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

Does the USA Need a Branding Firm?

The issue of America’s image abroad was a campaign platform for Barack Obama, who said in a foreign policy speech in April, “We all know that these are not the best of times for America’s reputation in the world.”

That’s not to say that the last administration was unaware of the nation’s image problems.

According to New York Times writer Jim Arango, shortly after the September 11 terrorist attacks, a number of very senior media executives, including the heads of every major studio, met several times with White House officials to discuss how the entertainment industry could help improve the image of the United States overseas. One of the best ideas to emerge, the participants agreed, was to distribute American TV shows and movies to foreign audiences — especially in the Muslim world.

It worked … sort of … but not the way they expected. “In the last eight years, American pop culture, already popular, has boomed around the globe while opinions of America itself have soured,” Arango writes. The latest (2006) data from the Pew Global Attitudes Project shows that the image of the United States remained negative in the 24 countries in which Pew conducted its surveys.

Bryce Zabel, a TV producer and participant in the 2001 meetings with the White House, argued then that the United States needed to regard itself like a consumer brand.
“Products like Coca-Cola are far more effectively branded around the globe than the United States itself,” he wrote in a memo that was circulated around Hollywood.

Maybe the next administration should consider a pro bono partnership with an experienced branding firm or a public relations/marketing firm with expertise in corporate identity campaigns to do for the USA what has been done for other long-term quality brands that care about their image and reputation.

Private Equity: A Failure to Communicate?

It appears that private equity firms — in both Europe and the U.S. — are suffering from an insufficiency of public relations.

“Private equity has reached a ‘critical point’ in Europe and needs to act fast before Brussels imposes legislation on the industry,” says Jonathan Russell, managing partner and global head of buyouts at 3i Group PLC and the new head of the European Private Equity and Venture Capital Association (EVCA), in a recent interview in the Financial Times.

Private equity firms are facing sharp criticism in Europe, where at least one leading politician has branded them “locusts.” In the U.S., they are loath to publicize returns and fiercely guard the specifics of the companies they own, despite demands from media and political groups for more transparency.

Russell admits that private equity’s own failure to communicate is partly to blame for the political backlash. “We have a fundamental gap here,” he says. “There is an impression of private equity born out of partial knowledge and some prejudice around that, some of which has roots in reality, but a lot doesn’t.”

Several of my clients in New York City are private equity firms. Through strategic PR, we have found a way to bridge the gap between secrecy and transparency to find a happy medium that works for all parties.

The Demise of Truth?

A couple of years ago, in his My Three Cents blog, PR guru Ken Makovsky wrote about the concept of “truthiness,” a word coined by the Stephen Colbert, host of the Comedy Channel’s Colbert Report. Truthiness is believing what you feel or wish were true, without reference to logic, evidence or facts.

There’s new book out called True Enough: Learning to Live in a Post-Fact Society, by Salon.com staff writer Farhad Manjoo. In it, he explores the idea — well supported by cognitive scientists— that when the facts don't fit a person’s frame of reference, the frame stays and the facts are ignored.

Manjoo cites a study by Stanford professor Shanto Iyengar and Washington Post columnist Richard Morin who tested Republicans and Democrats’ reactions to a list of headlines covering topics ranging from politics and race to travel and sports. The headlines were randomly paired with one of four logos: BBC, CNN, Fox and NPR. Not only did the Fox logo triple Republicans’ interest in stories about politics and Iraq, it even increased Republicans' interest (and decreased Democrats' interest!) in headlines about travel and sports.

The rise of the internet and the disintermediation of the mainstream media were supposed to help us get to the truth faster than ever before. But when people choose to read only the news that supports their ingrained prejudices, those of us who are responsible for public relations and brand management must recognize that we are facing a bigger challenge than ever before.

Environmental Claims Meet with Consumer Doubts

It seems that everybody these days is leaping on the “green” (or clean technology) bandwagon. I’ve seen press releases and ads taking the moral — i.e., green — high ground from companies in virtually every industry, from financial services and professional services to pharmaceutical and technology.

It’s no surprise to find that the blogosphere is exploding with talk about environmental issues. According to Nielsen Online, sustainability buzz more than doubled between September 2006, when blogger messages on the topic totaled 83,000, and December 2007, when they had skyrocketed to 172,000.

Unfortunately, one of the most popular blog topics is corporate hypocrisy — also known as “greenwashing” — where companies misrepresent their commitment to sustainability with aggressive PR campaigns. Greenwashing was the topic in 25% of all sustainability discussions on the web in 2007, according to Nielsen.

Confirming consumer skepticism, a recent web survey by Burst Media, an online media and technology company, found that while 70% of respondents recalled seeing green ads at least occasionally, more than 20% said they never believe the claims. Two-thirds say they only believe the claims sometimes.

Before you risk overstating your company’s use of clean technology, check out the Federal Trade Commission’s Guides for the Use of Environmental Marketing Claims. Issued by the FTC in cooperation with the U.S. Environmental Protection Agency (EPA), they can help ensure that your company’s green claims don't run afoul of the law.