Communicating If You Lost Money With Madoff
I guess if you haven't heard by now from your mutual funds, 401K or pension plans if your money was invested with Bernie Madoff, you're either in the clear or the fund communications department still has its head in the sand.
I've been looking for letters one way or another from different places where I invest. I'm attaching an email my wife received from her alma mater, Tufts University. It was direct , candid and straightforward. It reflects some of what we at CommCore Consulting Group cite as the best principles of crisis communications. Be direct, say what you can and then figure out a way to move on. This letter is consistent with other messages that Tufts has sent out regarding the financial crisis. Good work on their part:
I have promised to keep you informed when the economic news of these extraordinary times has special significance for Tufts. The news this past week has been dominated by a financial scandal of unprecedented scale and scope. I am sorry to report that Tufts is one of a growing number of victims of the crimes allegedly committed by Bernard Madoff.
In 2005, the university's Investment Committee authorized an investment with Ascot Partners, which in turn invested the entire sum with Madoff Securities. We have written off the value of this investment, which totaled $20 million, or slightly less than 2 percent of our endowment. This write-off will not significantly affect our operations. We will cooperate with any investigations of this fraud and will work to recoup as much of our investment as possible.
It is personally painful for me to communicate this information to you. We deeply appreciate the trust and confidence that each donor places in the university. We also have an obligation to our students and faculty to manage these resources wisely for their benefit. You have my word that we will look closely at our experience in this case so that we can strengthen our investment process for the future.
I will continue to keep you informed as we work our way through these difficult times. For now, I send all the members of the Tufts community my very best wishes for the holiday season ahead.
Lawrence S. Bacow
What have you come across, or what have you as a communications professional done, about communicating news on the impact of the Madoff scheme?
Labels: Ascot Partners, Bernard Madoff, CommCore Consulting Group, crisis communications, financial losses
Under fire from many quarters since President-elect Obama selected him to deliver the Inaugural Day sermon, the noted Evangelical Rev. Rick Warren has just removed anti-gay language from his Saddleback Church website.
This move comes a few days after his speech in Long Beach, CA to a Muslim convention in which he stressed his open-mindedness: "As-salaam alaikum....Let me just get this over real quickly. I love Muslims. (applause) And, for the media's purpose, I happen to love gays and straights."
Kind of reminds me in style and tone of another sound bite from another recent highly-publicized appearance, the first press conference by embattled Illinois Governor Rod Blagojevich in which he strode the podium and started off: "I'm here to tell you right off the bat that I am not guilty of any criminal wrongdoing. I intend to stay on the job and I will fight this thing every step of the way. I will fight. I will fight. I will fight until I take my last breath. I have done nothing wrong."
Seems to us at CommCore Consulting Group that both Warren and Blagojevich - different men in the spotlight under very different circumstances - have resorted to the same kind of communication by denial: If I make my point quickly and emphatically enough, the operative sound bite will erase prior history. In Warren's case it's a documented litany of intolerant pronouncements; in the governor's case it's the tapes of him touting how he's willing to sell Obama's senate seat to the highest bidder.
What's your take on crisis response by strident sound bite when the operative quote contradicts documented statements and actions? Does passionate, dramatic knee-jerk denial work in today's short attention span media environment? Do these blasts ever signal a change of thinking or genuine softening of polarizing views? Or will such sound bites come back to haunt he, or she, who utters them?
Labels: CommCore Consulting Group, Communications, Rick Warren, Rod Blagojevich, Saddleback
IR and the Larger Communications Picture
The November issue of Update, the publication of the National Investor Relations Institute (NIRI), features an article titled, "Corporate Transparency in the Internet Age."
Lynn Casey, CEO of communications firm Padilla Spear Beardsley, writes: "Performance first. Recognition, second, achieved by professionally planned and executed communication. At its best that means that a publicly held company walks its talk with all the people who are important to its success - customers, employees, Wall Street, lawmakers, special interest groups, the communities in which it operates. Then it communicates with them about its performance - clearly and consistently - so they will recognize that the company is trying to do what it said it will do."
In the same issue, Carol Metzker quotes an Investor Relations Officer as follows: "In this storm, you're not going to boost your company's valuation much by presenting your best case scenario. Instead, aim to maintain credibility by presenting a fair picture."
Both Casey and Metzker confirm what CommCore has been advising for a while now: in an age of 24/7 cross-platform multimedia and user-generated content, PR must have a strategic partnership with all communications functions. This includes on-point, timely and above all consistent executive-level messaging via IR, corporate communications, public affairs, and marketing communications.
Are Casey and Metzker preaching to the NIRI choir about the importance of cross-functional executive communications planning and skills - translation: transparency? What's been your experience of how IR and PR are changing and collaborating? What challenges do you face?
Labels: CommCore, Communications, Investor Relations, IR, NIRI, PR, public relations
How Often Do We Get "Do-Overs?"
The travails of General Motors, Ford and Chrysler before Congress in Washington last week present painful lessons for anyone with a critical presentation.
How often do we get a chance for a "do-over" or make good on a critical business plan or presentation? Pretty rare. Only in extraordinary circumstances such as the possible implosion of the US automakers would the companies get a second chance. In essence, the school teacher (Congress) said that: "You students haven't done a very good job on your term paper. We'll give you one more chance. Otherwise, you'll probably flunk the course."
In CommCore's Presentation and Media Training seminars, we would never suggest cutting the preparation this close. What we saw was failure to analyze the audience and know what was expected, lack of preparation of a real plan and no one looking at the optics (flying in on three separate private jets).
Only the current economic situation, especially the unemployment figures, is aiding the auto companies request for financial aid. Very few of us will get such do-overs if we're not prepared.
What lessons are you learning from the auto companies request for aid?
Labels: Big 3 automakers, Chrysler, CommCore, Ford, General Motors, media training
Driving the Future
I spent Thanksgiving weekend driving around Washington, DC in a Chevy Equinox Fuel Cell
vehicle - no gas, no emissions. It drove like any other car but under the hood was this cool motor, no spark plugs and a tail diffuser (no tail pipe) that just gave off water vapor as the exhaust. I did not have the "Prius look" as I tooled around, but it did feel cool to drive it and show it off.
I am well aware of GM's and the U.S. auto industry's issues, but if there was a way to fast forward this vehicle, we would have a lot of answers and some good news for Detroit.
The vehicle is in what GM
calls a market test. There are tests in Washington, NY and in the Los Angeles area. Mercedes Benz
are also conducting tests in the U.S. (Honda is actually leasing cars in CA). And of course, the big issue is the lack of infrastructure to refuel these vehicles. There is only one filling station in the DC area, two in Westchester and three in the LA region.
We have also been working on these energy issues at CommCore. One message we have had to address is the lack of range on these vehicles. At the moment, the GM Chevy only gets 160 miles for each "tank" of hydrogen. That does not seem like a lot, particularly since you have to return to the one or two filling stations in the area. The analogy that works: 160 miles is the equivalent of what a New York taxi cab driver puts on a car in a typical work day. That is the total from leaving the garage to returning 10 hours later. When put in that perspective, 160 miles seems like a fair amount of driving.
Gas is under $2 a gallon, politicians are worry about short-term cost reduction and saving jobs, and the liquidity crisis is causing even a magnate like T. Boone Pickens to have trouble funding his wind ventures. What is your take on the renewable energy sector’s communications challenges in 2009?
Labels: Fuel Cell, GM, Renewable Energy