Archive | September 2011

The Great Fear

I had the pleasure of meeting Staffan Thorsell of SJT Communication online through our mutual interest in corporate communication.

He calls a corporations’ resistance or fear to communicate “The Great Fear”. We spoke about how it’s often easier for corporations to say nothing rather than to be wrong, but that not communicating is actually a very strong form of communication in itself. Read the full write-up of our conversation over at Staffan’s blog.

Netflix, this one’s for you: the art of a good apology

This piece is part of The Washington Post’s On Leadership roundtable, which this week explores apologies — in light of CEO Reed Hastings’ ill-received mea culpa for Netflix changes.

“The only correct actions are those that demand no explanation and no apology,” Red Auerbach said.

If only we could all live up to the famous coach’s standards. But since we can’t, we can at least all aspire to making straightforward explanations and clear apologies.

Last week’s bizarre mea culpa by Netflix CEO Reed Hastings was neither. He began an email to subscribers with an apology, which gave the initial impression he would be reversing recent price increases. Instead, he apologized for the way he’d delivered that news, and went on to describe a new business model that could be more inconvenient for customers.

Still, many CEOs do get it right. When they do, it’s typically because they took control of the apology themselves, addressed the issue quickly, picked the right channel to deliver their mea culpa, offered a concession, and really meant it when they said they were sorry.

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Should a CEO Explain Strategy Shifts?

In 1998 Reed Hastings founded Netflix, the lar...

Originally posted on financialtimes.com

THE PROBLEM

On Sunday, Netflix CEO Reed Hastings apologised for the way the company had handled a decision to raise prices and split its streaming and DVD services. He said: “I should have personally given a full justification to our members.” Is he right? Do explanations about big strategic changes need to come straight from the CEO or do they just need to be good explanations?

THE ADVICE

The academic: Paul Argenti

“I messed up. I owe everyone an explanation,” wrote Reed Hastings in a missive that appeared in my inbox at 3:13am. My first thought on reading this at 6am was that he noticed that my rented copy of Shawshank Redemption had languished in Martha’s Vineyard for too long, and he was apologising for charging me a year of fees. But no, he was apologising for weak communications! Are you kidding me?

In my view, this went too far. Yes, the CEO needs to be involved in strategy execution, but I didn’t even know this was a problem until Reed raised it to a level where everyone I know wanted to discuss his letter.

Explain the new model, charge me for whichever of the two businesses I opt for, but no mea culpa is necessary here, Reed. Next time, stay above the fray.

Read the rest of the post including advice from an executive and a PR professional in the Financial Times.

September 11: In Memoriam

Most Americans have the same hollow pit in their stomach when they think about 9/11 as they did for JFK’s assassination a generation earlier. I was in London that fateful day watching in disbelief, then could not return to my family for over a week.

What stuck with me the most during those early days, however, were the heroic acts of leadership by a number of executives trying desperately to boost spirits and focus on returning to normality.  I interviewed a number of people and collected my thoughts in a Harvard Business Review article that was published a bit over a year later.  The article was republished this spring in the Japanese version of Harvard Business Review as well. It’s nice to know that some positive lessons can still be taken away from something so tragic.  I hope you enjoy reading the article again or for the first time.  Drop me a line to let me know what you think.

Paul Argenti

NPR Marketplace Interview on Buffett Investment

 

I was recently interviewed on NPR’s Marketplace regarding Warren Buffett’s recent investment in Bank of America. Buffett both his reputation and his money in BofA. Listen to the interview here:

What Warren Buffett wants… | Marketplace From American Public Media.

The Evolving Myth of Bin Laden

I was interviewed by PRI’s The World on the Evolving Myth of Bin Laden. You can listen to the interview: The Evolving Myth of Bin Laden and read a short summary of it here.

How well did TEPCO Perform?

Originally posted on the Page Society Page Turner Blog 

Last March, I blogged on “Page Turner” about the challenges and opportunities for Tokyo Electric Power Company (TEPCO) as it tried to deal with the early days of its crisis in Japan. We wanted to see how well they did in seizing the opportunities I offered up back then as we launch our new Page Society website. Here is my update:

Overall, TEPCO has not faired well: it announced a loss of $7.4 billion, the company’s bond rating has been cut to junk, and TEPCO has struggled to communicate with some very angry shareholders. Add to this the fatal radiation levels still being found in its plants, and you have what everyone would most certainly consider a major crisis.

But let’s take a closer look at how they did in terms of the opportunities we discussed back in March:

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Tokyo Electric Power’s Communication Challenges and Opportunities

Originally posted on the Page Society Page Turner Blog 

As Japan sorts through three separate disasters: the earthquake, the tsunami, and the potential nuclear meltdown, the media has focused on the disaster appropriately from the perspective of lives lost, and the potential for things to get even worse. Lost to the back pages, however, is a potential disaster looming in the background for Tokyo Electric Power Company (TEPCO).

For those of you old enough to remember, we have seen this kind of disaster in the making before at Three Mile Island (TMI) in 1979. I was just starting my career when this accident unfolded on my birthday that year. All of us held our breath as one of the worst handled crises turned into a media frenzy of oversized proportions as a result of poorly handled corporate communications and a popular movie (The China Syndrome, which had come out only two weeks before about a nuclear meltdown and cover up). What can TEPCO learn from that crisis, and how can TEPCO and Japan seize the opportunity that lurks right around the corner in every crisis?

Here are five opportunities waiting for TEPCO to carpe diem on.

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A New Way of Talking – From Crisis to Growth in Corporate Communications

Excerpt of an article written by Tuck Communications published in Tuck Today in June 2010

Remember the Big Three auto executives who flew to Washington last year to testify about the condition of the their industry and (for General Motors and Chrysler) to request federal aid? They traveled in three corporate jets, raising a firestorm of criticism at a time when Detroit autoworkers were being laid off by the thousands. It was, as one journalist pointed out, “stone-cold tone-deafness” that resulted in a further piling-on of anger for the U.S. automotive industry.

But for Paul Argenti, professor of corporate communication at Tuck, the more important story was what happened immediately afterward: Ford, realizing that it was being grouped with GM and Chrysler as a failing business and a villain, launched “The Ford Story” over the next weekend.

Ford’s communications program was created specifically for users of social media—Twitter, blogs, comment-enriched news, Facebook, YouTube, and other online applications. Its website, subtitled “Ford is different…join the conversation,” urges visitors to “get involved” and keep up with a live chat. A large portion of the home page is a string of links to Ford’s presence on social media or directly to the company itself (“Got a cool idea for Ford? Let’s hear it!”). Articles address new technologies, issues of social importance (for example, drivers distracted by texting), the ease of online purchasing, and, ultimately, quality and value.

And The Ford Story keeps it eye on the social-media prize: current opinion. “Ford’s focus was and continues to be on its strategy, products, and successes today, not yesterday or tomorrow,” says Argenti. “All of Ford’s communications and marketing is being driven by its turnaround strategy, and its use of social media is masterful.”

Read the rest of the post at Tuck Today

The Day After

Excerpt of an Article written by Tuck Communications in Tuck Today published Fall 2009

It may be premature to call the greatest economic downturn since the Great Depression “over.” As summer turned to fall, however, there was a collective exhalation as many realized the worst of the recession was now behind us. But as we emerge now from our financial bunkers, it is to a landscape changed. We asked five Tuck faculty members for their insight into what lessons can be drawn from this bruising chapter in our financial history—who were the winners and losers, who was successful in responding to the downturn, and what we can all learn as breaks in the clouds begin to appear.

Paul Argenti: Authenticity Above All

Paul Argenti starts every one of the talks he’s given over the last decade by reminding the audience how little most people trust big business. Nevertheless, the numbers in a recent poll were still shocking—across the world, 62 percent of people trusted business less than they did a year before; in the United States, the number was 77 percent. “There really is an overwhelming negativity in the air,” says Argenti, a professor of corporate communication at Tuck and editor of Corporate Reputation Review. While the banks and financial companies that directly precipitated the financial crisis have been hardest hit, that negativity has rippled out to health care, insurance, and even consumer products and technology.

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