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.
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 Read More…
I recorded another video for the Tuck School of Business on why executives should pay attention to Occupy Wall Street. Statistics show an increasing problem with Americans’ lack of trust in businesses. Occupy Wall Street raises issues which corporations should not ignore.
You can watch the full video here.
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.
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