Archive for September, 2006

Bank of America’s liability “protection” costs them $14 million and counting

September 27, 2006

Perhaps you’ve heard the story by now. I heard about yesterday after making a presentation in North Carolina. Clark Howard, the talk show guy who helps everyone save money, had a segment on his show about Michael Shinnick who got arrested by San Francisco police at the behest of Bank of America after trying to cash a check. Shinnick had just confirmed at the BofA branch that the check had funds in it–was proceeds from a bike sale. The police arrested him for trying to pass a bad check and Shinnick had to spend $14,000 of his own money to clear his name, which he did. Bank of America apologized for its stupidity but then added stupidity onto stupidity onto stupidity. They refused his request to cover the costs he incurred to clear his name–citing their liability protection.

The bloggers took it from there and are running wild with it now. (See It’s all over Digg, etc. But what kicked this anti-BoA backlash into high gear was Clark Howard exposing the mistakes to his nationwide audience. And he suggested that BoA customers withdraw their money from the bank. Well Clark’s head must be swelling because as of 9:30 am CDT on 27th, that count is now up to over $14 million and growing rapidly. There is even a meter on Clark Howard’s website that shows how much has been reportedly withdrawn on a realtime basis.

Howard offered to pay half the man’s legal fees if BoA ponied up the rest, and they refuse. Matter of principle I suppose.

So, crisis managers, how do you handle this one? If this isn’t evidence of the growing power of the blogworld connected to MSM (mainstream media) I don’t know what is. It is a 1 plus 1 equals three equation. Clark alone couldn’t do this. His website helps, but really helps (or hurts depending on your point of view) is the connection with the blogworld that is feeding the flames. Not sure who lit the first spark, but no doubt Howard dumped a gas can on it, but now it is the bloggers and websites feeding the flames. And the meter keeps rising.

Out of curiousity, I just checked the BoA website. Of course, no reference to the Shinnick-Howard situation. Would be crazy I’m sure most people would think. But where is BoA to present their side? Certainly they have a different perspective on this. I suspect they are concerned about the precedent set by not hiding behind their liability protection. And $14 million is just a blink to them. But how big does this have to get before they start talking? And then where do they join in the conversation? Howard is having representatives on his show. Good, but Howard doesn’t like them much right now and is riding a huge wave of power and prestige in bringing them down. So where can they join in the conversation in a more neutral environment?

Anyone have thoughts about this?


Starbucks facing “monopoly” charges

September 27, 2006

Seems like Seattle is a great place to grow companies that come to dominate their markets–and then get viciously attacked for their success. Of course I’m talking about Microsoft and now Starbucks.

This story from the Daily Dog discusses a lawsuit filed against Starbucks from a Seattle coffee franchiser complaining about monopolistic and predatory practices.  One quick side comment about the “Dog” story. It starts with”Starbucks isn’t called the Evil Empire for no reason…” Oh come on. I thought the evil empire dates to Reagan and the USSR. Not sure who is calling Starbucks the evil empire (suspect it is competitors) but for a PR-oriented publication to offer a lead like this is, well, a little yellow. Yes, I own Starbucks stock so perhaps I have a vested interest, but this rather obvious imitation of the mainstream media’s worst corporate-bashing tactics is surprising to me in a PR-industry publication that ought to be more critical of this kind of attention-grabbing writing.

But on to the main point–the monopoly claims. I can’t comment on the specifics, but in our town located just 80 miles north of Seattle there are lots and lots of competitive coffee places and even small franchises. The one owned by my neighbor has about 10 stores. Starbucks only has a few in town. We have a strong strong anti-corporate attitude in our university town and so when Starbucks opened a store downtown a few months ago, there was a real reaction against it. I usually go to the non-Starbucks places closest to my office. But I went to one the other day and the horrible music was up so loud that the barrista behind the counter, who insistently bent over the counter working on something for about 7 minutes, could not hear us even when we tried to get his attention. We walked out. Went to the next place. One person was in line ahead. The idiotic barrista dinked around with his single drink for so long, engaging in casual conversation with him, completely ignoring me and my guest in the process that after about 10 minutes of this we walked out. We went to Starbucks. They served their usual completely consistent Americano and actually did what I asked when I said I only wanted half a cup of water in it. That doesn’t often happen in a non-Starbucks store.

Microsoft was super aggressive and no doubt engaged in business tactics it later came to regret. And it was beat about for its dominance and success and made to pay for it, just to serve as a lesson in case anyone thinks that success is what they really want. But did this change the public’s opinion of Microsoft? No. Their reputation has improved dramatically but mostly I believe because of the emergence of a new giant–Google. Claims about King Bill and Microsoft’s complete dominance are now a memory. The new target to attack is someone who doesn’t even ask you to pay for all the functionality they offer–and how is innovating for profit charities.

So, lawsuit-happy failed franchisers, stop blaming Starbucks’ success for your failures. Get out there and Google them.

Earning the “Right to Operate” is gaining traction

September 25, 2006

The corporate community is learning. Even a staid industry like the utility industry. From the old school perspective that “every one needs what we make so we just need to make more of it and ignore the critics,” the change is securely underway that demonstrates that public trust and confidence is not something to be taken for granted. Here’s an article that shows this kind of thinking in the energy industry.
I don’t agree with everything about this assessment from inside the utility energy:

– it seems very media-centric rather than talking about addressing stakeholders more directly

– I’m not sure that promoting economic benefits is effective in all communities–some, like my home community could care less about economic benefits. With strong growth, they don’t worry (for now) about jobs, taxes, and all that. They want to know quality of life will be protected.

The point is that the world has changed and the old ways of doing things and communicating about them (or failing to communicate) don’t work anymore. The winning soundbite was provided by  Mary Deming of Southern California Edison: “If we lose public trust, we are doomed to fail.” Well said indeed.

More thoughts on the Pope statement

September 25, 2006

Got a chance to read the newspaper a little on the flight to the east coast. Seems a little strange but after all the flurry about the Pope’s statement, now the context is being more clearly explained. That context was a powerful argument for the connection of faith and reason. It was a message about the evils of using violence as a mode of persuasion or conversion in religion. At least what I understand of it.

The Pope has no reason to apologize for his message. No doubt, in retrospect, the reference to comments by a 14th Century emperor will advised as I stated earlier. But the Pope also referenced how outlandish those statements our in our time. But the entire context was lost. Only that reference has been discussed. Whose fault? Yes, the Pope and his advisors for not anticipating how strong statements like that can be so easily misused. But equal blame or more so goes to those who disagree with his basic premise about rationality and religion and who saw an opportunity to promote their message promoting violence in the name of the Almighty. Blame also goes to the media and us bloggers who comment on this who failed to make the greater context known. Will it satisfy dubyus, and others who believe the Pope to be as evil a person as the 14th Century emperor considered the leader of Islam.

For the record, I am not a Catholic and do not consider the Pope infallible. But his message of the role of rationality in religion is an important one. Too bad it was co-opted by those with a more aggressive goal than mere persuasion.

Pope, Spinach and my response to comments

September 22, 2006

Some interesting comments from Patrick and dubyus on my posts about the pope and spinach (separate posts, no obvious connections).

Re dubyus comments. Agreed the Pope could have used other references but he didn’t. Let me ask you this, dubyus: Can you imagine an equal reaction in the western/post-Christian world if a prominent Muslim leader were to quote a 14th century source that equally disparaged Christianity? Of course not. We are accustomed to the most outrageous disparagement of our religion and its leaders including Christ himself and do not react in this way. The promised violence against anyone espousing any religion other than Islam expressed in reaction to the Pope’s comments are evidence for the one-side nature of “offense” in this current debate. There is no equivalence here.

I stand by my comments about the Pope’s message being ill-advised–precisely because of this inequality of political correctness. I also agree with dubyus that in retrospect, the Pope’s apology fell far short of what was needed. He apologized for the reaction in large part. It fell short.

As to the comments about moderate Muslim leaders taking a stronger role in healing the rifts caused by extremists and unfortunate statements like this, where are they? If the Western media has ignored all the action that has taken place, then I implore the Muslim world to do what the rest of us in crisis communication advise our clients: when the media won’t carry an important message, you have to take it direct. Ads can be purchased. Messages sent by email and snail mail. Websites can be launched and promoted. Blogs can enable people to engage in conversation. There is much that can be done and it is not really an acceptable excuse to say that the media won’t cover it. It is too important.

By the way, thank you for dialoging about this. We may not agree, but it sure is helpful when people start talking. And you have helped me understand better a different viewpoint.

Patrick on spinach–you are right of course that the best way to deal with crises is prevention,a nd likely this could have been prevented. But those of us in crisis communications need to deal continually with what happens when people don’t take the prudent and necessary steps. So I’m not sure how helpful it is in talking about a crisis communications response to say it should have been prevented. Talking about how it will be prevented in the future is very helpful–but that was exactly my point.

Now– I am on my way out the door for a weeklong trip. First, a little more archery hunting, then working with one of the nation’s largest universities on crisis communications planning, then to Houston for a user group meeting for PIER and an exciting seminar with the Global Energy Management Institute and World Energy.

I’ll try to keep up while on the road, but in the meantime, keep those thoughts coming. Artisansweets–I would have commented but I’m too much of a hurry so I will get back to you later.

Spinach industry fighting back

September 21, 2006

Ad Age magazine reports the spinach industry is planning on spending a bunch of money trying to rescue the $300 million dollar industry. Already there are reports of farmers near Salinas, CA having to plow their spinach crops into the ground because of the FDA ban and collapse of demand following the e.coli outbreak.

E.coli is dangerous and all precautions should be taken. But e.coli doesn’t come from spinach. I won’t mention where I understand it comes from nor will I speculate on how it got on organic spinach from a healthy sounding brand like “Earthbound.” Seems to me the most important thing is to help consumers understand how that nasty stuff got on perfectly good stuff and what those involved in the processing are doing to make certain it doesn’t happen again.

The article references the Odwalla e.coli problem and steps taken after that. I haven’t studied it but it seems to me Odwalla is one of those few major reputation/safety crises that turned out pretty good for the company. Very appropriate to have the PR manager from Edelman invovled in that commenting on this situation–and his comments are right on target.

What I find interesting about this situation is the possible impact on “organic.” Seems to me people pay a lot more for stuff labeled organic than typically can be justified by the benefit, but that is only my perception. But if they are doing that for safety reason, what impact will this have. Sure, it has nothing to do with the organic categorization of the product, or does it. After all, if they don’t use commercial fertilizer, what do they use to fertilize organic spinach. And where does e.coli come from again?

Whatever, explantion is needed to reduce impact not just on spinach but on the organic labeling.

How is Duquesne University doing?

September 18, 2006

I’m a little hesitant to do more grading or evaluating how an organization is doing in a crisis after some of the comments about Montreal’s Dawson College–but I’m going to anyway as that was what this blog was set up for. Another tragic university shooting–this time some star basketball players. Here’s the story:

PITTSBURGH (AP) — Armed police officers stood guard outside dormitories at Duquesne University while other officers roamed the downtown campus in their cruisers.

In the chapel, meanwhile, more than 300 students made the regular Sunday Mass standing-room only as they gathered to pray and try to understand how five basketball players could have been injured by gunfire on their tranquil, close-knit campus.

“We’re shocked because an event of this sort has never happened,” Duquesne President Charles Dougherty said. “It’s a safe campus and known to be a safe campus.”

Two players had been walking near a dormitory when they encountered a man who apparently had been disruptive at a student union dance, authorities said. The players attempted to pacify him and walked away but were shot. Players who rushed to their aid were also shot.

I checked the Sydney Morning Herald story and they also had the comment by university president Dougherty. I checked their website and it appears, although I can’t verify the timing, that they had a statement posted on the site on the 17th–the same day of the event. The statement had useful information, had comments from the president, and promised to providing continuing information and be a good source of information about the tragedy.

So, I will stay away from grading, but I will say to my eyes, the contrast between the two institutions is quite strong. It can be done. In this day, it must be done.

What’s the Pope to do?

September 18, 2006

In my quick roundup last post of crises happening at the moment, I certainly missed the biggest one of all–comments the pope made. And since I have been out in the wilderness in the days since and not watching tv, reading blogs or doing anything else civilized, I can look at the furor now and see the shape it is taking.

I don’t have the context of the speech in which the quote from a 14th century emperor was made where the Prophet was disparaged. I would hope that the context gives some clarity to why this comment was made. Whether there was sufficient context or not, it still seems pretty clear the comment was ill advised. The fact that it was ill advised is the real problem–we live in an overheated time of extreme political correctness that is seriously unbalanced. That is true in various places in the public sphere but nowhere more so than in the sometimes hot sometimes cold war between the medieval Islamic culture of the Islamists and the contemporary liberal democratic culture that most of the west and western-influenced world lives in. The Islamists desire very strongly to cast this culture war into crusade language–it is a great falsity and one unfortunately perpetuated far too much by the press in their attempt to be balanced and politically correct. That’s why George Bush made such a serious mistake when he used the term “crusade” and he has been scrupulous to avoid it ever since. That’s the Pope was ill advised to refer to any medieval comments about the relation between Christianity and Islam because it is all but certain to create this kind of reaction.

The fact is in this super-heated cultural/political war environment, it is perfectly OK for one side (Islamists) to not only disparage but announced their intentions of doing the most awful things to the most sacred icons of the western culture, while they will use the slightest slip that can be seen as disparagement of their sacred icons as evidence of the west’s true intention: a return to the medieval crusades. It is they who wish that return. The west does not.

I see now I am venturing into political and geopolitical comment which is an area I want to stay out of if at all possible. In this case it is not entirely possible because my advice to the Pope and his advisors has everything to do with understanding the tensions that exist. They should have understood it better. The Pope is doing all he can under the circumstances. He has apologized repeatedly. Perhaps the first one could have been more aggressive–these apologies that keep ramping up until they have impact are less effective. Now, what is desperately needed is for reasonable Muslim leaders to step forward to close this breech. The Pope and the Vatican can do no more to stem the tide and to keep the radicals from exploiting this unfortunate situation. It has to be more moderate Muslim leaders who see the dangers ahead if the Islamists are successful in their public relations jihad. They have been far too quiet in all these flareups–including Bush’s “crusade” gaffe, the Danish cartoon disaster, and now this. Time to speak up for civilization and all that is right and good, gentlemen.

A quick crisis roundup–just for today

September 15, 2006

A quick review of organizations in the news in some form of crisis is a little mind boggling–and clearly too much for me to comment on. Particularly since I have to get ready to address a technology group on the topic of blogs in an hour.

Here are a few samples:

Dawson College–Montreal–already discussed here so won’t say more. (By the way, excellent message on their website (finally))

HP–big problems related to internal board squabbles. Leads the news in Economist this week. Chairman resigns and CEO assumes Chair.

YouTube getting sued for copyright issues. See story in Bulldog. 

Dell Computer is focus of Justice Department scrutiny. Economist: Dell revealed that the Justice Department has joined a widening investigation into the company’s accounting. Michael Dell, the computer-maker’s chairman, threw his support behind Kevin Rollins, the chief executive.

CNN’s Nancy Grace may be facing some real pressure after a woman she interviewed committed suicide. 

OK, that’s enough for one day.

Now, go get ready to talk about blogs.

Montreal College–Is it fair to grade?

September 15, 2006

Now that my comments about Montreal’s Dawson College have spilled onto another crisis blog site ( and after having some time to think about Valerie’s comments about my harsh judgment, I can’t resist commenting more.

First, the distinction between a Canadian “college” which is part prep school and part university and a US university. Are the communication expectations the same? My answer: Yes. The expectations for communication for all stakeholders are largely the same. The more your life is impacted personally by what is happening, the more you have a need and an expectation for personal, direct and instant communication. That is the way it is. That’s the expectation. Doesn’t mean it is possible to meet. Doesn’t mean it is easy to meet, but that is the expectation. The closer an organization can come to meeting that, the better their communication response. That means that high schools and schools at all levels need to be aware of this expectation and prepare to respond.

The primary concern of Valerie is the “F” grade I so quickly assigned. I think Valerie has an important point. But I used to be a teacher and the grading process dies hard I suppose. The headline on the blog I wrote said “appears” and that is important. But Valerie is right that in the hours after the event it was far too early to judge the overall communication response. So, in retrospect, I should have made it clear that it was a very initial judgment. Sort of like a pop quiz on the first day of class rather than the final grade. They may do much better in the long term. The problem with communication in this instant news world is that initial impressions count for an awful lot and so that first day pop quiz may actually represent about 50% of the total grade. Even if it is 50%, the F was premature.

Where Valerie and I disagree more fundamentally I believe is that while stakeholder’s expectations may be entirely unreasonable from a responder’s perspective–perception is reality. Those responding during Katrina could give all kinds of reasons why their communication was inadequate. Ultimately, it didn’t matter tot he public.  Expectations were not met and that is the bottom line.

I’m also struggling with Valerie’s sense that I was trading on a tragedy. If that is the case, it is truly despicable. But while I might have used some thoughtless “blogstyle” comments about this, and showed some insensitivity, the purpose of this blog is to examine how organizations are responding to crisis events and learn from them. To not comment because there is a human tragedy involved would eliminate such tragedies from the opportunity to learn. But, would love to hear other thoughts on this.

And Valerie, thanks for the conversation! You certainly have helped me slow down and think about these things.