My Three Cents

Toyota Exhausted

2010-02-08T14:33:00.009-05:00

The so-called “quality” car — that has stood out for decades since the foreign car invasion of the U.S. many moons ago — has finally “collapsed,” so to speak … or at least its reputation has. Its business may follow, if the blunders continue and Toyota fails to publish a “repair plan” that customers can believe in.

First the company said it was the floor mats that caused the stuck-accelerator problems, then electrical issues in the accelerator itself and lately it is braking problems in the Prius. There has also been a parade of communications mistakes, while people are dying due to these problems.

The headline in Sunday’s New York Times is “Toyota Has Pattern of Slow Response on Safety Issues.” Authors James Kanter, Micheline Maynard and Hiroko Tabuchi cite design changes to correct safety issues that the company has been making — without telling customers about the underlying problems with cars already on the road. Yet according to the NYT, the CEO has balked at questions regarding whether the company has ever withheld safety information.

Further, while the CEO has issued a couple of apologies, he has been delegating the task of reassuring American consumers on various key TV shows and plans to do the same at Congressional hearings next week. The executive selected to be the “face” of the company has none of the operational responsibilities required to speak to these issues.

So what do we have here? Slow response, when immediacy is a fundamental in crisis communications. Lack of clarity and transparency, when being above board with customers is the only way to save your skin, if you can save it at all. Lack of accountability, when accountability means the CEO is front and center.

All the fundamentals of crisis communications are being violated, not unlike the missteps of Enron, Worldcom, Arthur Andersen and even Tiger Woods. As the great American philosopher, George Santayana, has said, “Those who cannot remember the past are condemned to repeat it.” Is Toyota suffering from a case of “historical amnesia” so profound that the company’s communications efforts have collapsed in exhaustion?

Technorati Tags: Prius, Toyota,
safety issues, breaking problems,Hiroko Tabuchi, James Kanter, Micheline Maynard

INDIA REVEALED: 10 SURPRISING FACTS

2010-02-04T17:15:00.010-05:00

On Monday, just back from India, I posted my impressions of Mumbai (formerly Bombay) in my blog . I tried to
capture the kaleidoscopic quality of a city that combines the old and the new, extreme poverty and astonishing economic growth. Despite the city’s (and indeed India’s) pressing problems, India is definitely beginning to take its rightful place on the world stage.

Today, I’d like to drill down a little deeper and share with you 10 interesting facts about the country that Goldman Sachs has predicted “could be 40 times bigger by 2050.”

1. At 1.27 million square miles, India about a third of the size of the US.

2. India is the #2 most populous country in the world (with nearly 1.16 billion people), just behind China. In fact, India has almost four times the population of the United States.

3. Like the US, India is a federal republic: power rests with the voters who chose their governmental representatives. Everyone age 18 and older has the right to vote.

4. The two most prominent religions in India are Hinduism (80.5%) and Islam (13.4%), according to the 2001 census. However, Jainism and Buddhism have been practiced in India for nearly 2,500 years. What’s more, Jews and Christians have lived continuously in India since 200 BC and 52 AD, respectively.

5. There are 15 official languages in India. Hindi is most widely spoken language and the primary tongue of 41% of the population, but English is the most important language for national, political and commercial communication.

6. Slightly more than half of India’s work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with less than one-third of its labor force.

7. India’s top industries are: textiles, chemicals, food processing, steel, transportation equipment, cement, mining, petroleum, machinery, software and pharmaceuticals.

8. With more than 427 million mobile telephones in use, India currently outranks the U.S. in terms of cell phone subscribers. (China is #1.)

9. There are 81 million internet users in India … more than in Canada and the U.K. combined.

10. At $3.55 trillion in 2009, India’s GDP (purchasing power parity) is ranked #5, after the EU, US, China and Japan.

SOURCES: CIA - The World Factbook and the National Portal of India’s Interesting Facts about India.

Technorati Tags: india, Goldman Sachs,
Mumbai, communications, public relations, Makovsky

It's Happening in Mumbai

2010-02-01T14:59:00.025-05:00

I have just returned from a week of business meetings in Mumbai (formerly Bombay), India, with a range of leading companies in multiple industries. Taking all the meetings as a whole, I saw a dynamic business community rearing its head, both nationally and internationally. There were those companies that saw enormous expansion within the Mumbai area only and, with a population nearing 20 million there, that opportunity is apparent. But there were also several $500,000+ firms that see market opportunities in the U.S. and Europe. Our schedule was set up by our IPREX partner firm in Mumbai: Concept, a leading public relations and investor relations firm and 2007 “Agency of the Year” in India, which has offices in key cities.

Mumbai is clearly a communications-conscious business community. Firms we spoke with saw the importance of communications in terms of building company value and launching new products. They were as concerned about the implications of social media and how best to channel its uses as we are. They realize that proper use of communications can enhance their growth, and they see enormous merit in moving in the right direction.

Physically, these corporations were generally set back behind gates in courtyard settings, as opposed to street-front structures. This certainly speaks to security concerns. Understandably, security was strong at both our hotel and other public buildings. At many, security personnel checked cars before entering by lifting the hoods and searching the trunks. Next, individuals walked through a security gate and then were scanned with an electronic wand.

Mumbai is still a contrast in styles. There were quite a few more skyscrapers since we were there in 2005, but by and large it remains a developing city. You still see an occasional cow walking in the street, and there are still 8-9 million people living in slums.

Nevertheless, there is a momentum in Mumbai that is reminiscent of New York. You can feel the electricity the minute you enter the city. The traffic is among the most crowded in the world because there is no underground or aboveground transportation system (although one is now under construction). The city has some stunning architecture, much of it built during its British colonial days. Dotted with more modern structures, the elimination of its slums, and hopefully cleaner buildings from yesteryear, Mumbai has the potential to be a masterpiece, contrasting the old and the new.

Technorati Tags: IPREX, Mumbai, slums, India, Concept Communication

CUSTOMER VS. EMPLOYEE: Challenging Conventional Wisdom

2010-01-27T15:52:00.007-05:00

The customer is number one. This is a fundamental tenet of business…and, might I say, business folklore. Some years ago, business executive Hal Rosenbluth wrote a book called The Customer Comes Second . If Rosenbluth is right, who is first? He says the employee.

Now there is a study — cited in The New York Times — that suggests Rosenbluth may be right. The employee may indeed be more important than the customer. The study found that strong sales growth was correlated with an organizational culture in which employees thought more highly of the company than did society at large.

In fact, there was 7.46% rise in sales for the companies whose employees like the company much more than consumers did; and there was 9.02% drop in sales for companies at which employee opinion was far below customer opinion.

This proves that employee impressions of a company are critical to its success...and critical to attracting business. Employees are the face of the company. They are the ambassadors who make a difference.

In fact, if employee attitudes are much better than expected, customer approval of the company actually increases exponentially — sometimes even surpassing employees’ approval — and sales go through the roof.

This study leaves no doubt whatsoever about the importance of employee relations programs and what it takes to win over customers … whether you see them as #1 or #2.

Technorati Tags: Hal Rosenbluth, New York Times,
customer, employee,communications, public relations, Makovsky

Is Domino’s Dissing Its Customers?

2010-01-25T09:34:00.012-05:00

Domino’s Pizza, the nation’s second largest pizza chain, recently launched its new formulation in a flurry of media, both traditional and online. What I found extraordinary about the whole marketing campaign was its focus on how awful Domino’s old recipe was, describing the “classic” Domino’s pie as “mass produced, boring, bland,” with a taste like “cardboard” … worse even than microwave pizza.

Some people love the ads; others, not so much. In that last group are the perplexed Domino’s customers who actually liked the old pie. “… They are basically saying, ‘We've been shoveling you crap for years and now we want you to trust us,’” said Kelly O’Keefe , managing director of the Brand Center at Virginia Commonwealth University in a recent AP interview.

I totally agree. Suggesting that you’ve been cheating your most loyal customers for the past 50 years by selling them a second-rate product is just not the strongest platform for future growth.

On the other hand, the company’s new CEO, J. Patrick Doyle, has said, “The old days of trying to spin things simply doesn't work anymore. Great brands going forward are going to have a level of honesty and transparency that hasn't been seen before”

How can you argue with that?

Generally considered a leader in delivery and value, Domino's has indeed taken some hits when it comes to taste. The ads are definitely eye-catching. And so far, the publicity pay-off has been impressive, including endorsements of the taste of the new pie by, among others, all five hosts of CBS’s Early Show and Stephen Colbert , who said that the new Domino’s pizza tastes “like an angel giving birth in your mouth.”

It’s a risky approach — and not one I’d recommend to a client — but it just might work. We’ll have to wait and see.

Technorati Tags: Domino's pizza, pizza,
J Patrick Doyle, Stephen Colbert,communications, public relations, Makovsky

The "Blurry" President

2010-01-21T13:57:00.008-05:00

The senatorial victory of Scott Brown , a Republican in the largely Democratic Massachusetts, should not have been a big surprise to the Democratic Party.

They had to know that they have been doing a sloppy job of packaging their candidates and their health reform bill…and yet have continued nonchalantly on their way. Has the Party so quickly forgotten how effectively Obama was packaged: the engaging smile, the audience outreach, the simple to remember “yes, we can” slogan. Americans like slogans and memorable phrases with a message. They take to candidates who engage them.

Scott Brown had those qualities. Martha Coakley was snippy. Why run a chancy, audience-insensitive candidate in an election where your life depends on it? And you need to build upon the legacy of the man who “founded,” “pioneered” and fought hard to get health care reform before he died.

Where is Obama’s leadership? Who can really define the health reform bill in a few sentences, if not a few words? No one. The Republicans used one word that everyone can remember: “expensive.” What happened to the so-called best communicator among Presidents since Ronald Reagan? As Frank Rich of The New York Times said in a telephone interview with Don Imus on FOX Business Network the other day, he’s gone “blurry.”

Technorati Tags: Scott Brown,
Martha Coakley,Frank Rich, Obama,
communications, public relations, Makovsky

Surprising Stats: An Average Day on the Internet

2010-01-14T10:46:00.014-05:00

Just how big is the internet? Mind-bogglingly big.

Online Education (via The Presurfer ) has produced a fascinating graphic about an average day on the internet. Among the stunning statistics:

• Over 210 billon emails are sent out every day — the equivalent of more than a whole year’s worth of regular mail in the U.S.

• Bloggers post 900,000 new articles every day — enough to fill The New York Times for 19 years.

• 700,000 new members are added to Facebook every day — approximately equivalent to the population of Guyana.

• Three million images are uploaded to Flickr everyday — enough images to fill a 375,000-page photo album.

Who would have imagined this just a few years ago?

Technorati Tags: internet,
flickr,online education, facebook,
communications, public relations, Makovsky

Tinkering with Conan’s Image

2010-01-11T15:34:00.008-05:00

Has Conan O’Brien failed as the new host of NBC’s “Tonight Show”? I’d say the answer is yes. Reason? Diluted image.

The only question in my mind is why NBC is coming to such a rapid conclusion and not giving O’Brien the time he needs to build his audience. That is unfortunate. When he started the show last June and Jay Leno , the previous host, was moved to 10 PM, Jeff Zucker, CEO of NBC Universal, said, “We’re going to judge this on 52 weeks,” according to The New York Times . But after only 17 weeks, NBC has telegraphed its intention to return Leno to the 11:35 PM spot followed by O’Brien at 12:05. It’s a real slap in the face to Conan.

During his initial six months, Conan O’Brien averaged 2.8 million viewers, whereas Jay Leno, during the six-month period prior to Conan’s starting, averaged 5 million viewers. Leno’s failure at 10 PM affects the money local 11 PM news in various spots around the U.S. can make, and it affects Conan, as well.

All of this hullabaloo puts the spotlight on Conan. As a long-time Conan fan from his “Late Show” days, I have been mighty disappointed in his “Tonight Show” brand. And I assume others have been equally disappointed. Conan is a product of New York — he looks it and acts it. His long legs, shock of red hair, sardonic smile and offbeat humor fit the culture here. He’s a little different. New Yorkers like somebody a little different, as probably do many viewers throughout the country who watch after 12:30 AM. On the “Late Show” he would come out, do a few twirls, shake his hips in hula-like fashion, stick his thumbs in the air to the right and left as if he were hitching a ride — and then get started. So everyone was laughing before he said word one.

So what does NBC do? Move Conan O’Brien to California. Remove the physical antics which were his trademark. Soften his sardonic wit. Keep his subtleties. And what do you have? A diluted Conan. A Conan who is no longer Conan. He is someone I do not know. Middle America will buy New York (e.g., Joan Rivers and Jerry Seinfeld), but they won’t buy someone who is not real.

Leno is an easy sell in middle America. Not too good looking. Regular guy. Humor is sharp, funny and easy to understand. Exceptional track record at a time when there is an advertiser recession and local affiliates are losing money. No brainer.

You can take the boy out of New York but you can’t take New York out of the boy. NBC: are you listening?

Technorati Tags: NBC, Conan O'Brien, Tonight Show, Jay Leno,
communications, communications, public relations, Makovsky

IS NOTHING AS IT SEEMS?

2010-01-07T15:42:00.003-05:00

May I have the privilege of one more postscript on the ongoing Tiger Woods scandal? I know we’ve all heard enough, but I have one additional point to get off my chest.

I was with my brother the other day when he raised some interesting questions. How did Tiger Woods maintain his squeaky-clean image for such a long time? How did he get away with multiple infidelities during the many, many years that he was held up as Accenture’s — and other leading advertisers’— role model? Is nothing as it seems anymore? Is no image real…or above reproach?

Finally, is the Tiger Woods story shocking because it underscores the fact that little today is what it appears to be … or that most is not what it appears to be?

Even with modern day internet transparency, certain information is likely to elude us. That may be because the press or others become so enamored of certain celebrities that factoids which could be explosive refuse to gain traction. Or the information is simply overlooked…at least until the crisis breaks. So, while it remains possible for one whistleblower to bring down an institution (and we advise clients to be prepared for that possibility), the revelation doesn’t always happen — or it may not happen for years, as was the case with the exposure of Woods’ many affairs.

There are and always will be celebrities and high-profile corporate leaders with good characters and high moral fiber. And they will exist among those whose reputations are built with the support of public relations. As public relations professionals, we do our best to ensure — via research, client probing and, ultimately, agreements with our clients — that they are providing thorough information that enables us to tell the truth. Full and fair disclosure from our clients is essential for us to do our best for them. Not to do so is to be like the patient who doesn’t tell the whole story to his psychiatrist. Once the due diligence is done and the agreements are signed, we cannot know what lurks behind corners.

Technorati Tags: Tiger Woods, Accenture, transparency,
communications, communications, public relations, Makovsky

Gandhi's Seven Blunders to Avoid: in 2010

2010-01-04T16:07:00.004-05:00

As the decade of the “noughties” winds to a close, it’s time to think positive! It is 2010! Let us not forget the mistakes we made in 2009 (and before), but let’s also not wallow in regret! Let’s focus instead on consciously avoiding the blunders that created the crises of the past ten years.

Shortly before he was assassinated, the great spiritual and political leader, Mahatma Gandhi, compiled a list of the “Seven Blunders of the World” which are particularly relevant as we enter a new decade. If we avoid these blunders, we will enjoy a better result, Gandhi advocated. Each of the Seven gives us food for thought:

1. Wealth without work
2. Pleasure without conscience
3. Knowledge without character
4. Commerce without morality
5. Science without humanity
6. Worship without sacrifice
7. Politics without principle

As a communicator (and a human being), I care about all seven blunders. It strikes me that a corporation, for example, would do well to examine its corporate values with special reference to items #1, 3, 4, 5 and 7.

Fortunately, in our great country, we have a choice of how we approach our relationships in business and personally. The standards Gandhi has set provide an excellent foundation for the beginning of any new year!

Technorati Tags:Mahatma Gandhi, Seven Blunders of the World,
communications, public relations, Makovsky

GIFTS DELIVER MESSAGES

2009-12-28T09:43:00.003-05:00

Great public relations requires empathy — the ability to put yourself in the shoes of your audience — so that you can deliver messages in the self-interest of that audience. This is true whether you’re engaged in a major corporate campaign or merely a relationship with another individual.

The most obvious example of the latter is during the holiday season, when you receive someone’s name in a “Secret Santa” gift exchange at the office or when you’re looking for the perfect presents for family members or friends. What do I buy for them? What do they need? What are their interests? For example, if I buy a book, would they prefer history, romance or a cookbook? What choice do I make to underscore my understanding of and respect for the recipient?

Clearly, gifts deliver a message. The more individualized the message — the more it demonstrates your affinity for and emotional connection with the recipient — the more likely it is that your gift will evolve over the years from just another present to a keepsake with real sentimental value. Objects like an autographed book with a personal message or a one-of-a-kind antique can really touch a chord.

Well, my then-5-year-old son, Matt, did that for me about 20 years ago. This was the first of many times, but this holiday gift stands out in my memory. Why? Because he made it himself. It is a small, round, blue clay paperweight with a doughnut hole, covered with silver-colored nuts and bolts. It is about three inches in diameter. And it is something that catches your attention. It reflects his sense of design and color. Perhaps, even his ability to manage a project to completion. Today — and for many years now — it sits as a memento on my desk at the firm. It reminds me of Matt’s childhood and his strength as an adult.

This gift has a “sticky” message that touched my heart — which is the underpinning of every relationship, whether between an organization and its constituents or just two individuals.

Technorati Tags:communications, public relations, Makovsky

A HOLIDAY GIFT FROM PR TO THE I.R.S.

2009-12-21T15:54:00.004-05:00

Billions of dollars will be flowing into the U.S. Treasury shortly, because of an incentive program that rested on a carefully crafted international publicity strategy. Without the latter, this “windfall” could never have occurred.

What was it and how did it happen? For years the Internal Revenue Service, the U.S. tax collector, had been after Americans who had set up bank accounts in Switzerland to avoid paying taxes. At the center of this violation was the Swiss banking giant, UBS, which had admitted selling off-shore financial services that enabled tax evasion and agreed to a $780 million fine. UBS also agreed to turn over the names of about 4,450 American clients suspected of tax evasion. But this was just the tip of the iceberg.

According to an article last month in The New York Times, 14,700 Americans living and working in over 70 countries — with secret foreign bank accounts — took advantage of an aggressively publicized amnesty program for those who came forth by the mid-October deadline. They “were lured” to the program to avoid the risk of potentially ruinous fines, back taxes and possible jail time.

Some clients are challenged to measure the value of publicity. With the right public relations program – in this case, an amnesty opportunity – the value was not only in recovering tax revenues, but also in putting a halt to an illegal cross-border business practice that will most likely not happen again.

According to Lynnly Browning, the author of the Times story, the U.S. plans to expand its program to more countries and also take a closer look at the web of financial advisors, lawyers, accountants and others who help banks sell these illegal services. The attention-getting fear factor is once again at work.

Technorati Tags: Internal Revenue Service, Switzerland,
UBS,
The New York Times,
Lynnly Browning, tax evasionpublic relations, business, Makovsky,

FORECASTING THE GLOBAL ECONOMY

2009-12-17T14:28:00.003-05:00

I had the good fortune of gaining some important insights from Michael Corbat, CEO of Citi Holdings and head of the brokerage and asset management unit of Citigroup, who spoke on the global economic outlook at a recent luncheon sponsored by the New York Chapter of the Swedish-American Chamber of Commerce.

Here are some highlights of his talk, which made a real impact on my thinking:

• The U.S. economy is recovering but will lag behind many other parts of the world. The overall recovery will need to be driven outside the U.S.: primarily in India, China and Brazil.

• European recovery will be fragmented. Spain has a terrible unemployment market. Germany is much stronger. Things are not great in Italy.

• We have moved from spending to saving. This will not be a short-term trend but a long-term one. People used to pay their mortgages first; but because home values are slipping, they are now paying their credit cards first and their auto loans second. Credit card delinquencies appear to have peaked.

• The debt to GDP ratio is 40% and will move to 70%. It will take two decades to return to 40%.

• Credit markets are still dependent on what is being put in by governments – consumer confidence is low and is largely centered on peoples’ estimation of the stability of their jobs and the value of their homes. Both are under considerable stress.

• At Citi, we’ve helped keep 700,000 people in their homes. Nevertheless, we’re involved in a large-scale cleanup. With a presence in 100 countries worldwide, we are reorganizing our business globally to focus on our strengths. We will be more like we were 20 years ago.

• Citi is tying itself to global customers to move their businesses forward. Many companies have become extremely defensive and need to build and invest in technology. We will co-partner with them to help them grow.

• The U.S. has a lot of rebuilding to do. We have undermined our credibility. The general expectation is that the U.S. will continue to be a power, but not as strong as it once was.

Technorati Tags: financial crisis, credit rating,
Michael Corbat,
Citi Holdings,
Citigroup, Swedish-American Chamber of Commerce,public relations, business, Makovsky,

The Reason Accenture Left Tiger

2009-12-14T16:46:00.005-05:00

It is no surprise that Accenture, among his many sponsors, has decided to part ways with Tiger Woods—unlike AT&T, PepsiCo and Nike, which are still hanging on.

In my blog dated December 3, 2009, “Tiger’s Transgressions: Are They Really a ’Private Matter’?”, I noted that Tiger’s “reputation and advertising revenues, by and large, should remain intact.” However, that blog was written before the revelation regarding multiple affairs (plus serious issues surrounding his home life) came out. Possibly, other sponsor relationships will unravel if the flow of seamy details continues.

Accenture is the first major one to go (minus Gillette, which put the relationship on hold), largely because the global consulting firm’s ad campaign was centered on its research, analytics, strategy and precision. Accenture advertising says, “It’s what we call performance anatomy, and it’s one key finding from our groundbreaking research into the world’s most successful companies.” The image includes a graph line which denotes attitude as 50% and aptitude as 50%. Tiger’s strategic skills — indeed, his entire persona — have been indicted by his actions. Thus, the ad theme, “Go on. Be a Tiger.” is no longer valid. If you take the total picture into account, he no longer represents even Accenture’s tagline, “High performance. Delivered.”

As The New York Times notes in its article on Monday, December 14th in the Business Day section, “Big Risk in a One-Man Brand Like Tiger Woods,” that is indeed true. Nevertheless, Accenture has gotten great mileage out of its Tiger Woods campaign, which has gone on for years. Despite the risk, one-man or one-woman brands will continue to be a strategy that will be applied by companies in the future. Nevertheless, there will likely be a momentary pause.

Technorati Tags: Tiger Woods, crisis, communications,Accenture, The New York Times , communications, public relations, Makovsky

Bill Gates and Warren Buffett Speak Out

2009-12-11T09:39:00.003-05:00

Recently, Columbia Business School hosted an evening with Bill Gates, former chairman of Microsoft and current chairman of the Bill & Melinda Gates Foundation, and Warren Buffett, chairman of Berkshire Hathaway. The event was televised on CNBC on November 12, 2009.

Some of their observations regarding character, philosophy, principles and the future (which I have paraphrased) are worth thinking about. They influenced my thinking and might influence yours, as well.

Question: Will greed ever go away?
Buffett: Greed will always be here.

Question: What is the most important thing you do every day?
Gates: Learning. Reading a lot and arming myself with information.

Question: What industry is going to produce the next Bill Gates?
Gates: Perhaps the energy business or healthcare. We haven’t solved a lot of medical problems and more will be solved. Both sectors have a chance to produce some significant leadership.

Question: What are your feelings about the future of the U.S.?
Buffett: I am enthusiastically optimistic about America.

Question: What keeps you up at night?
Gates: Little keeps me up at night. Well, long-term, I am concerned that our educational system is not improving as much as it should.

Question: What’s the one thing your MBA at Columbia prepared you for?
Buffett: I discovered my interest in investments.

Question: What makes you stand out from the crowd?
Buffett: If you can say, “We did what we did because we have a passion for it” -- that makes you stand out from the crowd.

Question: As you progress in your business career, what are the key things to remember?
Buffett: Consistency, focus and staying positive.

Technorati Tags: Bill Gates, Columbia Business School, Microsoft, Bill & Melinda Gates Foundation, Warren Buffett, Berkshire Hathaway, communications, public relations, Makovsky,

The Foreign Government Investor in the U.S.:

2009-12-07T16:44:00.004-05:00

Big overseas government investment funds from Kuwait, Singapore, Qatar and Abu Dhabi “that came to the rescue of (our) banks during the financial crisis are going home with their pockets full of bounty,” according to The New York Times Business section, December 7, 2009.

These foreign government funds, known as sovereign wealth funds, were the subject of a recent talk at Makovsky by Dr. Efraim Chalamish, an international investment law scholar and Global Fellow at New York University who spoke to our staff on perception and communications issues surrounding sovereign wealth funds investing in the U.S. Since many do not know a great deal about these funds, I did a quick interview with Dr. Chalamish following the talk. Here are some of the highlights of our conversation.

Define sovereign funds.

The terminology around sovereign funds is still a work in progress. The definition recently adopted by the International Monetary Fund and the sovereign wealth funds community includes three fundamental elements: ownership of the fund by the foreign government, an investment strategy that includes foreign financial assets and investing the funds to achieve key financial goals in the mid-to-long term.

How would you describe the perception barrier to foreign investment in the United States?

In general, the U.S. offers its foreign investors a relatively open regime for foreign investment, and therefore the U.S. receives a steady stream and a high level of foreign investment. However, various regulatory aspects of investment law are frequently used by U.S. politicians to promote political goals and serve as drivers for legislative changes. Since clarity and consistency are very important factors for foreign investors, the U.S. has to make sure that it communicates rapidly any such changes in investment law.

What are the top three things that sovereign wealth funds should consider when contemplating a business investment today in the U.S. and how should they approach the communications challenges here and in their own countries?

Overall, communications via the media can play an important role in the investment process by positioning the deal in the U.S. as furthering the strategic interests of both sides, improving cross border economic activity and creating jobs. Moreover, common economic interests can make allies out of enemies.

Beyond communications, here are three important points to consider:

First, the funds need to contemplate potential regulatory challenges to the investment. A significant investment in a strategic industry will lead to a governmental review that may delay the process. For example, the review may include measures such as limitations on the nationality of board members or a requirement to spin off certain company divisions -- all related to the level of control of the acquired company.

Second, since many of these funds will want to continue to invest in the U.S. in the future, the process must be a positive experience. This underscores the need to work closely with the U.S. government, building mutual trust and emphasizing the benefits to all parties.

Third, foreign governments need to communicate to their nationals the importance of long-term financial planning in order to achieve higher returns. This is especially important in countries that have traditionally invested their currency reserves in local assets and now might view jurisdictions, such as the U.S., as risky, particularly due to the recent financial crisis.

As a foreign investor, is it more important to manage perceptions in the government community or with the general public? Why?

In the case of foreign investment, it is important to manage perceptions in both communities. The Committee on Foreign Investment in the United States, a government body, can approve an investment or impose certain limitations on it. At the same time, it is also important for the general public to have a positive perception. As we learned from the Dubai Ports World story, negative emotions among the general public, driven by protectionist sentiments and local nationalist voices, can induce politicians to reject an investment which would otherwise have been approved.

Technorati Tags: investment funds, financial crisis , The New York Times, Dr. Efraim Chalamish, New York University, sovereign funds, International Monetary Fund ,foreign investment,
Dubai Ports World controversy, communications, public relations, Makovsky,

Tiger’s Transgressions: Are They Really a “Private Matter”?

2009-12-03T15:49:00.002-05:00

A minor traffic accident for one of the great superstars of sports has escalated into a full-blown public relations crisis. Yesterday, Tiger Woods released his latest statement on the matter, saying, “I have let my family down and I regret those transgressions with all of my heart” and asking that reporters and his fans respect his respect his privacy.

“Personal sins should not require press releases,” he wrote, “and problems within a family shouldn't have to mean public confessions.”

It’s a beautifully crafted and moving plea, but also a little disingenuous. Unfortunately, as a result of his empyrean celebrity, Woods doesn’t really have a private life.
Avoidance of the press early on didn’t help Woods' case. He was wrong to reject questioning by police three times after making an appointment to speak with them and his subsequent failure to put all his cards on the table only increased the public's curiosity, while compromising his relationship with corporate sponsors.
Fortunately, Woods has spent so much time at the empyrean heights and amassed such a huge reserve of goodwill that I believe his reputation and advertising revenues will, by and large, remain intact. But he should now be aware that he is not invulnerable, and future buyers may be more hesitant. Because of his fame, he cannot expect the same “simple, human measure of privacy” of an ordinary citizen … particularly not today, when social media make everyone with a cell phone or a digital camera a potential gossip columnist.

Technorati Tags: Tiger Woods, crisis, communications, public relations, Makovsky

Motivating Support

2009-11-25T09:31:00.005-05:00

For many years, my wife and I have helped support various children in developing countries through the Christian Children’s Fund, which recently changed its name to ChildFund International.

It is rather obvious that we, like many others, are motivated to provide help where it is needed, particularly supporting impoverished children — so that they can grow up with their fundamental material needs met.

Periodically, the Fund encourages the relatives of the children to send letters to the donors, telling what is done with the money sent. When you read these words, typically you live the experience. Your heart breaks and you want to help more. This is transparency at its most basic level. It is the one-on-one success story that has motivated action for years.

Recently we sent young Miriam Magwigwi a $25.00 birthday gift over and above our regular support. Her father wrote the following letter:

Dear Mr. and Mrs. Ken Makovsky,

How are you there with your family? It is the family’s hope that this letter will find you happy and healthy. Here Miriam and family are all fine. I am the father writing on behalf of your friend.

Miriam was the happiest to receive the birthday gift you sent to her. The money received in dollars it was $25.00 and when changed into one local currency it came to k121,375. Out of this money, we bought your friend clothes and food. We really appreciate your love and mercy.

We are now through with coldness and we are in hot season. You are so special to us. May the good Lord God bless your daily plans and activities.

Yours Faithfully

Eliph the Father

Writing on behalf of Miriam

At this Thanksgiving season, we are thankful that Miriam’s family appreciated our small gift, we’re glad we can help and, of course, we’re highly motivated to continue our support. Once again, candor and customer appreciation are at the foundation of success.

Technorati Tags: Thanksgiving, ChildFund International, communications, public relations, Makovsky

Maximizing Creativity

2009-11-23T08:26:00.006-05:00

To be successful creative people need to have some latitude in structuring their own working environments — though there does have to be some order too, if businesses are to succeed. The most important rule of thumb for being a successful writer (or any creative person, for that matter) is to make a habit of your craft.

“No professional writer can afford only to write when he feels like it,” said author and playwright Somerset Maugham. “If he waits till he is in the mood, till he has the inspiration, he waits indefinitely and ends by producing little or nothing.”

Nevertheless, a friend recently sent me some very interesting examples (via Neatorama) of the daily routines of a number of celebrated figures, including the following world-renowned writers:

• Winston Churchill dictated from his bed in the morning and always took a nap at 5:00 pm.

• Charles Darwin smoked a cigarette every day at 3:00 pm. He found conversation exhausting and spent no more than 30 minutes on a single conversation.

• Ernest Hemingway wrote until he “knew what was going to happen next” — then he stopped.

• Best-selling author Roald Dahl wrote from 10:00 am to noon — then he tended to his farm.

• Stephen King starts his day with a glass of water or a cup of tea. Then — sometime between 8:00 am and 8:30 am — he takes his vitamins and sits in his usual chair, with all his papers arranged in their customary places. He says that “the cumulative purpose of doing these things the same way every day seems to be a way of saying to the mind, ‘You’re going to be dreaming soon.’”

Therefore, the creative road to success is not always the obvious road.

Technorati Tags: creativity, Somerset Maugham, Neatorama,Winston Churchill, Charles Darwin, Ernest Hemingway, Roald Dahl, Stephen King, communications, public relations, Makovsky

Transparency and the Power of Free Speech

2009-11-19T15:27:00.005-05:00

My guest blogger today is Travis Ferber, a senior account executive at Makovsky + Company, who addresses the PR issues raised by the recent talk by Justice Anthony Kennedy at the Dalton School in New York.

Last week there was a small article on the front page of The New York Times — just below the fold. It covered an evergreen news topic: hypocrisy. Not just simple hypocrisy. No. This was a case of high-powered hypocrisy involving the sacred ideals of journalistic integrity, allegedly violated by a stalwart proponent of free speech: Supreme Court Justice Anthony M. Kennedy.

According to the article, a new employee of Kennedy’s office gave notice that coverage of Kennedy’s recent speech at a Manhattan high school could not appear in the high school newspaper until it had been reviewed for “accuracy.”

In response to the online uproar that ensued, Kennedy was interviewed by The Wall Street Journal. Kennedy’s response — “as ‘the captain of the ship,’ he said, he accepted responsibility for requests made in his name” — is a perfect example of how to communicate in a crisis: Address the situation, take responsibility, clarify your position and the facts surrounding the incident, and get a well-respected publication to publish your response.

It is not unusual for requests for accuracy reviews, nor for journalists to grant them. In an era where under-staffed and time-constrained journalism is the norm, the need for fact-checking is greater than ever. Nonetheless, the Kennedy case teaches us all a few lessons.

First, the simple fact of the matter is that if you are famous, if you have power, if you are ”newsworthy,” you can get away with a lot more. The decision to grant review of a story is driven by the power of the person being interviewed. While this is common knowledge among media vets, it is quite an eye-opening experience for those outside or new to the profession (in this case, the high school newspaper editors).

The Fourth Estate is not as free as some would think.

There is also a lesson here for PR professionals. Kennedy’s response was perfect, but the fact that he had to respond shows how quickly small mistakes can turn into big problems. A few years ago it would have been inconceivable to see a high school newspaper trigger a national communication crisis.

So in today’s transparent world, perhaps the best advice we can give echoes Polonius’s command: “This above all else, to thy own self be true.”

True to thy own self and, I would add, everyone else, too.

Technorati Tags: freedom of speech, Supreme Court Justice Anthony M. Kennedy, Dalton School in New York, The Fourth Estate

Close Journalism Schools?

2009-11-16T10:23:00.003-05:00

An article in Huffington Post by Richard Sine, a freelance journalist, argues that journalism schools should be closed. Why? Because the current closing of many newspapers and magazines and downsizing of staff eliminate the job opportunities that heretofore were available. So why pay $70,000 (at Columbia) a year to learn a dinosaur profession that takes you nowhere, he asks.

Short-term thinking if I’ve ever heard it. While it may be appropriate to examine and update the curriculum of the nation’s journalism schools and review the value/tuition equation, journalism training is not restricted to hard-copy media. I’m firmly convinced that the growth in online paid subscriptions will increase. Media mogul Rupert Murdoch has already announced that he will be charging for online content and Hearst, The New York Times and TIME are considering plans for possible Internet fees. Moreover, as the social media continue to explode, new models are emerging to underwrite the costs of online journalism, including subscriptions for mobile content (for Apple and Kindle, for example). If this trend continues, economic opportunities for reporters and editors should once again pick up.

Further, will our government really permit the demise of the Fourth Estate – which, acting in the public interest, has uncovered serious ethics or other infractions in virtually every institution, from the U.S. presidency to major business and non-profit institutions? The Fourth Estate is a key watchdog in protecting the body politic. If we do not train professional journalists and pay them a living wage, we will diminish democracy’s standing in the world. The Fourth Estate has enabled us to be a role-model where other countries have fallen short.

The lily-livered statement of the Dean of the Journalism School at Columbia is appalling: “I’ve never met a single person in 35 years who went into journalism school out of pure economic reasons.” Rather than championing the importance of journalism as a noble profession that deserves superior economic reward, he implies that its social mission reigns supreme, ignoring the importance of the economic mission.

With champions like Dean Nicholas Lemann at what is acknowledged to be the nation’s leading “J” school, journalism training will indeed die along with the Fourth Estate. Not only must the journalism leadership at universities speak out, but the leadership of our nation must address the problem, too.

If journalism does move wholly online, which is doubtful (as no medium—print, radio, TV – has ever totally disappeared), there is a woeful need for training. Online writing calls for training in a range of techniques that make it more readable and consumable. There is an art to writing effective blogs, news articles, emails, features, Wikis, etc. Investigative journalism, with the help of Google and other search engines, takes on new dimensions. Understanding the need and the potential contributions of sponsors, advertisers and public relations professionals can have a substantial impact on the way journalists operate. Further, new ethical and transparency concerns have already arisen and must be addressed.

The Fourth Estate is indeed undergoing a change. I believe that this revolution will ultimately enable it to rise again, and pay for journalists will rise along with it, as the marketplace comes to realize that we once again must pay for -- and train for -- that which is worth having.

Technorati Tags: journalism schools, Huffington Post, Richard Sine,Rupert Murdoch, Hearst, The New York Times, TIME, social media, Apple, Kindle, Dean Nicholas Lemann,The Fourth Estate,communications, internet, public relations, Makovsky

A Nation of Writers

2009-11-12T10:53:00.004-05:00

It is commonly accepted among public relations professionals that the internet is a once-in-a-lifetime gift to the profession. But generally we think of that gift as an amazing new communications channel that enables us to reach millions of consumers, a select number of micro-communities or focus in on genuine one-to-one marketing.

However, the internet also has been a rocket in another sense for the communications business: more people are writing than ever before – at least that is my perception, with 133 million blogs indexed by Technorati since 2002, as just one indicator.

In the world of communications, advanced writing skills are a fundamental requirement for effective advocacy. And the internet serves as both a training ground and a platform for advanced writing education. Whether blogging, tweeting, updating Wikis, texting, emailing, posting comments or whatever, the internet requires people to put words down, even if it is in online shorthand, to express themselves, and the numbers of people doing so is beyond anything ever anticipated.

We in business know how important it is to be articulate. As more and more young people grow up writing as naturally as they grow up talking, the pool of effective writers from which the public relations business has to choose will only grow. Professor Andrea Lunsford of Stanford University points out that of all the writing Stanford students did, 38% of it took place outside the classroom – “life writing,” as she calls it, according to a recent post by Clive Thompson on Wired.com (via Neatorama).

This is a paradigm shift unlike any others. Before the internet came along, most Americans never wrote anything that wasn’t a school assignment. Consequently, the pool of those who wish to write professionally should expand exponentially. This is not only a gift for our profession, but a gift to the world, as effective communications is at the heart of everything…from profitable business to world peace.

Technorati Tags: Professor Andrea Lunsford, Stanford University, Clive Thompson,emailing, texting, tweeting, Technorati, blogs, communications, internet, public relations, Makovsky

TEXTING THAT SAVES LIVES

2009-11-09T12:32:00.005-05:00

As texting during driving is getting a lot of well-deserved negative publicity, texting during health crises is also saving lives, but is hardly getting any attention at all.

We all recognize that text messaging as an increasingly important channel of communication, is on the rise, with growth that is expected to more than double by the end of next year. During just the second quarter of 2009, VeriSign Messaging and Mobile Media delivered a total of 94.8 billion text messages — an average of more than a billion messages a day.

The negative side: In an op-ed this month in U.S. News & World Report, NY State Representative Carolyn Maloney cited research showing that people who text while driving are 23 times more likely to have an accident. Another study, published by Car and Driver in June, concluded that texting while driving can be more dangerous than driving while drunk!

The positive side: texting is now poised to save lives.

In many parts of the world, people don’t have access to doctors or hospitals. Whatever rural health workers there may be, they don’t always have the training or technology to assist with major medical problems. A company called FrontlineSMS:Medic is enabling community healthcare workers to text messages to a hospital with their questions about health problems and get quick responses … without the hospital having to waste valuable time and resources sending doctors into the field when it’s not necessary.

Two weeks ago, FrontlineSMS:Medic won an award for the “best use of mobile technology for social good.” The award, given out by NetSquared, gives the project funding to continue to upgrade its software and expand the program. If you want to read more, check out the GOOD blog.

Technorati Tags: text messaging, U.S. News, World Report , VeriSign Messaging, Mobile Media, communication, Carolyn Maloney, public relations, business, Makovsky

COMMUNICATIONS PERSPECTIVES ON GM BY AN ON-THE-SCENE OBSERVER

2009-11-05T16:03:00.008-05:00

Steve Harris, former communications director of General Motors, was one of five featured panelists at the Council of PR Firms’ October 29 Critical Issues Forum program: “Aftershock: Rebuilding Trust and Confidence in 2010. “ Steve made some salient points about GM, both pre- and post-bankruptcy, which I’ve paraphrased below:

• The recent economic crisis was just the culmination of years and years of GM’s audiences’ diminished trust in the company, largely related to product quality issues. But other auto companies here were equally as guilty. The lack of company concern was obvious. So it will take time to regain that trust — perhaps years and years.

• Yet GM doesn’t have a lot of time to change attitudes, perhaps no more than a couple of years. The most effective way to change perceptions would be by building more compelling products. The CEO of GM also needs to embrace the social media, and that will help reach people more consistently and rapidly.

• GM must also play a bigger role in personal outreach to further build trust. The company needs live encounters, and they actually have begun to have some meetings with some of their adversaries — approximately 100 so far. You cannot rely on technology alone, as effective as it is. In fact, it is as labor intensive to use social media as it is to do personal outreach, particularly when it comes to prolonged conversation.

• GM has to find common ground between itself and its various constituencies. To do that the company is cultivating third parties to speak on its behalf and with various audiences. According to Harris, the company has already identified 15,000 people to do just that.

• The crisis has indeed raised PR’s influence in the company, but it has also raised the risk level; that is, the accountability of communications is now on a higher plain.

“Aftershock” moderator Len Schlesinger — President of Babson College, former COO of Limited Brands and a professor at Harvard Business School for 20 years — summed up the observations of the various panelists by describing the three levels of engagement their work encompassed: virtual (the internet), physical (in person) and mental (engagement with ideas).

It appears that GM is using all three and will continue to dialogue, listen and solicit feedback, thereby gradually resuming , we hope, its former esteemed position in the marketplace.

HOLD OFF THE PITCHFORKS

2009-11-02T11:27:00.007-05:00

“Business is on probation; it is not off the hook,” said David Gergen, noted political commentator and Harvard professor. “The American psyche is very bruised…and if business takes us down again, there are people in Washington now who will really stick it to business.”

Gergen was the keynote speaker at the Critical Issues Forum program, “Aftershock: Rebuilding Trust & Confidence in 2010,” sponsored by the Council of Public Relations Firms on October 29th at the Yale Club. I have always admired Gergen and whether I agree with him or not, I find he usually has valid points to make. He did not disappoint.

“The first thing to do, “Gergen continued, “is to hold off the pitchforks, and thus it will take time before you can rebuild trust.” Gergen noted that literally a week or so before Lehman Brothers and Bear Stearns collapsed, both issued statements saying, “We’re in great shape.” “We can’t have these kinds of untruths. We need transparency,” he insisted. He cited a leading public relations consultant who said that the problem was not bursting bubbles, but “sub-prime leadership.”

Recent business school graduates with whom Gergen has spoken feel that business needs to stand for more than making money for shareholders and that would require changing the culture. But leadership, he pointed out, is not a top-down activity, and cultures can be changed by managing up. Admittedly, people fall into their ways, and it can be challenging to get them to change. He cited both Ford and Nixon, both of whom he counseled, as examples of that.

Gergen professed concern with all the name calling and cynicism that pervades the social media and has now crept into the mainstream media. “This is degrading our political culture,” he said, “and I hope it changes. Things tend to move in cycles, but this trend makes it harder to have a conversation.“

(During an interview in September on “60 Minutes,” the President concurred with Gergen. When asked about the coarsening of public discourse, Obama said that one of the things he’s trying to figure out is “how can we make sure civility is interesting.”)

In the closing part of his address, Gergen stressed that quality leadership is the key to solving many problems for business and, indeed, for all organizations. “The first responsibility of a leader is to define reality,” he said, quoting Max DePree. “The last is to say thank you.”

Technorati Tags: David Gergen , Critical Issues Forum, Council of Public Relations Firms, Lehman Brothers, Bear Stearns, transparency, Max DePree, public relations, business, Makovsky