and other future business leaders are trained.  But could there be some light at the end of the tunnel?  Maybe.

Earlier this month, businessweek.com wrote about recent research commissioned by the Public Relations Society of America, which found that 98 percent of the 204 U.S. business leaders polled believe  that business schools need to incorporate instruction on corporate communication and reputation management  into the MBA curriculum.  Ninety-four percent of executives believe that top management needs additional training in core communications disciplines.  Only 40 percent of the respondents, the article said, rated their recent MBA hires as “extremely strong” at responding to crisis and building and protecting company credibility. 

Spearheaded by PRSA, Paul Argenti, communications professor at Dartmouth’s Tuck School of Business, a pioneer in this area,  will lead a pilot program of four other graduate business schools in 2012-13 to develop a public relations curriculum for coursework consideration.  The hope, the story says, is that the program will be incorporated into the curricula of these schools for the 2013-14 academic year.

The only hitch is that the four other schools have not yet been selected, and there is no indication of who they might be or whether the interest that has obviously been missing for so long finally exists.

Hopefully Argenti’s experience will be persuasive.  He says that, in surveys of Tuck’s MBAs on which courses were the most important in terms of what they actually  use on the job, after graduation, corporate communications always ranks #1 or 2.

All of this makes me hark back to May 2007, when I gave an acceptance speech on this issue following my selection to receive the PRSA-NY John Hill Award for Distinguished Achievement.  After decrying the fact that not one of the top five business schools taught strategic communications, and that in today’s internet world businesses only exist via public consent, I made a suggestion that I thought would help bring about change.

I urged PRSA to organize corporate communications heads of leading Fortune 100 companies to motivate their CEOs to encourage action in the nation’s business schools.  After all, money speaks.  If the CEO of a Fortune 100 company calls the Dean of Harvard or M.I.T.’s graduate school of business, he or she will listen.  But this will not happen unless we, as communicators, push such action.

If we do this on a coordinated basis,  supported by the proof of need shown in the survey cited above plus Paul Argenti’s initiative, this time (after previous tries) the bell should ring.  And hopefully the schools by now finally recognize that there is a whole new set of rules to play by … and it’s in their self-interest to play the economics to their benefit.

Related articles

• Public Relations: Coming to a B-School Near You (paulargenti.wordpress.com)
• A Better MBA: Why Business Schools Should Teach PR (prsay.prsa.org)
• Why B-Schools Need to Teach PR (usnews.com)

Why Occupy Wall Street is More Significant Than You Think

This was originally posted on the Arthur W. Page Society Blog. You can find the full original post here. 

Last month, I had the opportunity to visit the Occupy Wall Street encampment in Zuccotti Park with my daughter Julia just a couple of days before it was dispersed by the NYPD.  It immediately brought back memories of my high school days in the ‘60s and my time at Columbia in the ‘70s.  The clothes, the look of the pamphlets, even the smells were the same.  I was particularly fascinated by their incredible focus on communications and media.  But something was very different.  While the protests in the 60s and 70s were clearly for something (the end of the Vietnam war) this movement is very squarely against something—big business with no outcome that will ever satisfy the group and make it go away.  Some may believe that this lack of focus makes the occupy movements in New York and elsewhere less worrisome or even irrelevant, but I think it is more insidious than most people in business realize.  Let me explain why.

Public Relations: Coming to a B-School Near You

Professor Argenti in Bloomberg Businessweek on the Public Relations Society of America is trying to bring corporate communication and reputation management into the MBA curriculum, where a new study suggests it’s sorely lacking. This article was originally posted on Bloomberg Businessweek.

ublic relations is a topic that has long been a lonely stepchild in most MBA curricula, touched upon briefly, if at all, in soft-skills classes that teach writing and communication. That may soon change, thanks to a push by the Public Relations Society of America (PRSA), the largest industry group for public relations professions, which is trying to get business schools to take a more serious approach to teaching MBA students the art of corporate communication and reputation management.

It’s a skill that is sorely lacking, according to a new study the PRSA commissioned earlier this fall of senior U.S. business leaders. Of the 204 respondents, 98 percent said they believe that business schools need to incorporate instruction on these topics into the MBA curriculum, and 94 percent believe that top management needs additional training in core communication disciplines. Only 40 percent of the executives surveyed rated their recent MBA hires as “extremely strong” at responding to crisis and building and protecting company credibility.

One of the first efforts to encourage business schools to start thinking more about corporate reputation management and strategic communication will commence in the 2012-13 school year, when five business schools will participate in a pilot program spearheaded by the PRSA. Dartmouth University’sTuck School of Business will be one of the five schools participating; the other four schools have not yet been named, the PRSA said. Paul Argenti, a Tuck professor and author of the textbook Corporate Communication, is developing the curriculum for the pilot, which can be adapted for full-semester, mini-semester, or seminar-format courses. The class will include lessons on communication strategy, media relations, international corporate responsibility, reputation management, and investor relations. In addition, students will be asked to participate in crisis communication simulation exercises and review case studies on the topic. The hope is that all the leading business schools will incorporate this class, in some format, into their curricula in the 2013-14 academic year, the PRSA said.

Bloomberg Businessweek‘s Alison Damast recently spoke with Argenti about his role in developing the new curriculum and why he believes it is important for MBA students to have a background in this area. Here is an edited transcript of their conversation:

What is the business school world’s current approach to teaching public relations and reputation management skills?

Most business schools have some basic communications training, maybe a writing or speaking class, but I think Tuck is the only school that has had a required class on this subject for 30 years. When I came to Tuck in 1981, I was hired to teach its first corporate communications class, so I put together a required course in communications and the school has been doing it ever since. We survey MBAs asking them which courses they think are the most important, and they say the corporate communications class is No. 1 or No. 2 in what they use on the job when they graduate. The course has included for many years writing, speaking, and corporate and cross-cultural communications. This year we’re adding a whole host of other topics, from negotiations to reputation management. For example, we’ll have a session where students learn to prepare for testimony before Congress, and a guy who teaches acting at the college will be doing a session on personal presence. The gut of the class is being able to think strategically about basic communication strategy. This area has become critical for business leaders, CEOs, functional heads, and other people, but they know so little about it and there is nowhere they can learn this material.

Why did you decide to get involved with the PRSA on this effort to promote better corporate communication skills among MBA students, and do you think this pilot will succeed?

Over the last 30 years, there have been at least four or five efforts to teach communications at business schools on a broader level, but none have really taken off. When the folks at the Public Relations Society of America approached me, I told them I’d be happy to help and we basically stuck with it this time. A couple of people really pushed it and got the job done. I think the reason this could be successful is because it’s not like five professors sitting around a campfire and trying to see how they can make it work. This effort is thousands of people who work in public relations saying, “Hey, this is important and we need your help to get it done.” If we can get a critical mass of schools teaching these skills, then it just becomes something that everyone gets interested in.

I understand that five schools, including Tuck, will be involved in the pilot program next year. Tell me a little bit about the curriculum you’ve designed for these schools and how you foresee this being integrated into MBA programs.

I think we need to start small. If it is in the curriculum at all, that would be a plus. Existing classes that teach presentation skills and writing would be the obvious place to incorporate this. Schools can use my textbook and there’s an instructor’s manual that I’ll tailor for the needs of each of these schools. I’ve written 100 different cases on this topic, and there are a number we are rewriting into shorter cases that, for example, someone who works in public relations could come in and teach without a lot of training. For example, one case I wrote is about Starbucks (SBUX) and how it dealt with the battle over fair trade coffee. I’ve also written a lot of experiential exercises, like one I’ve done on Toyota (TM) that looks at a situation from the perspective of a Japanese executive, a U.S. executive, and someone from the Japanese and the U.S. press.

Why do you think these communication and reputation management skills are so essential for business leaders today?

If you ask CEOs what is important to them and how much time they spend communicating, they’ll tell you it is a huge part of their job. But it has sort of been cordoned off as an area of specialty, and I don’t think people realize the power of it. I was putting together my list of public relations blunders for the year, and I had so many candidates I didn’t know where to stop, from Anthony Weiner to Netflix (NFLX). When you think about it and go down the list, these things don’t have to happen. Most of the time these executives shoot themselves in the foot. Crisis communication has become so important and there is a tremendous amount of differentiation in management today based on reputation and clear articulation of strategy. Now we have to convince the deans and the business schools that this is an important thing to teach students.