10 of the “21 Dumbest Moments in Business”

I don’t know anyone who wasn’t happy to see the back end of 2008. It was a tough, tough year. There was, however, at least one bright light in the dismal landscape: The “21 Dumbest Moments in Business – 2008”, Fortune magazine’s annual list of the year’s “most laughable corporate moves.” As Fortune reports, it “proves that, even in moments of crisis, stupidity lives on.”

What I found particularly interesting is the number of these crises and scandals that could have been averted if the parties involved had taken a moment to conference with their chief communications officer, public relations firm or PR consultant about what our CEO, Ken Makovsky, calls a “PR bailout.”

Here’s an abbreviated version of the top 10 business gaffes of 2008. Check out the complete list for a look at all 21 of last year’s monumentally dumb moments.

1) Detroit execs flying to D.C.
2) Detroit execs driving to D.C.
3) Henry Paulson's initial $700 bailout proposal:
4) The final bailout
5) The Mozilo e-mail
6) The iPhone 'I am rich' app
7) Paulson's 'bazooka'
8) Tough talk from Fannie Mae
9) Scandal at the Department of Interior
10) GM's Lutz on global warming

Is Nothing Private in Today’s High-Tech Environment? Apparently Not.

Crisis management, public relations, investor relations, financial communications and technology consultants, like those in our New York City PR firm, often talk about the ways in which the Internet has opened a window on private lives. There was a perfect example of this phenomenon this week on the Apple website, where Steve Jobs addressed a new flurry of rumors about his health.

In his open letter, Jobs wrote: “… my doctors think they have found the cause — a hormone imbalance that has been ‘robbing’ me of the proteins my body needs to be healthy. … The remedy for this nutritional problem is relatively simple and straightforward, and I’ve already begun treatment. … I will continue as Apple’s CEO during my recovery.”

In 2004, the media breathlessly followed Jobs’ successful battle against pancreatic cancer. In June 2008, his gaunt appearance gave rise to new speculation about his health. More questions were raised when Apple announced a few weeks ago that, for the first time ever, Jobs wasn’t planning to deliver the keynote address at Macworld.

While there are clear standards for disclosure of material financial information, disclosure concerning matters of health has typically been left to the discretion of the company’s board of directors. Not any more, apparently. According to Henry Blodget, co-founder, CEO and editor-in-chief of the Silicon Alley Insider, “Steve's health is NOT just a ‘private matter.’” He adds, “Steve Jobs is arguably Apple's single most valuable asset. If he's seriously ill, shareholders have every right to know this.”

Technorati Tags: makovsky, Crisis management, public relations, investor relations, technology, Internet, Steve Jobs, Apple, health focus, Silicon Alley Insider, financial communications, business, communications, public relations

Medicaid Insurance Crisis: Who’s in Charge of PR Here?

According to an article in the AARP Bulletin, a new rule designed to keep illegal immigrants off the Medicaid insurance rolls has had the net effect of denying healthcare coverage to tens of thousands of Native Americans … because they can’t prove that they’re U.S. citizens!

No one knows precisely how many have been affected, but in Oklahoma alone, more than 20,000 of its 700,000 Medicaid recipients — of whom almost 13% are Native Americans — have been dropped from the program, “not because they aren’t citizens, but because they’re having a tough time coming up with the right pieces of paper at the right time,” according to Mike Fogarty, CEO of the Oklahoma Health Care Authority.

Native Americans and other minorities, including African Americans and Latinos, experience higher rates of infant mortality, cardiovascular disease, diabetes, HIV/AIDS and cancer, according to the Office of Minority Health of the U.S. Department of Health & Human Services. The causes are complex, but two major factors are 1) inadequate access to care and
2) substandard quality of care.

In today’s troubled economy, the issue of healthcare insurance for all Americans has the potential to become a serious public relations crisis for the entire insurance industry.

The [Divorce] Court of Public Opinion

Tricia Walsh-Smith, an angry New Yorker engaged in a bitter divorce with her husband, a wealthy Broadway executive, is continuing to air her grievances on YouTube in the second of two videos about her impending divorce. The original video — which was downloaded more than 2.5 million times and was picked up by 383 mainstream media outlets in the first week — can be seen here.

Whether Walsh-Smith has helped or hurt her cause is immaterial … although I would imagine her shenanigans are unlikely to impress the judge who hears her divorce case. As MSNBC’s senior legal analyst Susan Filan said, “In the end, a divorce, as upsetting and emotional as it is, is just a financial transaction.”

As a PR practitioner in New York, who has worked for law firms and handled crisis management assignments, what concerns me is the increased potential for sudden, swift blogstorms — like this one — when parties to a lawsuit or crisis decide to take the communications into their own hands. My concern is intensified when the ultimate decision is the responsibility of lay people (members of a community or jury), who may be swayed by what they see and hear on the internet.

How Do You Count Your Cash?

Now, more than ever, we need to “think global and act local.” Despite the fact that the internet has made the world a smaller place, it hasn’t eradicated many of the more subtle cultural differences that separate us. For just one example, check out “How People Count Cash,” a nifty little video that shows how people all around the world have their own, unique ways of counting currency.

These subtle cultural differences can be critical if you’re doing business in an unfamiliar market. It’s one of the reasons why our firm has long cultivated a network of partner agencies, regionally, nationally and worldwide: IPREX , one of the world’s largest global public relations networks, and the Northeast Partnership, which consists of seven PR firms in New England (Connecticut, Massachusetts, Rhode Island, Vermont, Maine), New York and New Jersey.

It’s part of our commitment to “The Power of Specialized Thinking.” Not only have we organized our practice areas — health care + pharmaceutical, technology + business services, financial + professional services, investor relations, branding + visual communications and online fluency — to reflect our belief that depth of expertise always yields the best outcomes, but also because we’re convinced that geographic and cultural specialization are more productive and often more cost efficient for our clients.

The Court Rules in Favor of Wikileaks

Last week, Federal Judge Jeffrey S. White withdrew his earlier order disabling Wikileaks, a website that allows the anonymous posting of documents to discourage unethical behavior in governments and corporations. He’d originally shut down the site at the request of Bank Julius Baer & Company, a Swiss banking company that serves the ultra-rich. They charged that Wikileaks had posted confidential information about some of its customers.

Wikileaks is designed to enable whistleblowers to leak documents, without fear of censorship or the risk of the political repercussions. Its founders contend that Wikileaks will “civilize corporations by exposing uncivil plans and behavior. Just like a country, a corrupt or unethical corporation is a menace to all inside and outside it.”

It’s still in its infancy, but Wikileaks is worth a careful look if you’re at all concerned with the possibility of adverse publicity or if you are involved in issues or crisis management.

Only 6% of corporate frauds are revealed by the SEC and 14% by the auditors, according to the Center for Economic Policy Research. More important monitors are media (14%), industry regulators (16%), and employees (19%).

As it develops, it’s likely that Wikileaks will become a useful source for the mainstream media … so it’s worth keeping it on your radar.