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Rupert Murdoch, Phone Hacking and The Naked Cowboy
I love New York. It is perpetually in your face, but the city is at least honest about it.
I was there once at Halloween and saw Napoleon walking down the street en route to a party. Nobody paid attention. I was there once and saw Dennis Rodman wearing a wedding dress, en route via horse-drawn carriage to a book signing of his autobiography. People did pay attention that time. Unlike the French emperor, who was hurried but minding his own business, the basketball star was in your face.
People, particularly tourists, also pay attention to the Naked Cowboy. This is a muscular young fellow whose base of operations is Times Square. He wears a cowboy hat, cowboy boots, a guitar, and briefs. And that’s it. You want your picture taken with his putative icon? Give him a little money and he’s glad to oblige. It isn’t what he says as much as what he does, but he’s in your face too.
Rupert Murdoch and the News International phone-hacking scandal are a lot like the Naked Cowboy. It isn’t what they say as much as what they do, but it appears that they’re in your face too.
If you haven’t followed this saga, some journalists employed by a Murdoch newspaper in London, News of the World, allegedly used hijacked phone conversations of royals and celebrities to create sensational news coverage. But it was really when it was discovered that the phone of a murdered schoolgirl had been hacked that the scandal mushroomed and began to involve Murdoch and his son, James.
Why would journalists apparently be willing to breach every journalistic code of ethics – and if so at the same time also break the law as well?
Generally, media have responded in one of two ways to the market forces that have whipsawed them in recent years, largely driven by the free availability online of just about everything the media used to sell.
Some media have decided to provide even more useful information than in the past, for example for insight that is compelling enough that people are willing to pay for that analysis to help make decisions.
But other media have decided to provide even more controversial coverage than in the past, stories that are salacious and scandalous but can be hard to take your eyes away from, like the scene of an accident.
Guess which one News of the World – owned by News International, a subsidiary of the Murdoch parent company News Corporation – allegedly chose. If so, it worked for awhile. News of the World was the most profitable Murdoch paper in the United Kingdom, until it was shuttered.
What does this mean for you? Well let me be a little in your face about this …
Generating news coverage now is “do-it-yourself.” Much of what companies used to communicate about themselves – that is, real news – now lands between the extremes of deep analysis and salacious copy and that means the media may take little or no notice of your company announcements.
Here are two suggestions.
First, when you get ready to announce a new product for example, don’t just talk about the product. Talk about the trends behind your development of that product. What did your customers tell you that led you to develop the product? How widespread is the challenge facing your customers? It is up to you to explain to the media why your announcement is news. That is, you have to demonstrate the news.
Second, also deliver the news directly to your audiences. Post your news on your Twitter, Facebook and LinkedIn pages – and on the social networks you’ve created for individual audiences from customers to investors to employees. You can include a link to the release. Create your own video story about how your new product solves a problem. Send it directly to your top customers, and post it on your web site. Chances are that the media then will use your news, too.
And more.
There are many examples of media that are evolving or emerging as the best and brightest around the world. And they are more vibrant and vital than ever. Look at Bloomberg and Reuters. Look at 21st Century Business Herald (China) and The National (UAE). Look at Huffington Post and Patch.com.
But as the media change, so too has the definition of news. It is now your responsibility to define the news. And that means it is also the opportunity you never had before to define your own story.
One of the trends we spy among major media is their rising interest in talking and meeting with chief executive officers. In fact, this is expressed more often as a plea to us for such access.
Certainly beat reporters always are interested in chatting with CEOs. But this is different. What we see as we deal with journalists whose beats transcend sectors, for example economics and management matters, is increasing requests for access to many more chief executive officers.
What chief executive officers have to say may be interesting, but that is not why they are suddenly in season. The reason is that major media are rapidly expanding news coverage in exquisitely specific ways. They are focusing on topics of the greatest interest, which can attract paid subscribers and paying advertisers. These include energy, health, politics and economics.
And all of this is being driven by a fierce and escalating rivalry between Bloomberg and Reuters. Bloomberg and Reuters dominate in the delivery of breaking financial news as well as breaking international news. But that isn’t enough.
In a speech to an international audience last year, I talked about four reasons that I am excited about the future of journalism. One of these, I explained, was the incursion by these two wire services into increased analysis and opinion beyond simple reporting of breaking events.
Bloomberg and Reuters are expanding their coverage especially of those sectors cited above – energy, health, politics and economics – as well as many others including aviation, industry etc. This deeper reporting and analysis is what is driving the demand for access to chief executives.
One result is that Bloomberg started recruiting some of the best national and financial journalists in the world and Reuters now has joined that battle with similar hiring coups.
And they are forcing others – particularly the other major wire services, Associated Press and Dow Jones, but also every other major media that sees both the opportunity and the challenge here – to reinforce their reporting teams. Top journalists who a year ago were often being seen as liabilities because of high salaries now find themselves with even better job opportunities.
Bloomberg and Reuters are battling to become, and be recognized as, the most influential news organization in the world because that is an even more lucrative franchise than each occupies right now. So everybody at Bloomberg and Reuters wants to rule the world. And every other major news organization now is forced to deal with this arms race or be left behind.
This war is really about the business model that will work best in the future of journalism. It is, as always, about money. What does all of this mean for you? Here are two suggestions.
You don’t have to take “no” for an answer. If you don’t get what you want from conversations with the “beat reporter” who follows your company, you have other options. One challenge in dealing with beat reporters is that they may think they know the company better than they actually do – and so may dismiss a story you think is worth telling because “everybody already knows that about you.” With expanding coverage from Bloomberg and Reuters via the attendant stockpiling of reporting talent, you don’t have to start with or settle for the beat reporter. All those new and talented reporters covering energy, health, politics, economics and other topics with broad interest, are looking for stories. Is there a specific message you want to convey on your success in sustainability, innovation, policy?
You can reach more global markets via local bureaus. Bloomberg and Reuters are not just building armies here in the United States. Both also are expanding their empires with more reporting talent in key markets around the world. When your chief executive visits operations or customers in Brazil, China, India, Russia and other emerging or developed markets, there will be interest among these global media as well as others in talking with your executives. Do you need to brand yourself more strongly with your customers there? Do you need to differentiate yourself more ferociously from competitors? Do have a perspective on an issue of importance in that market that you want to make known?
The news media devoted considerable coverage to “flash mobs” that communicated via texting or social networks in Philadelphia, London and other cities, as if this were a fresh development.
Mobs are new? How about the Boston Massacre. That was 1770. Texting is new? OMG u kidding me. How long have we been texting via phones, tweeting on Tweeter, friending on Facebook? Five years?
But to the news media, the combination of social media with anything else is still a story. Social media is not the novelty that mainstream media still think it is. So, how long will this last? It will last as long as the mainstream media think that social media is the story instead of the facts, such as the fact that many people involved in flash mobs had criminal records and used the opportunity for thievery.
This tendency to focus on the wrong thing reminds me of T ball, a game that is generally the first exposure most kids have to baseball. The ball is placed on a stationary “T” and batters swing until they hit it. Everything else is pretty much like the game of baseball. The batter runs to first base, the players in the field try to catch the ball and throw or tag out the runner.
But usually what happens at least at the start of the season is that any time a batter hits the ball, every kid in the field converges on the ball no matter where it is. They think the goal is to possess the ball. So a winner emerges from this scrum and proudly holds the ball in the air. Meanwhile the runner is safe.
This is what happens often in journalism. That is, reporters focus on the wrong goal. We could call this ”flash mob … journalism.” Except it isn’t new. It’s “pack journalism” updated. Here is what I mean.
Forty years ago, David Halberstam was the doyen of politics writers. But he noticed a disturbing trend early in one campaign: other stories about speeches or events were similar to his stories. At the end of every day, reporters following a candidate headed to the press tent to write their stories. They knew that Halberstam would pinpoint the best angle, so they waited until he started typing and then walked by and peeked at his story. One day Halberstam struck back. He let this happen, but when the others scurried to their typewriters to copy him, he pulled out the story he had apparently been writing and instead wrote his real story. He only had to do this once and the pack stopped following his lead.
There are many talented journalists whose insights affect actions and attitudes. If this were not so, there would be little demand for what I do for a living. But pack journalism remains a challenge and in fact it is exacerbated by the 24/7 news cycle that forces quick and unfortunately sometimes imitative reporting.
Here is what this means for you:
Trouble may hit you like a flash. Reporters now and then get wrong ideas in their heads. It happens to all of us. But never have reporters moved so swiftly to pursue a story than now because of the pressure in this 24/7 news world to get a story fast. So they may take an idea that in the past they would have thoroughly researched before pursuing. And they may not worry much about whether you are available to respond. This happened recently to a corporation when a newspaper columnist decided for himself what the company position was on a certain topic and wrote a story without contacting the company. The company sent a strongly worded response to the columnist as well as to his editor and publisher not just rebutting but actually disproving the column. That sort of over-the-top response is now necessary if the media decide what you think without bothering to ask, or what the story is without supporting facts.
You need to master the mob before it grows. These days nobody can permit a wrong idea to flourish long because it will become institutionalized as if it were fact. When that happens, you will never change how people look at you on that issue. About that story cited above? The pressure to produce stories also leads some reporters to take a story initiated by another and make it their own with additional details. So at the same time the company had to deal with this columnist, it had to deal with other reporters who saw the column and wanted to pursue the same story. At least they called. Once they heard all the facts, they did not do that story. But only because the company first said to them: “You can run that story, but you will be wrong.” That will grab the attention of a reporter simply because historically few corporations ever responded that way. It is a bold response. But there isn’t any choice now. If you don’t disabuse a reporter of a wrong idea, he’ll write that story and then you’ll have to deal with the mob that follows. You need to master the mob before it grows.
As I watched the politicians battle over the debt limit, the stalemate reinforced the conclusion that it is extraordinarily difficult in our society to have an objective discussion about any issue.
We are all witnesses to what I would call the fall of objectivity and the rise of opinion. We might all have a different opinion about the reasons behind this change. Here is my opinion. And by the way, it is the right one. This is the democratization of opinion. That is, through personal blogs and social media, everyone can express an opinion about everything. And so we do. See above.
The concomitant change from objectivity to opinion forms the largest shift in journalism. The reason is that general-interest media are dead. It is a long story and not my focus today, so here is the short answer – no one can make money selling general information to the general public.
But news media that establish a particular franchise, focusing energies on one topic or a small number of topics, are becoming hugely successful and profitable.
Having a franchise permits the media to examine one topic that invariably is of interest to a specific but often considerable number of people – say, for example, economics or mergers or energy – in such detail that people will pay and well for insight and analysis on the topic.
The New York Times and The Wall Street Journal both, for example, have established discrete departments devoted to deals. “Deal Journal” adorns www.wsj.com and “DealBook” spices www.nytimes.com. Both leverage their historical strengths in M&A coverage with additional analysis of what is happening in the deal arena and what it means for all parties. The Times alone has 20 journalists contributing to DealBook, and The Journal similarly uses a dedicated staff augmented by contributions from across the newspaper and the Dow Jones wire.
But while analysis sells, it still does not guarantee loyalty. Opinion does. It may not be easy to respond to analysis, but anyone can respond to opinion. So as media specialize, opinions invade stories. For example, in recent editions, Deal Journal has proclaimed such obviously opinionated headlines as “Everybody Hates Sprint” and “Bank Stocks? Meh, Says Analyst.”
We respond to these opinions, because we can. And the media are riding this democratization of opinion. The truth is that whether you agree or disagree with an opinion expressed in a story is irrelevant. If you respond to the opinion, you become loyal to the franchise. This is the real revolution in journalism. It is also, by the way, how capitalists make money in a democracy.
What does all this mean to you? Here is my objective opinion.
Prepare specifically for each individual interview. An interview can represent a spectacular opportunity to reach analysts, investors, customers, employees and other audiences all at one time. But for some media and some reporters, that interview may represent a similarly strong opportunity to reinforce an opinion. So know who it is you are talking with – that is, what is the editorial bent of the media, and how objective or opinionated is this particular reporter? Don’t for a minute think that either the media or the journalist is entirely objective. They don’t believe you are either. Based on that intelligence, determine what you will discuss, and just as importantly what you will not discuss, in this particular interview. Do this every time because every media and every journalist are different. But this rule of mine is a constant.
Develop and deliver your point of view. The best possible outcome of any interview should be a win-win for both you and the journalist. He or she gets a chance to tell a good story, and you get a good chance to tell your story. But be sure not only that you have command of the most important facts to support your story, make sure too that you develop and deliver your specific point of view about the issue at hand as well. And counter any opinions clearly expressed in the questions you get, by responding with not just a key message but your own strong point of view.
Is there more? Sure. But these two recommendations alone can get you started toward your own leveraging of the democratization of opinion for fun and profit in your next interview.
That’s my less than humble opinion anyhow.
All Right Mr. DeMille, I’m Ready For My Close-Up
I chatted with several journalists while in Prague and London on a recent trip, among them international wire services, television, radio and online news networks, and a leading financial newspaper. Very different discussions, except for one commonality. They all want online video.
A year or two ago, it was mostly trade media requesting video for their online editions. Trade media creating online editions discovered what television networks knew decades ago. When you have a lot of time to fill, you have no time to kill. You need more stories, and right now.
What to do? Add video interviews. Get the chief executive officer, or divisional executive, or marketing manager. Or even interview your own reporters from the floor of the big trade show.
If you check out the best trade media covering your customers, look closely at how many video interviews and stories are available on those web sites. It may surprise you.
And it isn’t just trade media now. Everybody wants online video. The reason is simple. We all look at photos. But we watch video. Because video is compelling, people stop to watch.
The key word is “stop.” When you stop to watch, you’re counted as a “hit” on the web site. The more hits to demonstrate, the easier the task of selling to advertisers.
So an industries reporter for a newspaper will want video from the factory floor to accompany a story on manufacturing trends. A wire service reporter will want video to accompany a story on breaking news to subscribers including investment houses and other news media.
One result of this trend toward online video is that journalism schools are even training students in how to use video cameras because almost every news job they might pursue will require the ability to take video for online stories.
This trend rivals the mainstream media usage of social media, because where social media may bring more readers, online video may bring more advertisers. Guess who is more important.
What does this mean for you?
You’re probably already creating your own online videos to demonstrate how your products or services solve problems that face your customers. You’re probably already creating your own video interviews of your management team to reach out to employees around the world. You’re probably also already using video to respond to issues or crises, to demonstrate quickly that your organization takes seriously its commitments and responsibilities.
But this trend line toward online video among mainstream media – which still dominate our conversations about what is happening in the world and which also drive the conversations on blogs and social networks – is something different, something new.
Your chief executive officer and other senior leaders, perhaps accustomed to the occasional broadcast interview with CNBC or Bloomberg Television, now will face requests for online video with almost every single interview request at the local, national and even international level of print, broadcast and online media.
You may have to prevail upon your leadership to participate in these online video stories. It may be the only way you make the news.
Speed Kills
In coverage on the raid in which U.S. forces killed Osama Bin Laden, did you notice how much attention media paid to the fact that the entire world seemed to be talking about this on Twitter?
It is not as if social media are new. So why does this seem to be such a novelty still to media?
The answer is that social media are not a novelty to the news media. Social media are really just an easy source for the news media. And that can be a problem for any corporation or executive who suddenly find themselves in the news.
Here is what I mean. It is axiomatic in the news industry that whenever anything happens that affects or could affect large numbers of people, the media will want reactions from people.
But mainstream media no longer have to spend time calling people at home or executives at work, or stopping people in the street to ask their reaction to breaking news. All they have to do now is check Twitter and other social networks and blogs.
So the mainstream media will never stop reporting on what is being said in the blogosphere and on social networks. Every reaction they want about a breaking story, is right there, right away.
At the same time news media will report on what is being said in social media about the persons, celebrities, executives, corporations or organizations involved in breaking news, the social media will report on what is being said in the news media. Back and forth it goes. All as if it were news.
Here is what this means for you, should you face a crisis, emergency or issue.
You’re going to be amazed by how fast the mainstream media and social media report on what each is saying about you. The speed with which these reports occur now is instantaneous.
And together, mainstream media and social media perpetuate the story. But even more so, they will also perpetuate any inaccuracies and opinions as if these are the facts.
Think about how fast the clash of a cold and warm front can produce a tornado, because that is what we’re seeing now with the confluence of mainstream and social media on breaking news.
So the speed with which both news and social media report out about your crisis, and what each other is saying about you, can threaten to kill your reputation.
The speed with which you attack a crisis now must also be instantaneous, and if it is, then you can swiftly kill most any threat to your reputation from mainstream and social media reports.
Success depends on how fast you move. In fact, how fast you respond to a crisis is now as important as what you actually say in that initial response.
If you don’t respond quickly, everyone who is important to you may draw conclusions about your company based on what many others are saying. And it may all be wrong. But if you do respond quickly, you can drive what is said about you in the mainstream and social media.
Kill or be killed. It is all up to speed.
There are several fresh studies on what it is that people post on Twitter, Facebook and other social media, including analysis of the large number of links people share in these posts.
Here are three facts that business executive and communications professionals need to think about because this research affects how they reach customers, investors, employees and others.
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First, much of what is discussed in social media is instigated by events in the news. One study found that 85% of what is discussed on Twitter is directly linked to news stories.
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Second, the largest number of links people share with friends and followers in their social media posts typically come from coverage of news stories by major media organizations.
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Third, the top 30 news sources among links shared on social media largely are from traditional news outlets including wire services, newspapers and television networks although there are some fresh names including niche media as Politico and TMZ.
Does this surprise you?
Consider the protests in the Middle East. Clearly word spread from that first revolution in Tunisia via online means including social media to other countries. There were examples of people using social media to report on what was happening in Tunis, Cairo and other cities.
But it was not social media reporting to people around the world what was happening in Tunis, Egypt, Syria and Yemen. Rather, it was social media carrying mainstream media stories about breaking events in these countries.
This is not to say there is not original content on social networks. There are plenty of tremendous insights and observations shared on Twitter, Facebook and other social networks, particularly as their popularity grows. But perhaps there is less than previously thought.
This is to say though that the major mainstream media – Associated Press, Bloomberg, Reuters, The New York Times, The Wall Street Journal, BBC, CNN and many more – control and in fact actually dominate online conversations about what is happening everywhere in the world.
What does this trend of increased social media discussions on news events and of sharing links from traditional media mean for you as a business or communications leader?
It means an even greater concentration of power among the big brands in mainstream media – and many of them do not yet comprehend that they may be the once and future king of content in communications – to shape both the online and the personal conversations we all have.
What that surprising yet accelerating concentration of power means for business leaders and communications professionals is that there are compelling opportunities to utilize what remains the power of the press to tell your story, to reach your audiences, to support your goals.
Years ago, a U.S. statesman was mediating peace talks between Arab and Israeli counterparts. But the talks weren’t going well. In exasperation, the American statesman threw up his hands and said, “Can’t we all get along like good Christians?”
It might be good for a laugh now – the diplomat from Washington clearly did not think about the fact he was talking to Muslims and Jews – but it wasn’t funny at the time.
And of course such gaffes aren’t limited to governments. In every country around the world, people can tell stories about U.S. corporations that made big mistakes there. Those companies didn’t know the culture, language, or history. Those companies thought that they way they operated in the U.S., was they way they could operate everywhere else too.
American parochialism, it seems, knows no bounds. Or boundaries. But keep in mind that we here in the United States have stories about foreign companies, too.
The fact is that there are increasing numbers of global companies that are based elsewhere around the world and which are targeting the United States as a growth market. For example, some of the largest alternative-energy companies in the world, sensing the rising interest here in solar and wind energy, are moving to seize growth opportunities in the United States.
Global companies coming here need to be careful not to make the same mistakes – or even worse errors – that U.S. companies have made abroad. After all, the United States is a foreign country, too. And just because you may know a lot of Americans, doesn’t mean you know America.
The reason this is on my mind is that a European company asked our opinions about “Buy America.” Does that mean, they wondered, that Americans won’t buy from them. It does not.
But as is the case when doing business in any other country, there is much that global companies need to understand about the United States, and factor into any marketing and communications programs aimed at audiences in this country. Here is what this means for global companies:
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It costs more. Whatever the budget may be for marketing and communications programs in other nations, is irrelevant. It is going to cost more here. This often shocks foreign corporations. Here are two factors to keep in mind. First, if this country is important to you, it is important to your competitors and they will be here too. And domestic competitors will do whatever it takes to protect their market. Consumers or companies to which you want to market and sell your products and services here, have what can look to be limitless choices. Why should they pick you? And how do you even get through the inordinate clutter of marketing and communications messaging that bombards everyone everyday in this country, to reach them at all. You have to be bold and creative to differentiate yourself. That takes budgets. Second, this is an expensive place to do business no matter where you are or what you do. Of course, it is because consumers and companies have so much money that you want to be in this market.
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You need Facebook. It doesn’t matter what you’re trying to sell here. It doesn’t matter if you are business-to-consumer or business-to-business, you aren’t going to reach much less persuade your various audiences if you are not on Facebook, YouTube, Twitter and other social media. If you want to reach people here, you’ve got to get into the social networks, because that’s where people talk to each other. Here is what I mean. If you want to sell anything to women, keep in mind they often make purchasing decisions based on word of mouth from other women. Unsurprisingly, women look to blogs written by other women. The emergence of “Mommy Blogs”has created growing sales opportunities for companies that get good reviews by mothers in these blogs. People believe other people who have similar interests, more than they believe anyone else. More than any other factor, the rise of such ultra-specific demographic segments explains the popularity of social media here in the US.
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New York and LA, are not the USA. A friend of mine in Moscow once told me that there is Moscow, and then there is Russia. They are not, he said, the same. The same holds true here. New York and Los Angeles are among the biggest cities in the world. But New York and LA are not the USA. In fact, across this country there often is considerable bias from and toward these two cities. Every communications professional here knows the story of a New York public relations professional who visited a client in Memphis and then wrote on a social network that he had no idea how people could live there. That did not endear him to the client. The truth is that how you transact business and how you conduct communications in these two cities on either coast is likely going to be much different than how you do so elsewhere in the 3,000 miles between them. When you leave New York or Los Angeles for other cities, leave those big cities entirely out of your business and communications strategies elsewhere.
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This country is so big, it is small. Nothing really is close to anything else here. It’s a big country. Because it is so large, it is really a small country. There are a number of well-known regions such as New England, or the Deep South. Even these regions are so large that within each one there are smaller areas where linguistic and cultural differences can be immense. If I drive two hours east from where I live and visit Pittsburgh, people there are different. We may speak the same language, but we have much different idioms and expressions. When you target individual regions of this country, or states or cities, you need to devote time to understand how each is different, and how each views itself from all the others. Think about this. If American businessmen are expected to eat chicken feet when they attend a business banquet in China, what are Chinese businessmen – or those from any other part of the world – expected to eat at such dinners here? That banquet menu would be different in every single city across this country.
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You, and the jobs you offer, are welcome. When experts talk about the economic crisis of the past few years, they say that this time it’s different. They’re right, but there have been subtle shifts that are positive for global companies that conduct business here, particularly those with manufacturing facilities in the United States. In the last downturn to rival this one, in the early 1980s, there was such xenophobia about jobs going overseas that one of the most popular automotive bumper stickers read “Hungry? Eat Your Imported Car.” But this time it really is different. The unemployment rate would be 3-5% higher if not for jobs at US operations of global companies. That translates into tens of thousands of jobs for Americans. And people here understand and appreciate that fact. This is an unusual moment in time when global companies can seize this good will through discrete community relations programs that focus on every stakeholder in their communities – politicians, universities, corporations, neighbors, everyone. Global companies, many of which have kept low profiles because of protests in the past, cannot afford to waste this opportunity to establish or enhance strong relationships in the communities where they have operations and employ people. There will not be another chance like this one.
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But you still need to be prepared for problems. The speech with which the “acceleration” crisis overtook Toyota is startling and frightening. The most immediate lesson is that when any corporation faces a crisis here, the company must respond immediately or it will lose control of the situation. That does not just mean lost sales, it means possible lawsuits and investigations. What global companies need to know about conducting business here is the importance of concomitant risk and crisis management strategies. Global companies acquired manufacturing facilities here only to discover they became liable for environmental issues related to those facilities – even if there has been remediation of the facility and the surrounding soil or water. You need to have in place a risk management strategy for legal protection, and a crisis management strategy for reputation management. This is as important, perhaps more so, than any other component of your marketing and communications strategy in the United States.
Almost a year after the event, I still get a lot of questions about the BP disaster in the Gulf of Mexico. One of the most recent questions was whether this disaster was a “wake-up call” for chief executive officers as far as crisis preparation and management at their companies.
There were two disasters that confronted BP. One was the explosion that killed a number of people and which spilled countless tons of oil into the Gulf of Mexico. One was the continual communications blundering. These disasters do serve as a warning to chief executive officers that anything can happen anywhere in the world at any time.
But I would argue that the Gulf of Mexico crisis is an anomaly. Few companies ever will face a crisis of that magnitude. So yes, chief executive officers as well as communications professionals around the world watched closely as these two disasters unfolded. But more from an intellectual perspective because few of them will believe such a crisis can happen to them.
There were other events last year to which chief executive officers did pay more attention. One of these was the rash of strikes by Chinese factory workers who demanded more pay.
News coverage focused on strikes at large companies, among them some of the best-known global brands. But this is a challenge that could confront any global company, and every chief executive officer whose company has operations in China is well aware of such a threat. And these days, that includes not just Fortune 100 companies but small and midsize companies too.
Here is what this means for you.
If you have operations in China, it is because of the opportunity to be close to customers there and elsewhere in Asia. That suggests the greatest growth prospects for your company are in Asia.
Any crisis such as a labor strike in another country is not just a local issue, it is a threat to your continued success. But dealing with a crisis in another country, is not always the same as dealing with one here. That is particularly true in a country such as China.
Global media may make it seem that business success and consumer affluence are common in China but these are still new developments for most people. So is working for a global company. And unless you foster the company culture, Chinese will have no particular loyalty to you.
If there is a problem, Chinese employees will talk. For that matter they may also walk if they do not believe you care about them, their community or their country.
But they will talk on social networks and blogs because this is how people learn about what is happening. What they say about you will help dictate how quickly the problem is resolved, and whether the problem becomes a public issue. If that happens, all bets are off.
Because if employees are critical of you, Chinese media soon will hear of the problem. They are increasingly nationalistic and will criticize you for caring about money and not about people.
Sound far-fetched? Not to companies that faced labor strikes last year.
And that is a challenge that any company conducting business in China – or other countries – can face. Because that can happen to any company, that is the real wake-up call for all CEOs.
What to do?
Crisis preparation in China begins with employee communications, including the use of social networks to reach your employees, to build employee loyalty that can help you with reputation management if you do have any issue or crisis. It can also help with talent retention, still a problem for many companies particularly at a time when Chinese employees are beginning to move from successful global companies to successful domestic companies.
Crisis preparation simultaneously includes far greater emphasis on frequent planning and training sessions, right down to every single plant manager and shift leader in your facilities. Because people at this level have never been through a crisis – they may be young and have known only success – they may well fail you when you need them most.
This happened to one global company. There was a fire at one of its manufacturing plants, which was covered by the Chinese media. When the plant manager left for the day, he was ambushed the media. He ran back inside because he did not know what to do. The resulting video coverage made it difficult for the company to prove that it was on top of the situation and that it had the interests of the local community at heart. That is important to success in China.
If you’re wondering what the title of this, yet another blog, means, I can explain.
It used to be that when reporters turned in their stories, they typed (more) at the bottom of every page, so that their editors would know there was in fact more to the story.
And that is exactly why I wanted to give this blog the name – (more).
Certainly I’m going to be talking about what is happening in the world. I’m going to talk about business, politics, journalism, communications and more, and from around the world.
I intend to offer you more than just an opinion, as brilliant as it may be. When I tackle a topic, I’m going to tell you what it means to you, and how you can use it to your benefit in your world.
Here is what I mean. Ever hear of Patch? Check it out … www.patch.com … This is a web site where local news is available in growing numbers of cities around the country. Take a look at any site in any state and what you will see is exquisitely local news in a small community.
This is called “hyper local news.” For the longest time, the joke in newsrooms was that “hyper local news is the next big thing, and it always will be.” It is now the next big thing. And Patch is perhaps just the most visible and so far successful venture on hyper local. It may well succeed.
Here is what this means for you.
There is nothing too small, no person too unknown, no event too parochial, not to be of interest to Patch. Do you have a small business? Patch is interested. Do you have a global company with local operations? Patch is interested. Do you want to honor a local employee? Patch is interested. Do you want to be seen doing good in your community? Patch is interested.
Patch knows something most local newspapers, magazines, radio and television stations have forgotten. Patch knows that everyone wants to know what is happening in their community. Patch wants to give people stories that they cannot get anywhere else.
What is it that you want to achieve in your community, or those communities where you conduct business, have employees, or live? What is it that you want people to know about your company?
I’ve met few business executives who think much of their local paper. Among the complaints: When covering the company, local papers often get the facts wrong. And local papers won’t cover stories executives think are interesting because they’re “not news.”
You have an opportunity that you haven’t had in years to tell those stories about your company.
