There are so many relevant lessons in crisis communications in our current economic crisis that sometimes it is hard to know where to start. An article from Daily Dog about new outrage against Fannie and Freddie paying “retention bonuses” reminded me of one important lesson.
I’ve written before about the increasing sense of ownership that the public and stakeholders seem to have over almost any large company, government agency or big institution. In my book I called the “public franchise” where non shareholders and just plain old members of the public have gotten the idea that they should have a very strong say in corporate actions and behavior–particularly when it might affect them. You take that sense of ownership and you add public money–that is taxpayer money–that is yours and my money–and you get a sense of ownership like nothing else. Now a great many of us believe that with even one dollar of our hard earned money invested, we should have virtual veto power over corporate actions.
AIG should have understood and clearly didn’t that their freedom to operate as a company was forever lost when they took bailout money. Any bank, financial institution, automaker or anyone else who gets bailout money needs to understand clearly that the media, the public, activists, busybodies and just about all of us have the feeling that we now have purchased a huge degree of control. It’s our money, we have the right.
And the administration reinforced that understanding powerfully with the sacking of GM CEO Wagoner. Did the government buy GM? no. Did they assume majority ownership? No, but did their “investment” give it the supreme control–control typically held only by the board? Yes. That is the message. Even a minor staken, even a miniscule investment, even the smallest injection of bailout money means that public (and its representives) now owns that company in a very real sense. The public franchise has taken on a much deeper, more significant and powerful meaning.
Is it the death of private enterprise and the free market? I don’t think so. These are dark days for people like me who believe in the efficiency of free and open markets. But the bailout money (necessary evil in my mind) and the government and public reaction with outrage to perceived abuses of the public franchse is sending a very very powerful message to all private enterprises. Will you sell your birthright for a bowl of soup? I know if I want to keep my freedom to operate, to make fundamental management decisions on behalf of the owners and customer, I would be very very cautious about any level of taxpayer involvement. And that is a good thing.