Who Were The PR Winners And Losers of 2017?

Yes, 2017 feels like a lifetime ago, given our breakneck news cycle, but there were plenty of public relations lessons over the year for big brands and business categories. Here’s a look at those who came out on top, and others who took a reputation beating last year.

The Winners

2017 was like a charmed year for the digital commerce giant. Digital assistant Alexa won pop-culture status, its Prime expansion was successful, and it made a splashy bet on physical supermarkets. But the real PR coup was the reality-show-like sweepstakes to find a second headquarters. The HQ2 search generated a frenzy of positive media coverage as well as 238 proposals from individual North American cities, and it helped cement Amazon’s status as a desired corporate neighbor and employer.

After “Today” show star Matt Lauer was abruptly fired following allegations of sexual misconduct, it seemed that NBC would take a terrible blow to its reputation. But its swift action and skillful handling of the situation by the remaining on-air talent helped turn things around.  Savannah Guthrie and Hota Kotb announced Lauer’s sudden departure with grace and poignancy – in real time, on live television. That’s harder than it looked, and it was a solid win for the network and its flagship show, whose ratings are up significantly since the change.

For the mainstream media, 2017 was a year of ups and downs. The MSM has been aggressively criticized by the president, and public trust in the press hovers at 41%, according to Gallup. Yet most national outlets posted gains in the ways that matter – ratings and readers. What’s more, trust in journalism has actually increased over 2016. After the election, most news organizations got busy reminding us why they’re needed with a renewed commitment to quality reporting. Cable news – which logically should have experienced a downturn after an election year  – reported a huge boost in viewership. Ditto the national newspapers; both The Washington Post and The New York Times broke subscription records. Best of all, journalism organizations like ProPublica and The Center For Public Integrity are enjoying unprecedented support.

Cryptocurrency had a great year in 2017, breaking through the $10,000 price barrier and throwing off some of its shady reputation. Bitcoin in particular attracted the kind of media coverage that only enhanced its appeal, even when the coverage was skeptical, thanks to the sheer power of blockchain technology. Without a core of innovation, the bitcoin story would be just another fad. But blockchain is seen as “having the potential to reshape the global financial system and possibly other industries,” according to Bloomberg. Despite naysayers, it offered journalists and bloggers the perfect recipe of high-tech and high-risk.

Who could have predicted the speed and ruthlessness of the #metoo movement? There’s a reason why Time magazine gained currency for itself and the movement by naming “the silence-breakers” as its Person of the Year. It swept the country like a virus, and, despite valid concerns about a backlash, the impact is far-reaching.

The Losers

2017 also brought a reckoning of sorts for Facebook. Remember when Mark Zuckerberg was asked about reports that Russia had peddled “fake news” on its platform to influence the election? He called it a ”pretty crazy” idea. Within weeks, however, Facebook would own up to the fact that it sold more than $100,000 in ads to Russian accounts, and that foreign actors used its feed to spread false and divisive stories about candidates and issues. It’s not alone among social media companies, but the brand has suffered from its casual and misleading response to the situation. As The Verge put it, “Facebook’s inconsistent statements, its history of errors in reporting on its own ad platform, and its reluctance to share relevant data about Russian hacking have added to its credibility gap.”

Tired of hearing about Uber? That’s because 2017 brought a pile-up of hits to its reputation. In the first quarter alone it was accused of crossing a picket line after the first travel ban, mistreating drivers, and using a secret app to evade regulators. But the real wreck came when engineer Susan Fowler penned a scathing account of her year working there. Fowler wrote about a toxic culture riven by infighting, gender bias and relentless sexual harassment. Like a lit fuse, her post burned through the tech community and exploded into public consciousness. Yet as often happens, the crisis gave Uber the chance to turn the corner on its troubles by replacing founder and CEO Travis Kalanick. New CEO Dara Khosrowshahi was quickly beset with a fresh crisis, though, when news came out that Uber covered up a 2016 hack. Khosrowshahi’s blog post about the situation is a respectable first step in showing transparency, but he has a long way to go. Here’s hoping for smoother road in 2018.

United Airlines
As the world knows, UA hit turbulence with its disastrous handling of a passenger situation that was caught on video. As images of the bloodied man being dragged from his seat by airport police went viral, the airline made things worse with a series of legalistic and tone-deaf public responses. The cultural impact was huge, yet the United crisis also shows business resilience. Its stock price took a hit, and CEO Oscar Munoz was denied a promised promotion to Chairman. But as the outcry grew, United changed its tack. It launched a more authentic apology tour, quietly reached a settlement with the injured passenger, and pledged that nothing similar would ever happen on its planes. The stock price bounced back in short order. In fact, the more lasting impact will be felt in the form of greater customer-service consciousness across the major industry players.

Unlike United’s experience, the reputation damage from Equifax’s massive privacy breach will haunt it for years. Not only was it negligent in maintaining security, but it waited months before telling customers that their information might be compromised. Although CEO Richard Smith eventually rose to the occasion with a well-crafted apology, it was too little, too late, and he was voted out by the Equifax board. Its stock price plunged 15% after the breach was announced, and the damage was compounded by the news that Equifax insiders sold shares before it was known. Equifax now faces greater regulatory scrutiny, more Congressional hearings, and a class-action suit by shareholders.

The irony of Harvey Weinstein’s fall from grace is that it was so long in coming, yet the collapse was breathtakingly swift. As the dominoes fell in entertainment, journalism, and politics, each company and industry had to grapple with who knew what, and when. The results were often ugly. But the good news is that the awareness of systemic sexual harassment and misbehavior has reached a tipping point, and the cultural and business changes will be profound and in many cases, permanent.

2017 Crisis Management That (Mostly) Worked

Armchair PR experts get lots of mileage from critiquing crisis management by major brands and businesses this time of year. But what about the crisis situations that are handled well? Those instances are less clear, presumably because we don’t hear about the bad news that never hit the press. But in the spirit of fair play, here are some examples of reputation management that succeeded in 2017.

Pepsi’s graceful mea culpa

Remember the short-lived Pepsi ad starring Kendall Jenner? It seems almost quaint now, given the explosion of reputation-killing headlines that have followed the brand “scandal.” Yet Pepsi’s fast action helped stanch the outpouring of criticism that the commercial was tone-deaf and trivialized true social activism. The ad itself fizzled, but Pepsi’s apology was a win. It was well-crafted, on-target, and even included Jenner in the mea culpa. Most importantly, the brand took full responsibility for the misfire and backed up its words by pulling the ad. It will be remembered primarily by marketing and PR professionals. Well handled.

Southwest Airlines’ soft landing

Everyone recalls the PR fiasco United Airlines experienced when footage of a dazed and bloodied passenger being dragged from his seat went viral. But consider how Southwest Airlines handled a tricky passenger situation in September. A woman who noticed two dogs on her flight claimed to have a life-threatening pet allergy, yet wouldn’t leave the plane. Police were called, and when she couldn’t produce necessary medical documentation for her claim, the airline had her taken off the flight. Her exit was captured on other passengers’ cell phones and enjoyed a brief viral moment on social media. Even though it was within its rights to deny boarding to a passenger who couldn’t travel safely with animals, Southwest acted swiftly to contain the damage. It issued a formal apology to the passenger the very next day and reached out to her directly to make things right. Fast action and a sincere statement of regret helped resolve a situation that could have grounded its reputation.

NBC’s live Lauer reckoning

The speed whereby the #metoo movement has toppled boldface names in journalism, politics, and entertainment is breathtaking, and major media companies have not been spared. In the wake of Matt Lauer’s firing for sexual misconduct, NBC will be scrutinized for what it knew and when, but it’s hard to fault the network’s handling of the announcement itself. Lauer’s visibly shaken co-hosts Samantha Guthrie and Hoda Kotb faced a live television audience within hours of learning about Lauer’s ouster.  Guthrie eloquently conveyed her conflicting personal emotions while being respectful to those who had come forward to end her colleague’s career. The “Today” Show’s ratings are up sharply since Lauer’s departure, ironically. The sincerity and honesty of the on-air disclosure may be why; it humanized the network talent and drew viewers into their experience in real time.

SoFi is spared major scandal

One company that may have escaped the brunt of the cultural shift on workplace harassment – at least for now – is online lending startup Social Finance, or SoFi.  A fintech darling, SoFi has grown rapidly, exceeding $4 billion in student loan and mortgage refinancing and building a reputation among millennials by hosting local-market social events for customers. So when a wrongful dismissal suit brought to light allegations of sexual harassment and faulty loan application cancellations, SoFi faced a dangerous situation. It responded aggressively to the allegations, pointing to an internal investigation that cleared the company on its loan cancellation policies. Yet as the drip-drip-drip about sexual misconduct by founder Mike Cagney grew, the board pressed Cagney to resign, and he ultimately did. SoFi may have gotten lucky with the timing of its crisis, and its troubles could have been overshadowed by those at better-known companies like Uber. But Cagney’s resignation removed a lightning rod from a situation that could have been far worse.

Uber’s reputation work gains speed….then stalls again

And then there’s Uber. It was beset with not one, but many reputation scandals this year, and the crisis isn’t over. But like SoFi, Uber accomplished one important thing during 2017; it replaced controversial founder and CEO Travis Kalanick with respected technology executive Dara Khosrowshahi. With Kalanick’s exit, some of Uber’s negative baggage departed also. But unfortunately the new CEO was immediately confronted with a fresh crisis – the disclosure of a 2016 security breach resulting in the theft of data from 57 million customers. What’s more, Uber covered up the breach after paying a six-figure ransom to the hackers to delete the stolen data and disguised the payout as a “bug bounty” for testing software. Khosrowshahi’s blog post detailing the situation and the planned fixes represents a good first step in managing the situation. But there’s no doubt about it; he has a long way to go before full confidence in the Uber brand will be restored.

How To Protect Reputation In The Age Of Leaks

Most companies hire PR agencies to help them get out positive news. But what happens when the juiciest stories about a business aren’t flattering? What, if anything, can a PR or corporate communications expert do to turn things around?

Consider Uber’s rough ride of late. First, a video of founder Travis Kalanick arguing with a driver made the rounds on social media, prompting Kalanick to issue a rare and soul-searching admission that he needs to “grow up.” Then The New York Times reported that Uber has been using a secret app to deny rides to regulators in areas where its service is banned.

This comes after Susan Fowler, who spent an eventful year as an Uber engineer, wrote a blog post detailing a culture of relentless sexual harassment, gender bias, and cutthroat competition at the company. And of course, Uber started the month in a storm of controversy after it was accused of crossing picket lines by drivers striking in protest of the president’s immigration order.

Each of these incidents is distinct, but all except one resulted from information supplied by Uber employees (or a contracted employee, as with the video posted by the Uber driver) and all are symptomatic of a corporate culture in dire need of change.

And Uber’s not alone in grappling with the impact of information supplied by its own people. Serious problems at one-time technology highflier Theranos were exposed by a series of investigative reports by John Carreyrou of The Wall Street Journal. It wasn’t until months later that we learned (through Carreyrou’s own riveting account) that his original tip had come from a whistleblower employee.

Whistleblowers erupt when corporate culture is toxic

Institutionalized whistleblowing is typically about a serious and systemic problem. Last year the Securities and Exchange Commission announced it passed the $100 million mark for the payment of whistleblower awards, leading to $500 million in financial remediation paid by companies. So, incentives and protections for those with the courage to speak out about unethical or illegal business practices is enormously valuable.

But for ordinary organizations, trivial leaks of internal conversations or information can be problematic. Look at the White House. It can’t hold a meeting (especially one about leaks) that isn’t immediately leaked to the D.C. press. Journalists routinely feature their contact information on confidential app Signal or other secure platforms number on their Twitter feeds. In some ways it’s a healthy sign, but there’s also reason for an ordinary business to fear the reputation damage resulting from a leaked claim by a disgruntled employee or competitor.

What’s an honest company to do? That’s where internal communications and a culture of openness come into play. The more open you can be in the workplace, the more loyal employees are likely to be. Here are five ways to maintain a culture of transparency that can help prevent or minimize leaks, rumors, and misinformation.

Communicate regularly

Regular staff meetings are a simple step toward transparency for a midsized organization. They don’t need to be gatherings where questions on every topic are invited; in fact, that should come in a different venue reserved for airing concerns. But the simple fact that rank-and-file employees are in the know on things like new clients or projects, pending business, and other positive developments will make them feel connected. Some entrepreneurial companies fear weekly updates because they don’t want to open up on financials or other details of the business, but total transparency on financials isn’t necessary.

Share bad news honestly and quickly

If the news isn’t all good, it’s better that staff hear it from management directly, to quell rumors and distortions. Resist the temptation to sugar-coat bad news; mixed messages will not help the situation. Above all, after explaining why the client was lost or the employee was let go, focus on goals for the future to ensure everyone understands that management is committed to moving forward, and that they have a role to play.

Use feedback tools

These are valuable for everyday issues that may not warrant a complaint to HR, or for sensitive matters where anonymity will encourage honest responses about problems. Many companies find a weekly or quarterly feedback survey an invaluable tool for assessing morale, worker engagement, and overall satisfaction over time.  But it can also be an early warning system to help stem a problem before it becomes systemic. Check out these employee survey tools as a starting point.

Mean what you say and say what you mean

A common stereotype in the PR business is the boss who hypes everything so that problems are glossed over, or the executive who promises the world but delivers nothing. It’s a far better internal communications strategy to be generous with positive feedback and open with business information, but stingy when it comes to promised improvements. Commit to only those changes or perks that you know are feasible. If a group of employees speaks up about a difficult or ongoing issue, promise that it will be addressed or discussed, and stick to that schedule, but don’t commit to any fix that you can’t deliver.

Show, don’t tell

Well, do tell your employees what your company values are, and make sure every new hire understands your business code of ethics, but don’t stop there. Use small examples of your values in action to show them how they contribute to the business. It might be the staffer who gave credit to a colleague, or the accounting clerk who caught an error in your favor. Continuous communication of the daily decisions that represent an ethical culture is one of the best ways to self-police.

When Brands Get Political: Is It Good PR?

PR.TweetA couple of weeks ago, I was called by two journalists wanting public relations insights on companies hit with blowback for comments about our new president. Should brands get political, they wanted to know? I shared my perspective that brands shouldn’t always shy away from controversy, summarizing with, “You can’t put your head in a hole, shrink back, and avoid the entire dialogue.”

The quote seems almost quaint after this weekend’s events. Social and media channels were blazing following the president’s executive order restricting travel to the U.S. from seven primarily Muslim countries. Even for those favoring a tighter refugee policy, the execution of the ban, which stranded travelers and caused confusion at airports and among government agencies, left a lot to be desired. But for the public relations community, the instant reaction of many large companies also signaled a change in our little world. For major brands, it’s getting harder sit on the sidelines.

Pressure to speak out, but risk either way

On Saturday, Uber stepped over a picket line when it failed to honor a New York City taxi strike in solidarity with those affected by the travel ban. #DeleteUber began trending almost instantly. Rival Lyft was quick to ride into the breach by pledging a $1 million donation to the ACLU, which dispatched lawyers to assist those stranded in airports and elsewhere. Then, Airbnb’s Brian Chesky announced his company would offer lodging to refugees stranded by the ban.

As outrage grew, more tech companies spoke out against Trump’s action, and Google’s Sergey Brin even showed up at a protest at San Francisco airport. Brin, who emigrated from the Soviet Union at the age of six, emphasized that his motive was personal, but there wasn’t much doubt where Google stands on the order. CEO Sundar Pichai announced a $4 million “crisis fund” and criticized the ban in an internal email, calling it “painful to see the personal cost of this executive order on our colleagues.”

Netflix CEO Reed Hastings capped the outcry by calling the ban “un-American” and Slack cofounder Stewart Butterfield tweeted that “every action seems gratuitously evil.” In one of the more dramatic commitments, Starbucks’ Howard Schultz — never one to shrink from a principled position — vowed to hire 10,000 refugees in 75 countries over the next five years. Schultz’s announcement, naturally, triggered a #boycottStarbucks hashtag that trended throughout the day Monday.

All this in the first 48 hours after the executive order. Certainly, large technology companies are invested in a progressive immigration policy and it’s in their interest to make those views known and to reassure their workforce. Studies show that CEO activism is safest – and probably most effective – when it involves issues with direct relevance to their business. But the new administration is setting up daily challenges for all kinds of companies and their leadership, as well as the communications teams who advise them. As the Trump administration moves forward, it will be critical for major brands to carve out their own positions on a range of hot-button topics.

A cost for remaining silent

There are risks in taking a stand on any controversial matter, particularly in our divisive political environment. You’ll never please everyone, and dealing with the inevitable customer response is a distraction from the day-to-day business at hand. An errant quote or hasty decision can precipitate a social boycott or worse. And as we’ve seen, a nasty tweet from Mr. Trump can cause a public company’s stock to drop.

But there’s also a cost in remaining silent. It’s more subtle, but it’s there, and it’s looming larger these days. Especially for our biggest and most socially visible corporations – from global technology companies to major consumer brands – the expectations are growing. Look at the pressure on Sheryl Sandberg, who until very recently had not spoken publicly about Trump’s policies or rhetoric. Expectations of business leaders, particularly those who’ve articulated social values, are very high. They’re driven even higher by those who set an example, like the CEOs who spoke out over the weekend on the immigration EO, or the many who publicly condemned North Carolina’s “bathroom bill” last year. Both situations evoked a response that merged business concerns and social values, and both grabbed public attention for the companies involved.

Millennials expect more

Another reason for the growing pressure on big brands to speak out is that most crave the approval of millennials, the customers of today and the future. This rising generation wants to know where the brands they support stand on key issues, and they’re quick to use the power of their pocketbook to support, or punish, where they see fit.

So, what’s a brand to do? The task for most organizations is to understand the attitudes and values of their own employees, customers, and other stakeholders on high-priority social and political matters. Their engagement with their best customers and advocates should transcend traditional marketing and PR research to work at a gut level. Then they must articulate their own corporate values relevant to burning issues and communicate them consistently and thoughtfully.

Above all, authenticity matters. For any brand that jumps on a breaking story for some quick publicity without a true commitment to the issue, or absent preparation for all types of customer reaction, there will be a steep downside.

It’s not easy. But something tells me the tough and divisive issues aren’t going away any time soon. As one protestor’s sign read, “We’ll be here tomorrow.”

Teams are choosing sides; companies and their brands should be ready.

Is Anything Ever Really Off The Record?

Uber hit another reputation speedbump yesterday when one of its senior executives shared an unusual suggestion for generating better PR for the brand with a group of notables. At a celebrity-studded dinner in New York, SVP of Business Emil Michael floated the idea of hiring opposition researchers to dig up dirt on journalists who’ve been hard on the company in order to “give them a taste of their own medicine.” Michael singled out Pando Daily’s Sarah Lacy, who has accused Uber of encouraging a misogynistic culture.

Talk about a trainwreck (car wreck?). Apparently Michael thought he was speaking off the record, so the whole thing might have been another crazy cocktail-party story except for the fact that there were journalists present. One was Buzzfeed’s Ben Smith,  who promptly posted a story about the bizarre conversation, because no one told him anything was off the record, and therefore it wasn’t.  Twelve hours later, many are wondering if Michael will keep his job. Twitter dashboards lit up with the item, it was instantly picked up by major media outlets, and of course, Lacy responded to the story. The situation seems doubly ironic as it was intended as part of a charm offensive for Uber founder Travis Kalanick.

In nearly anyone’s book, Michael’s remarks were nutty. Probably the least remarkable part of it was his failure to confirm ground rules given the presence of media professionals. I don’t know if the fallout will actually hurt Uber’s business, but it’s bound to stall the PR engine. The lack of judgment and cultural arrogance that it takes to float a “black ops” campaign to a group of influencers is pretty staggering.

But for PR professionals and our clients, it also raises the questions what is off the record. It even made me think of the celebrated interview by the late Michael Hastings with General Stanley McChrystal. Possibly because alcohol was involved over the days Hastings spent “embedded” with McChrystal’s group, members of his entourage got cozy with Hastings and were way too free with the opinions they shared. They criticized President Obama, and after the story was published, McChrystal submitted his resignation.

It doesn’t have to be that way. PR professionals and journalists have worked together and shared mutually beneficial information for decades, and often part of a given exchange is off the record. It can and does work. But here’s what all of us need to remember.

Off the record means different things to different people. For most journalists, it means the information can be used, but not attributed to the one who divulged it. Yet to others, it can mean the information is not for publication and can be used only to search for corroborating information. It’s essential to spell things out.

Nearly all journalists will respond to clear ground rules. They may not agree to the rules proposed, but clarity will avoid a world of hurt. And I’ve never known a reporter to break his word once there’s a clear agreement not to use or attribute the information being shared. The point is, there are no rules until they are mutually agreed upon.

Anything off the record must be established in advance. Clients sometimes make the mistake of trying to do this retroactively. Don’t try to change the rules after the beans have been spilled. If the information is juicy, any reporter worth his/her stuff will run with the story.

Never assume a social conversation is private.  Just because it’s a holiday party or a wedding rather than a formal interview, you cannot conclude that anything in a journalist conversation off the record. A close friend of mine used to be married to an ambitious investigative reporter who would routinely chat me up about my clients. My answers were bland and boring. It was probably an overreaction on my part, but it’s simply not worth the risk to share anything interesting, let alone controversial.

Work with a media relations professional. Yes, it’s self-serving and obvious, but if a PR person had been in the room, I don’t think the web would be buzzing about Uber’s latest gaffe. When in doubt about media relations ground rules, it pays to consult with top-tier people who do it for a living.