Formula for Building Trust Shifting

The recent Edelman survey on trust has plenty of interesting findings – and some surprises that seem to contradict conventional wisdom on social media. The study suggests, for example, that consumers place the most trust in expert spokespeople and information sources (such as industry analyst or stock reports) but that trust in traditional media sources continues to erode. No real surprise there, except for the related finding that trust in “peers and friends” has dropped dramatically. An AdAge article suggests this is due to the explosion (and dilution) of online “friending” coupled with increased skepticism by consumers. Based on this survey, “peer-to-peer” marketing is not the magic bullet some had thought, but just one piece of the solution. And it’s interesting to see that “expert” sources – including CEOs and other credentialed folks – are still seen as a valuable source in the midst of multi-media noise.

I agree with Steve Rubel’s take on the findings that this is good news for PR. Consumers still seek a range of expert sources they can trust, and positioning credible experts – and building their profile and bona fides – is the core of effective PR. What continues to change is how to do this, and where to place these experts. Over the past decade or so, we’ve learned it’s not enough to get the big hit in the Wall Street Journal. What the Edelman survey also suggests, however, is that generating buzz and kudos on social networks is also insufficient. Social media has become a critical platform for PR, but it’s not the only tool and it’s not fool-proof. Smart communicators should continue to pay close attention to the information needs and habits of consumers, and keep focusing on the credibility of the messenger and messages. No matter what the platform or format, that still seems to matter.

The Dirty Secret of Internal Communications

A recent blog post in the Harvard Business Review’s “Conversation” section is a good commentary on the reluctance of most large companies to introduce social media inside their workplace. The authors go on to list several good reasons why companies should leverage social media within their organizations – including studies suggesting boosts in productivity and collaboration and the increasing relevance of millenials who will expect social media technology. (The Robert Half study mentioned in the post is here.)

Like these authors, I’m disappointed and puzzled at the resistance among many corporations to consider social media (which I’ve witnessed more times than naught) but if you dig a bit deeper it’s only the latest evidence of the lack of genuine commitment for internal communications in some major companies. As an example, let’s use something that is ostensibly much less threatening  than social media – say manager communications. For years we’ve heard about the importance of managers in effective employee communications…many still see managers as the secret sauce for engaging employees.   And most corporate leaders typically voice strong support for robust, relevant employee communication. Yet, some companies still refuse to allow their managers any time for formal communication under the premise that time is money (and presumably keeping employees informed is not worth paying for.) Others pay lip-service to the manager cascade model but provide limited direction, incentive or training to make sure it happens. In some cases, managers are not even given (or allowed) access to computer terminals so they can proactively stay informed. Clearly, some companies do not buy into the concept that candid two-communication and collaboration is good for business. While some companies are celebrated for building strong manager-led communication models (like FedEx) too many others prefer the path of least resistance…and investment.

In view of this dirty little secret, it’s not surprising that most companies won’t consider a more progressive approach that embraces social networks, collaborative software or blogs inside the enterprise. They are still fighting last decade’s battle. The result is a corporate landscape where the gap between the leaders and laggards is getting bigger every year.

Toyota Recall Shows Even Best Reputations are Fragile

It’s been fascinating to watch the media coverage and Web chatter around Toyota’s massive global recalls due to faulty accelerator pedals. Check out some of the media coverage here and here. Toyota has received kudos from some for being proactive about the recall, while others accuse it of knowing about the problem but keeping it buried. To me the bigger story is the damage to Toyota’s once pristine  reputation as a corporate paragon.  Even accounting for media packaging, there’s no shortage of Toyota customers – and fans – willing  to share their deep disappointment and even anger at the developments, almost as if they’ve been personally betrayed.

The lesson here – if we needed another example – is that even the strongest brands are fragile, and vulnerable to a rapid and even permanent decline in equity with consumers. That’s particularly true if the scandal is related to the organization’s key assets. Indeed, some pundits suggest Toyota’s fall from grace is so acute because its lofty reputation was based on the quality and reliability of its products, efficiency of its factories and progressive management culture. All three of these assets have been brought into question…if not obliterated. Is it possible that Toyota’s apparent obsession with passing General Motors as the world’s largest automaker made it take its eyes off the ball? If so, it wouldn’t be the first time hubris caused the downfall of an organization.

Another conclusion I draw from this episode is that old chestnut of PR and crisis planning – building a “goodwill” bank – may not be the insurance policy it’s cracked up to be. I assume Toyota has spent plenty of time and resources trying to burnish its reputation. Solid corporate citizen…check. Manufacturing legend…check. Dependable employer…check. None of that seemed to matter much when the scandal hit the airwaves. That magic pixie dust of brand reputation – trust – is hard to earn but easy to lose. It will be interesting to watch the outcome of this scandal – not just in the short-term (the recall will reportedly cost billions in lost revenue) but over the next few months and years. The one thing in Toyota’s favor is that consumers seem willing to forgive and forget.

Coverage of PR Growth Misses Inside Story

The always-erudite Economist magazine recently featured an article detailing the growth of the American public relations business this past year – in contrast to falling revenues in marketing and advertising. The Economist folks attribute this boost to a number of factors, including: a spate of high-profile corporate scandals; the explosion of social media; and, PR’s expansion into specialized fields like web projects and event management. An interesting side theme in the article is the increasing blurriness between PR, advertising, web firms and other agencies as evolving technology – notably the boom of social media and online commerce – forces consultants to stake out new ground and learn or buy new capabilities.

From my perspective, what’s missing in this analysis is the strong demand for counsel and support for internal communications. All of the developments listed by The Economist are also relevant for employee audiences – particularly the increasing use of digital technology to help communication and collaboration within organizations. In many cases, the corporate intranet is at the nexus of these discussions, and often becomes the main platform for information-sharing and networking. And much like the external side of PR, lines are blurring between departments that historically defended their fiefdoms – such as Human Resources, IT, Legal and communications. Presumably this  collaboration has been turbo-charged by the lingering recession, which resulted in millions of lost jobs in the U.S., and created even more need to keep the best talent. Informal discussions with my peers in the communication business suggest there is increasingly robust demand  for consultants who can help companies leverage the new technology to more effectively inform and engage their employees. Given the dramatic gap in technological savvy and appetite for progress across companies, I don’t see that changing in the near future.

Employee Dissatisfaction Wake-Up Call for Corporate America

The latest Conference Board survey suggests U.S. job satisfaction is at its lowest point in two decades.  Based on the survey, only 45 percent of employees are satisfied with their jobs – down from 61% in 1987. The negative findings cut across all ages and income brackets, and the trend is consistent through  periods of both economic boom and bust. Perhaps the most worrisome finding is that younger workers – notably those under 25 – are the least satisfied.

This survey raises three questions for me. Is this a surprise to anyone? What are the implications for business productivity? And perhaps more importantly, why is this a persistent trend? Let me tackle the third point here.

There are numerous theories on the inexorable erosion of worker satisfaction in corporate America, including: the dissolution of the implicit “compact” between workers and companies through layoffs and cutbacks; lack of executive transparency; widely uneven salaries and perks; and, lack of support/training for beleaguered managers. Ultimately, I would argue, it all comes down to the basics of any relationship: trust and respect.

Despite sustained effort – and presumably some good intentions – many companies still fail to treat their workers with the fundamental behaviors required for a lasting, mutually beneficial relationship. And this goes beyond the obvious proxies for respect – such as pay (which for many is stagnant or down), benefits (being eroded) and development opportunities (more illusion  than reality for many).  For those of us in the communication business, we see constant evidence of this implicit (or sometimes explicit) lack of respect. Many leaders still hesitate to trust their employees with critical information – often using the argument it’s too complex or sensitive – or allow them to access the internet. Few executives seem truly committed to listening to their workers, and seriously considering their questions, comments and  suggestions. In fact, many corporate strategies or plans appear to be hatched and delivered with virtually no input from workers…who are of course the ones who will have to execute the programs. And incredibly, despite mountains of evidence on the importance of managers to employee satisfaction, many leaders still balk at investing resources or time to help their managers communicate with their teams. As a result many corporate programs aimed at employees – ranging from cultural or value campaigns to strategic overhauls – ring hollow and often die on the vine.

I suspect some executives will argue these negative findings are par for the course in a down economy, or that a gap between leaders and workers is an inevitable part of business. I would suggest they go back to the drawing board and start with a genuine commitment to understanding their workers and seeing them as partners. Otherwise, employee satisfaction, commitment and productivity will continue to be elusive.

NASA Shows Value of Integrated Campaign

During a recent visit to NASA’s Houston Space Center, I kept hearing and seeing a recurring theme: “Failure is not an option”. This was not likely not a coincidence. Though the tours and facilities are presented as a tourist attraction, the folks at NASA clearly want to get out their messages on the value (and potential) of their space agenda. At every event – even fun shows like “Living in Space” – the hosts included a short prologue on the value of space travel and excitement about future missions. Film trailers and promos all had similar language about the value and viability of NASA. During a tour of the Jupiter rocket facility (which was used for all Apollo missions) a retired engineer who worked on the Apollo 11 mission gave an informal demonstration and shared stories on the legendary lunar landing. He certainly appeared genuine, but he was also on message about the huge value and potential of space travel. Finally, it was hard to miss that a good portion of the gift shop was filled with products branded with “Failure is not an option” – the famous statement associated with the Apollo 13 mission (and also the title of a book by NASA scientist Gene Krantz.)  Though there are questions about the origin of the statement, it has apparently become a mantra within NASA, and they are now using the theme to brand themselves with outside stakeholders – including visitors to NASA facilities.

The subtext to this visit, of course, is that NASA continues to fight for increased funding and approval of specific programs, such as the relaunch of moon mission. So the ultimate audience for the messages shared in Houston are for President Obama and legislators. NASA seems to understand that their best approach may be to align their staff under a central theme and educate and engage citizens as their advocates. Might their not-so-subtle message to Washington be that they are able and determined to launch successful missions on budget – or “not fail”?

Digital Marketing Trends Relevant for PR

One of the most important lessons for me over the past few years – marked by the emergence and then explosion of social media – is the growing irrelevance of boundaries between marketing, public relations and corporate functions like IT and HR. In fact, I would argue blurring these silos is not only beneficial, but critical, for organizations intent on fully engaging their audiences. Some of the best innovations in social media (and communications) have come from cross-pollination and collaboration across disparate corporate functions, and there is a rich crop of new ideas emerging on a regular basis.

As exhibit A take a look at these proposed digital marketing trends by Advertising Age. At first glance, some of these appear to have huge potential well beyond pure advertising, notably:

• Growth of viral videos
• Gaming becomes more social and mobile
• Boom in mobile web access
• Customization based on location
• Real-time search
• Social graphs and networks

Innovative companies are already leveraging some of these ideas in their communication programs, but imagine how much more could be done. Even with seemingly obvious assets like video and mobility, many companies seem hesitant to fully leverage these tools within their own communication networks. Imagine adding ingredients like GPS capability and real-time search in corporate intranets, for example, or introducing more gaming technology into communication materials and training. Why not use an application like foursquare, as another example, to help employees identify colleagues near their location and compete for “mayorships”? Or allow staff more leeway to create and leverage personal groups – either on internal networks or outside the firewall? The potential seems unlimited.

From my perspective, the barriers are typically not with end users – though there will always be inherent realities based on job function – but rather with executive timidity. Many companies don’t even let their employees access social networks the company uses for marketing campaigns. Leaders would be better served to explore what they could do, rather than what they shouldn’t do.

FYI – For an interesting comparison on trend prognosis check out David Armano’s take in HBR.

Eurostar Crisis Shows Social Media Not Optional

The disruption of Eurostar’s train traffic in the “Chunnel” last week holds a valuable lesson for those intent on leveraging social media to communicate with customers: the biggest risk is not in diving too deep…but not deep enough.

In the aftermath of the crisis the communication folks at Eurostar admitted that their social media programs – focused narrowly on push marketing activities – were of limited use to communicate with customers during the crisis. They are planning to totally rethink their social media approach in 2010. Apparently, Eurostar’s various platforms (notably on Facebook and Twitter) were not set up to manage a robust Q&A with customers but rather to promote its “Little break, big difference” campaign. Eurostar made the best of the situation and leveraged their existing marketing platforms, but frustrated customers had to hunt for Eurostar updates (including the CEO’s apology on the “Little Break” website.) Hard to believe, but Eurostar and Eurostar-UK Twitter handles were not formal company channels. The company eventually put an apology letter from the CEO on its corporate website. Needless to say, the vacuum of official Eurostar information and real-time updates compared unfavorably with the torrent of complaints and speculation by customers and interested observers.

There are several valuable lessons on social media engagement here for communication professionals:

• Don’t make it hard for customers to find you…or talk to you…or ask questions. Eurostar’s platforms were either dormant, irrelevant, silent or branded with obscure marketing names the average customer would never have heard.
• Make sure you are prepared to quickly get out your message where the conservation is occurring…not just your own platforms (even if they are excellent).  With real-time search and mobile updates its critical to quickly fill the information vacuum during a crisis.
• Be careful to limit and/or silo your social media strategy. Having marketing as the lead manager proved disastrous for Eurostar. Ideally, any program should be fully integrated and managed by a cross-functional team. Branding, messaging and technology should be aligned and complementary.
• Do a good inventory of all relevant pages/sites on major social networks – which typically unearths a number of rogue corporate and employee sites – and implement a strategy to inject a formal presence in the mix.
• Remember that social media platforms by definition are about conversation – not just pushing information. So learn to listen and respond…all the time.
• Don’t ignore the critical role – and potential reach – of traditional media channels, which can also help get key messages and updates out. Eurostar CEO comments were featured on BBC updates – but not soon enough for stranded passengers.
• Have a clear policy for employee online behavior and commentary. Some of the comments I saw on Twitter and Facebook appear to be Eurostar employees, but it’s not clear if they are speaking as observers or in a formal role. Furthermore, their comments are decidedly mixed.

Ultimately, the biggest lesson here is that social media is too prominent in the communication (and marketing) mix to leave as an after-thought or one-shot marketing campaign. Companies that dip their toes rather than take the plunge do so at their own peril.

Search on Steroids Means More Changes for PR

This past week Google took a few big strides in the race to offer the most comprehensive online search technology – introducing some new features which allow users to see real-time updates and further personalize their findings. Search results will now automatically include a stream of real-time (and constantly updated) comments from social networks, news feeds and blog posts. Searches on Google will now include real-time updates from sites like Twitter and Facebook. The findings will also be further personalized based on previous searches by the user. Google also introduced an interesting new feature allowing users to use a photo (taken on mobile devices) to get information on the object in the picture. Check out a blog post on the announcement here and news coverage here and here. (The original announcement by Google, complete with video examples, is here.)

Most of the coverage and blog conversation about Google’s announcement focuses on how this will impact the search engine race, particularly the impact on upstart Bing and networks like Twitter and MySpace (who have their own upstart search functions).  But speculation on the implications of “supersearch” on PR – and communication professionals – is just beginning, and no less interesting. Here are my initial take-aways.

• Companies focusing on using SEO to manage their profiles on Google will have a harder time, since now a good part of the results will come from more fluid, unpredictable networks like Twitter – where conversation is much harder to follow, and very difficult to shape.
• These changes give social networks even more prominence and potential clout than before, so organizations that do not have a formal presence on these sites need to quickly devise a strategy for building a credible profile – ideally through an influential group of friends/fans/followers. Putting up a corporate page on Facebook or MySpace and letting it gather dust is no longer an option.
• Since Google makes it that much easier for users to find breaking news and commentary on any topic – and uncover emerging content trends – it becomes more critical that communicators themselves keep abreast of relevant developments and online chatter. If monitoring the Web was important before – relatively easy using aggregators like NetVibes and Google Reader –  it’s become an absolute necessity now.
• In a similar vein to the point above, managing a crisis becomes a more dynamic and challenging exercise in this real-time, robust search environment. Communicators eager to quell rumors or address a contentious issue need to consider if and how they can implement their strategy within this cacophony of search data. At minimum, they need to find an effective way to get the word out (perhaps through their own friends/fans on these networks or sympathetic bloggers.)
• Companies who use Google for Web search on their internal systems will be able to leverage the new real-time technology, but those on the cutting-edge will want to explore how they can use the same search logic with their own proprietary platforms and sites – such as their intranet or internal networks. This would allow employees to benefit from the latest commentary and news on salient internal issues, which previously might have been buried in emails, rogue sites or hidden files.
• Finally, it may be stating the obvious but organizations that don’t yet have clear policies and protocols for online use are at even higher risk of a self-inflicted reputation implosion. Staff need to understand what they can and can’t do on the Web – whether it be on their own time or as formal representatives of a company. The heightened popularity of Twitter and Facebook and increased profile on general search substantially raises the stakes.

Ultimately, the lesson for PR professionals is simple: ignore these changes at your own peril. The pace and scope of progress in communication technology requires sustained observation and planning.

Does the CEO Make a Difference to Performance?

A recent article in the Wall Street Journal makes a provocative argument that changing CEOs makes little or no difference to the performance of an organization. According to the article, a number of studies over three decades have shown a consistent finding: Changes in leadership account for only 10% of the variance in corporate profitability on average.

My first reaction reading this was shock…almost disbelief. After all, I’ve spent most of my career as a communicator providing counsel and support to senior leaders under the premise what they did and said would have a deep and lasting impact on their organization. Were all those speeches and brown bags all for nothing?

But upon reflection the article makes plenty of sense, and confirms that driving change is difficult…as much a result of external factors and chance as planning and personality. The author’s argument is more nuanced than first appears, and he acknowledges the pervasive impact of legendary leaders like Steve Jobs at Apple or Jamie Dimon at JP Morgan Chase. So management is important…but other factors have an even bigger impact – notably the economic context and sheer luck: “Most researchers agree that a company’s results are determined less by its CEO than by its industry and the economy—which, in turn, are shaped by a host of factors that most CEOs can’t control, like the price of raw materials, the value of the dollar, interest rates and inflation, bursts of technological innovation and so on. In short, good management can’t solve all problems, while some problems can get solved even without good management.”

I would argue there’s another reason for the tempered impact of senior leadership: Culture. Too often, leaders (and the communicators helping them) ignore the huge challenges of shifting a workplace culture. New leaders come in with a blaze of messages and activities – including a purge of recalcitrant executives – but without a concerted effort cutting across cultural drivers they often fail to get traction for their agenda. I’ve witnessed situations where leaders try to impose their new business plan in organizations with cultural DNA that is anathema to the vision, or cases where CEOs don’t clearly articulate or support their new business strategy — which provides the operational blueprint and recipe for improved returns.

There’s a long list of companies who have tried and failed to reinvent themselves or boost their performance with leadership changes…and if you do an autopsy you’re likely to find a reliance on quick, superficial solutions and grandstanding rather than making the tough choices to drive real change. The result is employees who are either uncertain or unwilling to alter their routine, with many “waiting out” the new CEO. Perhaps the ultimate lesson here is not just “it’s the economy, stupid”…but also that nothing changes without the understanding and support of employees.